Item 2.02. Results of Operations and Financial Condition
And
Item 7.01. Regulation FD Disclosure.
The following information is being furnished pursuant to Item 2.02, "Results of
Operations and Financial Condition" and Item 7.01, "Regulation FD Disclosure",
and shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
On July 13, 2021, L Brands, Inc. (the "Company" or "L Brands") issued a press
release announcing a number of updates, including reporting net sales results
for the nine weeks ended July 3, 2021. In addition, the press release contains
updated guidance with respect to second quarter 2021 earnings. A copy of the
press release is attached hereto as Exhibit 99.1 and is hereby incorporated by
reference herein.
The expected second quarter earnings per share and operating income described
above are based on information available at this time and incorporate a variety
of assumptions, estimates and projections, including among others, with regard
to the impact of COVID-19. The Company's actual earnings per share and operating
income for the second quarter will be influenced by future developments and
other factors, many of which are difficult to predict and not within the
Company's control. The Company cautions not to place undue reliance on its
expectations for the second quarter as actual results may differ from the
expected results described above.
Item 8.01. Other Events.
New Share Repurchase Plan
On July 13, 2021, the Company also announced that the Board of Directors of the
Company has authorized a new $1.5 billion share repurchase program. This program
replaces the Company's previous $500 million repurchase authorization, of which
approximately $36.2 million remained outstanding as of July 13, 2021.
A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated by reference herein, except with regards to the fifth paragraph
therein regarding second quarter 2021 guidance.
Legal Proceedings Update
As L Brands has previously disclosed, on May 19, 2020 and January 12, 2021, L
Brands shareholders filed derivative lawsuits in the Court of Common Pleas for
Franklin County, Ohio (subsequently removed to the United States District Court
for the Southern District of Ohio) and the Delaware Court of Chancery,
respectively, naming as defendants certain current and former directors and
officers of L Brands and alleging, among other things, breaches of fiduciary
duty through asserted violations of law and failures to monitor workplace
conduct (the "Lawsuits"). In addition, L Brands also received litigation and
books-and-records demands from other shareholders related to the same matters
(together with the Lawsuits, the "Actions"), including from the Attorney General
of Oregon on behalf of the State of Oregon.
These shareholders, including the Attorney General of Oregon, the Detroit Police
and Fire Retirement System, and several individuals, have agreed upon material
terms of a settlement with a Special Committee of the L Brands Board of
Directors resolving the Actions, and the shareholders and L Brands plan to
present the settlement to a federal judge promptly. The settlement-in-principle
would resolve all derivative claims that have been or could have been asserted
in the Actions or that involve in any way the allegations referred to in the
Actions and would release all such claims against L Brands (and its
subsidiaries) and past and present L Brands employees, officers and directors,
among others. As part of the settlement-in-principle, L Brands (and its
subsidiaries, including Victoria's Secret & Co. ("Victoria's Secret")) has
agreed to implement and fund certain management and governance measures. The
settlement remains subject to the filing of a stipulation of settlement with the
federal court and court approval of the final terms set forth in the stipulation
of settlement.
Item 9.01. Financial Statements and Exhibits.
(b) Pro Forma Financial Information
On July 9, 2021, the Company announced that the Board of Directors of the
Company approved the previously announced separation of its Victoria's Secret
business (the "Separation"), which will be achieved through the distribution of
100% of the shares of Victoria's Secret to holders of the Company's common stock
on the record date of July 22, 2021. The distribution is expected to be
completed after the New York Stock Exchange market closing on August 2, 2021,
subject to a number of customary conditions, including the Securities and
Exchange Commission having declared effective Victoria's Secret's Registration
Statement on Form 10, as amended. Following the Separation, Victoria's Secret
will be an independent, publicly traded company, and the Company will retain no
ownership interest in Victoria's Secret. The unaudited pro forma consolidated
statements of income (loss) of the Company for the thirteen weeks ended May 1,
2021, and for the years ended January 30, 2021, February 1, 2020, February 2,
2019 and the unaudited pro forma consolidated balance sheet of the Company as of
May 1, 2021 are filed as Exhibit 99.2 to this Current Report on Form 8-K.
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(d) Exhibits
Exhibit Press Release dated July 13, 2021 entitled "L Brands Reports Second
99.1 Quarter-To-Date 2021 Sales and Increases Second Quarter Earnings
Guidance".
Exhibit Unaudited pro forma consolidated statements of income (loss) of the
99.2 Company for the thirteen weeks ended May 1, 2021, and for the years
ended January 30, 2021, February 1, 2020 and February 2, 2019 and the
unaudited pro forma consolidated balance sheet of the Company as of May
1, 2021.
Exhibit Cover Page Interactive Data File (embedded within the Inline XBRL
104 document)
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