L Brands Reports Record Third Quarter 2020 Results

Commenting on the results, Nigel Newton, Chief Executive, said: “Bloomsbury experienced excellent trading in the first half with year-on-year profit growth of 60% to £4.0 million. This has delivered our highest first half earnings since 2008 and exceeded the Board’s expectations. Online book sales and e-book revenues were significantly higher. The Consumer division had an excellent performance with 17% revenue growth and a £2.1 million increase in profit before tax and highlighted items to £2.7 million. Stand-out bestsellers during the period included Why I’m No Longer Talking to White People about Race, Crescent City: House of Earth and Blood, White Rage, Humankind and Such A Fun Age. In the Non-Consumer division, our strategy of developing online academic resources, conceived five years ago, meant we were well placed to benefit from the accelerated shift by academic institutions to digital products to support remote learning. We saw 47% growth in sales of Bloomsbury Digital Resources as a result.

A summary of results for the second quarter ended July 30, 2022 as compared to the second quarter ended July 31, 2021: *Net sales of $805 million, down 7% as compared to last year on a reported basis and down 4% on a constant currency basis. *Gross profit rate of 57.9%, down approximately 730 basis points as compared to last year. The year-over-year decrease was primarily driven by higher product costs, which contributed 750 basis points, and the adverse impact of exchange rates, which accounted for 30 basis points. These impacts where partially offset by higher AUR at Abercrombie. *Operating expense, excluding other operating income, net, was up 4% compared to last year. The increase was driven primarily by inflation and higher digital fulfillment expenses partially offset by lower incentive-based compensation. Operating expense as a percentage of sales increased to 58.0% from 52.1% last year. *Operating loss of $2 million and $0 million on a reported and adjusted non-GAAP basis, respectively, as compared to operating income of $115 million and $116 million last year, on a reported and adjusted non-GAAP basis, respectively.

Second Quarter Highlights • Consolidated revenue of $161.6 billion, up 5.7%, or 5.4% in constant currency (“cc”)1 • Consolidated gross margin rate up 50bps on lapping elevated markdowns and supply chain costs, partially offset by ongoing mix pressure in grocery and health & wellness • Consolidated operating expenses as a percentage of net sales grew 33bps • Consolidated operating income up $0.5 billion, or 6.7%, adjusted operating income up 8.1%