Victoria’s Secret Annual Report 2013 | Quarterly Earnings, Sales, Revenue and Profits

‘Victoria’s Secret’ is an iconic specialty retail brand that needs no introduction. The name is synonymous to all things feminine and includes intimate apparel, sleepwear and beauty products. This largest American retailer of lingerie was founded by Roy Raymond in 1977. The company sells its products through catalogs (mail order/ shopping catalogs, sending out 375 million every year).  Raymond studied the lingerie market for 8 years before borrowing $40,000 each from his parents and bank to establish the first Victoria’s Secret store in Stanford Shopping Center in Palo Alto, California. The company had a sales revenue of $6.12 billion with an operating income of $1billion in 2012.  The company also offers shoes, including heels and pumps, walking workouts, sandals, sneakers, ballet flats, and boots; swim suits and accessories; makeup, fragrance, body care, hair care and skin care products; and travel products and accessories. Victoria’s Secret is wholly owned and by publicly traded as L Brands Company. L Brands, Inc. was formerly known as Limited Brands, Inc, incorporated on March 16, 1982. The Company operates in two segments: Victoria’s Secret and Bath & Body Works. Victoria’s Secret Stores are although under the wrap of L Brands, but it is unquestionably the largest subsidiary of L Brands (more than 40% of sales) is also it is #1 North American specialty retailer of women’s intimate apparel.

Here is a synopsis of few recent key financial facts about the company:

Profitability Profit Margin (TTM) 7.63 %
  Operating Margin (TTM) 16.69 %
Income Statement EBITDA   2.21 Billion
  Net Income Available to Common (TTM) $824.83 Million
  Revenue (TTM) $10.81  Billion
  Revenue Per Share (TTM) $37.42
  Quarterly Revenue Growth (YOY): 5.90 %
  Quarterly Earnings Growth (YOY) 24.30%
  Gross Profit (TTM) $ 4.39 Billion
Balance Sheet Total Cash Per Share (Most recent Quarter) $1.90
  Book Value Per Share (Most recent Quarter)                                             (-) $2.97

TTM= Trailing Twelve Months (As of Nov 2, 2013) 

Most recent Quarter: As of Nov 2, 2013

Victoria’s Secret: Annual Sales, Annual Revenue, Annual Profits

The company has been able to maintain the growth of total revenue for last four fiscal years but the rate of the growth had moved in a downward direction. However, the gross profits both by volume and rate have gone up positively because the company had been able to control the expenses on Cost of Goods Sold. The gross profit percent figure on total revenue for the last four year ends were: January 2010 (40.94%), January 2011(43.16%), January 2012 (44.57%) and Feb 2013 (47.87%). The ‘Earning Before Taxes’ (EBT) have remained flat over last three years but differences in Net Income were caused by the different Income Tax Expenses.

Currency In US$ (Millions) Feb 02,  2013 Jan 28, 2012 Jan 29, 2011 Jan 30, 2010
Revenues 10,459.0 10,364.0 9,613.0 8,632.0
Total Revenues 10,459.0 10,364.0 9,613.0 8,632.0
Cost Of Goods Sold 5,452.0 5,744.0 5,464.0 5,098.0
Gross Profit 5,007.0 4,620.0 4,149.0 3,534.0
Total Selling General & Admin Expenses 3,297.0 3,074.0 2,859.0 2,672.0
Other Operating Expenses, Total 3,297.0 3,074.0 2,859.0 2,672.0
Operating Income 1,710.0 1,546.0 1,290.0 862.0
Interest Expense -316.0 -246.0 -208.0 -237.0
Interest And Investment Income 13.0 56.0
Total Other Non-Operating Expenses 11.0 149.0 27.0 19.0
Other Non-Operating Income (Expenses) 6.0 149.0 27.0 19.0
Merger & Restructuring Charges -17.0 -24.0
Impairment Of Goodwill -3.0
Gain (Loss) On Sale Of Investments 86.0 117.0 9.0
Gain (Loss) On Sale Of Assets 111.0
Total Other Unusual Items -120.0 -395.0 -31.0
EBT, Including Unusual Items 1,281.0 1,227.0 1,251.0 650.0
Income Tax Expense 528.0 377.0 446.0 202.0
Earnings From Continuing Operations 753.0 850.0 805.0 448.0
Net Income 753.0 850.0 805.0 448.0
Net Income To Common Including Extra Items 753.0 850.0 805.0 448.0
Net Income To Common Excluding Extra Items 753.0 850.0 805.0 448.0

 

Victoria’s Secret: Quarterly Earnings

The total revenue dropped considerably from 44% in Q4 from Q1, the most part of the expenses on Cost of Goods Sold remained flat, did not come down proportionately, it rather jumped from the previous 39.78 % (Q1) to 60.54% (in Q4). The Operating Income in Q4 is also much less than other quarters. The EBT figure is 50% of Q3 amount.

Currency In US$ (Millions) Nov 2, 2013 (Press Release) (Q4) Aug 3, 2013(Q3) May 4, 2013(Q2) Feb 2, 2013 (Q1)
Revenues 2,171.1 2,516.0 2,268.0 3,856.0
Total Revenues 2,171.1 2,516.0 2,268.0 3,856.0
Cost Of Goods Sold 1,314.4 1,527.0 1,327.0 1,534.0
Gross Profit 856.7 989.0 941.0 2,322.0
Total Selling General & Admin Expenses 645.7 631.0 630.0 1,414.0
Total Other Operating Expenses 645.7 631.0 630.0 1,414.0
Operating Income 211.0 358.0 311.0 908.0
Interest Expense -76.8 -77.0 -79.0 -82.0
Interest And Investment Income 0.0
Total Other Non-Operating Expenses 7.2 1.0 3.0 5.0
Other Non-Operating Income (Expenses) 7.2 -12.0 9.0 -5.0
Merger & Restructuring Charges 0.0
Total Other Unusual Items -120.0
EBT, Including Unusual Items 141.4 282.0 235.0 711.0
Income Tax Expense 49.4 104.0 92.0 300.0
Earnings From Continuing Operations 92.0 178.0 143.0 411.0
Net Income 92.0 178.0 143.0 411.0
Net Income To Common Including Extra Items 92.0 178.0 143.0 411.0
Net Income To Common Excluding Extra Items 92.0 178.0 143.0 411.0
         

 

However, the most recent TTM figure is not looking as gloomy like the last quarter end. Here we find that the company has made consistence growth in the Revenue over a period of five financial years, Net Income, Net Margin and EPS are consistent over last 4 years period.

Financials TTM Jan 2013 Jan 2012 Jan 2011 Jan 2010
Revenue USD Mil

10,690

10,459

10,364

9,613

8,632

Gross Margin %

41.8

41.9

39.1

37.8

35.1

Operating Income USD Mil

1,644

1,573

1,238

1,284

868

Operating Margin %

15.4

15.0

11.9

13.4

10.1

Net Income USD Mil

806

753

850

805

448

Earnings Per Share USD

2.73

2.54

2.70

2.42

1.37

Profitability          
Tax Rate %

40.56

41.22

30.73

35.65

31.08

Net Margin %

7.54

7.20

8.20

8.37

5.19

Asset Turnover (Average)

1.69

1.72

1.65

1.41

1.22

Return on Assets %

12.73

12.42

13.54

11.82

6.33

Financial Leverage (Average)

44.58

4.37

3.29

Return on Equity %

105.39

44.00

22.09

Return on Invested Capital %

17.75

15.10

5.88

Interest Coverage

5.30

5.05

5.99

7.01

3.74

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