Limited Brands 2013-03-11

Limited Brands
ANALYSIS for NYSE : LTD MARCH 11, 2013
VICTORIA'S SECRET US STORES
49.87
$14.4 B MKT CAP
Trefis Estimate
45.09
$13 B MKT CAP
Market Price
Victoria's Secret US Revenue per Square Foot 4 Average Square Footage per Victoria's Secret US Store 5 Number of Victoria's Secret US Stores 6 Victoria's Secret US Stores EBITDA Margin 7
BATH & BODY WORKS US STORES
See the Full Analysis for Limited Brands on Trefis

CORPORATE SNAPSHOT
Limited Brands sells lingerie, personal care & beauty products, apparel and accessories. The company owns the following brands: Victoria's Secret, PINK, Bath & Body Works, C.O. Bigelow, La Senza, White Barn Candle Co. and Henri Bendel brands. Limited Brands is one of the largest specialty retailers in the U.S. with over 3,000 specialty stores nationwide. The company also operates in Canada as well as 40 other countries. Additionally, the company's products are sold through the Victoria's Secret Catalog and online.
VALUATION HIGHLIGHTS
Bath & Body Works US Revenue per Square Foot 9 Average Square Footage per Bath & Body Works US Store 10 Number of Bath & Body Works US Stores 11 Bath & Body Works US Stores EBITDA Margin 12
VICTORIA'S SECRET DIRECT Victoria's Secret Direct Revenues 14
Victoria's Secret Direct EBITDA Margin 15

BATH & BODY WORKS DIRECT
1. Victoria's Secret US Stores constitute 48% of the Trefis price estimate for Limited Brands's stock. 2. Bath & Body Works US Stores constitute 30% of the Trefis price estimate for Limited Brands's stock. 3. Victoria's Secret Direct constitutes 19% of the Trefis price estimate for Limited Brands's stock.
Bath & Body Works Direct Revenues 17 Bath & Body Works Direct EBITDA Margin 18
INTERNATIONAL & OTHER International & Other Revenues 19
International & Other EBITDA Margin 20

APPENDICES
See the Interactive Valuation Breakdown on Trefis Our share price estimate and the overall company value is derived by summing-up the values of individual divisions/businesses in a sum-of-theparts analysis. The value of each division is calculated using a discounted cash flow (DCF) methodology. We forecast fundamental drivers like pricing, market share, and profit margins for different businesses in estimating the divisions value within the
Summary P&L for Limited Brands 24 Detailed Victoria's Secret US Stores P&L 25 Detailed Bath & Body Works US Stores P&L 26 Detailed Victoria's Secret Direct P&L 27 Detailed Bath & Body Works Direct P&L 28 Detailed International & Other P&L 29
DCF framework. The analysis below primarily focuses on those important forecasts that drive our share price and value estimate. Our complete analysis, including sources of historical data, underlying equations and additional discussion are available on www.trefis.com.
POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE
Below are key drivers of Limited Brands' value that present opportunities for upside or downside to the current Trefis price estimate for Limited Brands: Victoria's Secret US Stores Victoria's Secret US Revenue per Square Foot: Victoria's Secret US revenue per square foot increased from $581 in 2009 to $817 in 2012 as consumer spending picked up and the brand launched new products. Going forward, we expect revenue per square foot to increase and reach $1,020 by the end of the Trefis forecast period. If revenue per square foot increases to $1,200 by the end of the Trefis forecast period, there could be 10% upside to the Trefis estimate for Limited Brands. On the other hand, if it remains at the same level, there can be 10% downside to the Trefis estimate. Victoria's Secret US Stores EBITDA Margin: Victoria's Secret US stores EBITDA margin increased to 24.95% in 2011 primarily due to higher merchandise margins. Going forward we expect the figure to increase and reach 26.8% by the end of the Trefis forecast period. If margins increase to 29% by the end of the Trefis forecast period, there could be 5% upside to the Trefis estimate for Limited Brands. On the other hand, if it decreases to 24.5%, there can be 5% downside to the Trefis estimate.
SOURCES OF VALUE
We believe Victoria's Secret U.S. and Bath & Body Works U.S. stores are the largest sources of value for Limited Brands. Margins for Bath & Body Works Higher, But Average Size and Revenue Share Higher for Victoria's Secret EBITDA margins for Victoria's Secret is around 23% compared to 27% for Bath & Body Works. However, the average size of a Victoria's Secret U.S. store is almost 2.5x that of Bath & Body Works. Victorias Secret generates more than $4 billion in sales a year. It is the fastest growing brand with revenue share increasing from 40% in 2009 to 48% in 2012.
