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L Brands posts record profit, names CFOs for Bath & Body Works and Victoria's Secret

By Prachi Singh

May 20, 2021

Management

Image: L Brands resources

L Brands reported earnings per share of 97 cents for the first quarter ended May 1, 2021 compared to a loss per share of 1.07 dollars for the first quarter ended May 2, 2020. The company said, operating income was 572.1 million dollars compared to a loss of 317.7 million dollars last year and net income was 276.6 million dollars compared to a loss of 296.9 million dollars last year.

The company added that adjusted first quarter earnings per share were 1.25 dollars compared to an adjusted loss per share of 99 cents last year, operating income was 572.1 million dollars compared to an adjusted loss of 220.9 million dollars last year and adjusted net income was 356.7 million dollars compared to an adjusted net loss of 275.2 million dollars last year.

Commenting on the first quarter trading, Andrew Meslow, CEO of L Brands, said: “L Brands delivered record first quarter earnings, driven by continued strength and exceptional performance at Bath & Body Works and Victoria’s Secret.”

L Brands reports increase in Q1 sales

The company reported net sales of 3.024 billion dollars for the quarter compared to net sales of 1.654 billion dollars for the first quarter of fiscal 2020. Sales were up 15 percent compared to sales of 2.629 billion dollars in the first quarter of 2019.

Bath & Body Works net sales were 1.469 billion dollars compared to 760.6 million for the first quarter ended May 2, 2020. First quarter 2021 sales increased 60 percent compared to the first quarter of 2019. First quarter 2021 U.S. and Canada store sales increased 47 percent to 1.050 billion dollars, while sales in the direct channel were 349.2 million dollars, an increase of 21 percent compared to 2020 and a 123 percent increase compared to 2019.

Victoria’s Secret total comparable sales increased 9 percent compared to the first quarter of 2019. Comparable U.S. and Canada store sales decreased 3 percent compared to the first quarter of 2019. First quarter 2021 sales of 1.554 billion dollars decreased 7 percent compared to the first quarter of 2019 and reflect the net closure of 233 company-operated stores since the first quarter of 2019. Sales in the direct channel were 520.9 million dollars, an increase of 69 percent compared to 2020 and a 44 percent increase compared to 2019.

The company is forecasting second quarter earnings per share between 80 cents and 1 dollar, which excludes one-time costs related to the spin-off of Victoria’s Secret, compared to adjusted earnings per share of 25 cents in 2020 and 24 cents in 2019.

L Brands appoints CFOs for Bath & Body Works and Victoria’s Secret

L Brands also announced the appointment of chief financial officers for the standalone Bath & Body Works and Victoria’s Secret businesses. The company said, Wendy Arlin, currently SVP of finance and controller for L Brands, will become Bath & Body Works CFO, and Tim Johnson, previously CFO and chief administrative officer for Big Lots, will become Victoria’s Secret CFO.

As previously announced by the company, current L Brands CFO Stuart Burgdoerfer will retire at that time.

Commenting on the announcement, Sarah Nash, chair of L Brands board, said: “We are pleased to announce the appointment of two proven and talented individuals with strong public company expertise to the CFO roles of each standalone business.”

Wendy Arlin, the company added, currently serves as SVP of finance and controller for L Brands, leading corporate finance, SEC reporting and accounting, real estate and store design finance, and financial shared services, including inventory control, accounts payable, payroll, and banking and cash management. Prior to joining the company, she was an audit partner with KPMG.

Tim Johnson brings seven years of experience as a public company CFO, along with broad experience in strategic planning, financial planning and analysis, reporting, accounting, tax and investor relations, as well as risk management, asset protection and security and distribution centers. He also served as interim co-CEO of Big Lots in 2018 with the company’s chief merchant. He started his career in public accounting at Coopers & Lybrand, followed by corporate finance roles at then Limited Brands.