KEY TRENDS
Diversity of Products has Increased Intimate Apparel used to be uniform with very few differences among products. Style and Fit were consistent across brands with very little diversity.
TREFIS ANALYSIS for LIMITED BRANDS
CONTENT@TREFIS.COM
+ 1 617 394 8763
However, over time, many new innovations have occurred leading to more variety and more customized options for women. Increasing Competition in U.S. Intimate Apparel Industry Womens intimate apparel industry in the US has witnessed an increase in competition as more lingerie brands have ventured into this very lucrative business. Many retailers such as Kohl's and JC Penney have added new lingerie lines and have started offering services such as bra fitters. The heightened competition is a change from the prior two decades, when Victoria's Secret largely had the market to itself. Effective Merchandising and Marketing Key to Growth in Personal Care & Beauty Market In the developed U.S. personal care and beauty market, price competition is fierce, brand loyalty is low and private label is a real threat to manufacturers. The challenge for manufacturers in this category is to offer added benefits that will drive consumers away from budget product lines. With few nonusers to convert and limited population growth, the burden of further expansion comes down to marketing efforts and product innovation See the Full Analysis for Limited Brands on Trefis
CONTENT@TREFIS.COM
+ 1 617 394 8763
Victoria's Secret US Stores

The Victoria's Secret US Stores division constitutes 47.9% of our $49.87 price estimate for this stock, based on our sum of the parts analysis.The most important drivers for the Victoria's Secret US Stores business are: Victoria's Secret US Revenue per Square Foot Average Square Footage per Victoria's Secret US Store Number of Victoria's Secret US Stores Victoria's Secret US Stores EBITDA Margin
VICTORIA'S SECRET US REVENUE PER SQUARE FOOT
Victoria's Secret US Revenue per Square Foot refers to the average annual revenue per square feet of retail store space for Victoria's Secret stores and PINK stores in the U.S. This is an important metric that measures store productivity and drives operating margins.
Victoria's Secret US Revenue per Square Foot (K $)
1.00 0.75 0.50 0.25 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Victoria's Secret US Revenue per Square Foot increased from $581 in 2009 to $663 in 2010 as consumer spending picked up. The figure improved to $817 in 2012, driven by new product launch, strong marketing and consolidation of underperforming stores. Going forward, we expect revenue per square foot to increase and reach $1,020 by the end of the Trefis forecast period. Forecast Rationale Supporting 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in consumer confidence and a decrease in unemployment should result in an increase in comparable sales for Limited Brands going forward.
CONTENT@TREFIS.COM
+ 1 617 394 8763
2. CLOSING OF UNDER PERFORMING VICTORIA'S SECRET STORES. Closing of under performing Victoria's Secret stores remains a high priority for the company. The trend has been evident over the past two years, as Limited closed 19 and 20 Victoria's Secret stores in 2011 and 2012, respectively. We expect this to continue in 2013 as well with the retailer planning to close 18 stores. This should act as a near-term tailwind for the division's revenue per square foot. 3. EXPANSION OF PINK PINK, launched as the lifestyle brand of the company in 2004, targets primarily college girls. Unlike Victoria's Secret, the penetration of PINK in US market is quite limited, presenting Limited Brands a long runway of growth for this brand. Opening exclusive new PINK stores and adding full merchandise of PINK to existing Victoria's Secret stores should drive revenue per square foot higher going forward. 4. EXPANSION OF BEAUTY CATEGORY SHOULD DRIVE REVENUE PER SQUARE FOOT Beauty segment is one of the fastest growing categories at Victoria's Secret Stores. Currently beauty represents nearly 20% of Victoria's Secret US sales. The category has higher revenue per square feet than other categories. An increase in contribution of beauty category to Victoria's Secret's sales should reflect as an increase in the division's revenue per square foot. 5. EXPANSION INTO NEW PRODUCT CATEGORIES Victoria's Secret over the past few years has expanded its product offering outside of its core lingerie products. Victoria's Secret now also offers shoes, evening wear, accessories, handbags, luggage and fragrances. Additionally, other categories such as swimwear, sportswear and loungewear also represent promising new growth categories for Victoria's Secret. We expect this product category expansion to continue in the future as Victoria's Secret leverages its strong brand. Increased product offerings at Victoria's Secret stores should result in an increase in Victoria's Secret US Revenue per Square Foot. Mitigating 6. INCREASING COMPETITION IN THE HIGH MARGIN INTIMATE APPAREL MARKET Many retailers. online and brick & mortar, are starting to include intimate apparel as part of their product offerings./srt]. Even established specialty retailers such American Eagle Outfitters, Abercrombie & Fitch etc. are out with new lingerie lines. As a result of increasing competition, Victoria's Secret US stores may lose market share going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
AVERAGE SQUARE FOOTAGE PER VICTORIA'S SECRET US STORE
Average Square Footage per Victoria's Secret US Store refers to the average retail space area per Victoria's Secret U.S. store measured in terms of square feet units. This typically depends on store formats. The company generally decides the size of a store at a particular location on factors like availability of space, demography of the region, the expected traffic and real estate prices.
CONTENT@TREFIS.COM
+ 1 617 394 8763
Average Square Footage per Victoria's Secret US Store (K)
6 5 4 3 2 1 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
The Average Square Footage per Victoria's Secret US Store increased from 5,778 sq. ft. in 2009 to 5,990 sq. ft. in 2012. Going forward, we believe the figure will continue to increase. Forecast Rationale Trefis considere the following factors for its forecast: Supporting 1. EXISTING STORE EXPANSION AS PART OF GROWTH STRATEGY Part of Limited Brands' growth strategy is to expand its existing stores, leveraging the success of strategic locations. Limited plans to expand its existing Victoria's Secret store size to add new categories such as beauty, PINK, swimwear, VSX and broader bra assortments. Mitigating 2. TRENDS IN THE REAL ESTATE MARKET As real estate prices increase and availability of desired spaces in prime locations become scarce, Limited Brands should find it increasingly difficult to increase its store size. Sources for historical data and explanations can be found on the Trefis.com website (link)
NUMBER OF VICTORIA'S SECRET US STORES
This refers to the number of Victoria's Secret stores and PINK stores operating in the US at the end of fiscal year.
CONTENT@TREFIS.COM
+ 1 617 394 8763
Number of Victoria's Secret US Stores (K)
1.00 0.75 0.50 0.25 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Number of Victoria's Secret US Stores has declined from 1,043 in 2008 to 1,017 in 2011 as the company shut down some of its under-performing stores. However, the figure slightly increased to 1,019 in 2012 with a mix of store closure and PINK's expansion. Victoria's Secret is by far the largest lingerie retailer in the U.S.. Competitors such as Frederick's of Hollywood, Abercrombie's Gilly Hicks and American Eagle Aerie operate far fewer number of stores. Going forward, we expect the store count to increase in 2013 with PINK's expansion and thereafter stabilize at 1,046 by the end of the Trefis forecast period. Forecast Rationale Supporting: 1. CLOSING OF UNDER PERFORMING VICTORIA'S SECRET STORES Closing of under performing Victoria's Secret stores remains a high priority for the company. The trend has been evident over the past two years as Limited closed 19 and 20 Victoria's Secret stores in 2011 and 2012, respectively. The retailer will continue this in 2013 as well with another 18 stores planned for closure. Mitigating: 2. OPENING OF VS PINK STORES Expanding PINK is one of the company's key initiatives in the US. While the company opened just 2 PINK stores in 2011, it opened 19 PINK stores in 2012. If the number of new VS PINK stores exceed the number of VS under performing stores closed, number of VS stores should increase. Sources for historical data and explanations can be found on the Trefis.com website (link)
VICTORIA'S SECRET US STORES EBITDA MARGIN
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) are profits after factoring in typical expenses, such as Cost of Goods and Services Sold, SG&A Expenses, and R&D Expenses. EBITDA Margin represents divisional EBITDA as a percentage of divisional revenues. We adjust EBITDA figures to exclude non-recurring charges and noncash charges, such as stock-based compensation expenses.
CONTENT@TREFIS.COM
+ 1 617 394 8763
Victoria's Secret US Stores EBITDA Margin (%)
25 20 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Victoria's Secret US Stores EBITDA Margin increased from 20.11% in 2009 to 23.82% in 2010. The increase was driven by higher merchandise margins due to a decrease in promotional activity in 2010. In 2011 the figure further improved to 24.95%. Going forward we expect the divisional EBITDA margin to increase and reach 26.8% by the end of the Trefis forecast period. Forecast Rationale Supporting 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in macro-economic conditions should result in lesser promotional activities this year, which should reflect as an increase in near-term margins. 2. GROWTH OF HIGH-MARGIN CATEGORIES Limited is focusing on the growth of high margin categories such as beauty. Beauty segment is one of the fastest growing categories in Victoria's Secret Stores. Currently beauty represents 20% of Victoria's Secret US sales. An increase in contribution of beauty category to Victoria's Secret's sales should result in EBITDA margins increasing. 3. OPERATING LEVERAGE A faster growth of revenues vs. operating expenses should result in an improvement of EBITDA margins going forward. Mitigating 4. INCREASING COMPETITION IN THE US INTIMATE APPAREL MARKET Victoria's Secret US stores should face increasing competition as new players and established brands enter the intimate apparel market. This should lead to an increase in marketing expense as Victoria's Secret tries to defend its market share. Heightened competition may lead to competitive pricing and could negatively impact EBITDA margins in the future. Sources for historical data and explanations can be found on the Trefis.com website (link)
CONTENT@TREFIS.COM
+ 1 617 394 8763
Note that Limited Brands reports financial information for fiscal year ended January 31st. For the purposes of our analysis, we have treated Limited Brands' fiscal year figures as equivalent to calendar year ended December 31st figures.
Total Revenue (Bil $) Direct Expense (Bil $) Indirect Expense (Mil $) Adjusted EBITDA (Bil $) Free Cash Flow (Mil $)
CY09 3.50 2.79 114 0.70 n/a
CY10 4.02 3.06 227 0.96 n/a
CY11 4.56 3.43 370 1.14 n/a
CY12 4.98 3.69 546 1.29 n/a
CY13 5.38 3.96 814 1.42 609
CY14 5.74 4.21 778 1.54 757
CY15 5.95 4.35 782 1.60 815
CY16 6.13 4.48 811 1.64 833
CY17 6.26 4.58 821 1.68 858
CY18 6.39 4.67 841 1.71 873
CY19 6.46 4.72 848 1.73 885
In addition, you can see the detailed P&L for the Victoria's Secret US Stores business in the Appendix (link)
Bath & Body Works US Stores

The most important drivers for the Bath & Body Works US Stores business are: Bath & Body Works US Revenue per Square Foot Average Square Footage per Bath & Body Works US Store Number of Bath & Body Works US Stores Bath & Body Works US Stores EBITDA Margin
BATH & BODY WORKS US REVENUE PER SQUARE FOOT
Bath & Body Works US Revenue per Square Foot refers to the average annual revenue per square feet of retail store space for Bath & Body Works US stores. This is an important metric that measures retail productivity and drives operating margins.
Bath & Body Works US Revenue per Square Foot ($)
750
500
250
0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
CONTENT@TREFIS.COM
+ 1 617 394 8763
Bath & Body Works US Revenue per Square Foot increased from $587 in 2009 to $620 in 2010. The growth was primarily driven by growth in the Signature Collection (including the re-launch of the mens line), home fragrance and antibacterial categories. The figure increased to $658 in 2011 due to a 6% increase in Bath & Body Works comparable store sales. In 2012, it further rose to $724 as Bath & Body Works continued its strength in signature collection, home fragrance and soap & sanitizer. We expect the figure to increase going forward and reach $898 by the end of the Trefis forecast period. Forecast Rationale Supporting: 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in consumer confidence and a decrease in unemployment should result in an increase in comparable sales for Limited Brands going forward. 2. CLOSING OF UNDER PERFORMING BATH & BODY WORKS STORES Closing of under performing Bath & Body Works stores is a key initiative for the company. This has been evident over the past two years as Limited closed 19 and 20 Bath & Body Works stores in 2011 and 2012, respectively. We expect this to continue, which should act as a near-term tailwind for the division's revenue per square foot. 3. LAUNCH OF NEW PRODUCTS Launching new products is a key growth strategy for Bath & Body Works. The company is particularly focused on introducing new fragrances and anti-bacterial products, which should result in an increase in the division's revenue per square foot going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
AVERAGE SQUARE FOOTAGE PER BATH & BODY WORKS US STORE
Average Square Footage per Bath & Body Works US Store refers to the average retail space area per Bath & Body Works US store measured in terms of square feet units. This typically depends on store formats. The company generally decides the size of a store at a particular location on factors like availability of space, demography of the region, the expected traffic and real estate prices.
CONTENT@TREFIS.COM
+ 1 617 394 8763
10
Average Square Footage per Bath & Body Works US Store (K)
2.5 2.0 1.5 1.0 0.5 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Average Square Footage per Bath & Body Works US Store has remained constant at around 2,370 sq. feet historically. Going forward we expect the figure to increase slightly. Forecast Rationale Supporting: 1. ADDITION OF NEW CATEGORIES Limited plans to add new categories to its Bath & Body Works stores particularly in fragrance and anti-bacterial segments. This should reflect as an increase in Average Square Footage per Bath & Body Works US Store going ahead. Sources for historical data and explanations can be found on the Trefis.com website (link)
NUMBER OF BATH & BODY WORKS US STORES
This refers to the number of Bath & Body Works stores operating in the US at the end of fiscal year
CONTENT@TREFIS.COM
+ 1 617 394 8763
11
Number of Bath & Body Works US Stores (K)
1.50 1.25 1.00 0.75 0.50 0.25 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Number of Bath & Body Works US Stores has declined from 1,638 in 2008 to 1,571 in 2012 as the company shutdown some of its under-performing stores. We believe, Number of Bath & Body Works US Stores will decrease further going forward as the company closes more under performing Bath & Body Works stores in the U.S. Forecast Rationale Supporting: 1. CLOSING OF UNDER PERFORMING BATH & BODY WORKS STORES Closing of under performing Bath & Body Works stores is a key initiative for the company. This has been evident over the past two years as Limited closed 19 and 20 Bath & Body Works stores in 2011 and 2012, respectively. We expect this to continue, which should act as a near-term tailwind for the division's revenue per square foot. Sources for historical data and explanations can be found on the Trefis.com website (link)
BATH & BODY WORKS US STORES EBITDA MARGIN
CONTENT@TREFIS.COM
+ 1 617 394 8763
12
Bath & Body Works US Stores EBITDA Margin (%)
25 20 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bath & Body Works US Stores EBITDA Margin increased from 23.42% in 2009 to 26.31% in 2010. The increase was primarily driven by higher merchandise margins as a result of a decrease in cost of goods sold due to cost cuts in the Bath & Body Works business. In 2011 the figure improved slightly to 26.48% due to higher merchandise margins. This increase in margins was partially offset by an increase in buying and occupancy expenses primarily driven by higher net sales and store related activity. Going forward we expect the divisional EBITDA margin to increase and reach 28.3% by the end of the Trefis forecast period. Forecast Rationale Supporting 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in macro-economic conditions should result in lesser promotional activities this year, which should reflect as an increase in near-term margins. 2. OPERATING LEVERAGE Faster growth of revenues vs. operating expenses should result in an improvement of EBITDA margins going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $) Direct Expense (Bil $) Indirect Expense (Mil $)
CY09 2.28 1.74 36.9
CY10 2.37 1.75 135
CY11 2.49 1.83 184
CY12 2.71 1.96 253
CY13 2.81 2.03 386
CY14 2.90 2.09 348
CY15 3.01 2.16 348
CY16 3.09 2.22 361
CY17 3.15 2.26 364
CY18 3.21 2.30 373
CY19 3.28 2.35 380
CONTENT@TREFIS.COM
+ 1 617 394 8763
13
Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
CY09 CY10 CY11 532 624 659 n/a n/a n/a
CY12 744 n/a
CY13 781 395
CY14 CY15 815 850 466 501
CY16 CY17 873 890 511 525
CY18 CY19 908 927 534 547
In addition, you can see the detailed P&L for the Bath & Body Works US Stores business in the Appendix (link)
Victoria's Secret Direct

The most important drivers for the Victoria's Secret Direct business are: Victoria's Secret Direct Revenues Victoria's Secret Direct EBITDA Margin
VICTORIA'S SECRET DIRECT REVENUES
Victoria's Secret Direct Revenues refers to the annual revenue generated through the Victoria's Secret Catalogs and victoriassecret.com website.
Victoria's Secret Direct Revenues ($ Bil)
1.75 1.50 1.25 1.00 0.75 0.50 0.25 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Victoria's Secret Direct Revenues increased 8% in 2010 to $1,502 million. The figure increased in 2012 to $1,593 million, although at a slower rate as compared to 2010 and 2011. Going forward we expect Victoria's Secret direct revenues to increase and reach $1,865 million by the end of the Trefis forecast period. Forecast Rationale Supporting: 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the
CONTENT@TREFIS.COM
+ 1 617 394 8763
14
board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in consumer confidence and a decrease in unemployment should result in an increase in comparable sales for Limited Brands going forward. 2. GROWTH IN E-COMMERCE With increasing internet penetration, more consumers are buying their clothes online. We believe that online retail will continue to grow in the future with an advancement in technology. 3. ADDITION OF DIFFERENT CHANNELS TO THE DIRECT BUSINESS Limited Brands is focused on developing other channels of direct business such as m-commerce and f-commerce (f for Facebook). Mobile channel currently contributes a substantial amount to Victoria's Secret direct sales and with increasing smartphone penetration we expect this trend to continue going forward. Additionally, Victoria's Secret is one of the most followed brands on Facebook with nearly 19 million fans. This should translate into an increase in Victoria's Secret direct revenues going forward. 4. ADDITION OF NEW CATEGORIES Limited is adding new product categories to its direct business to grow revenues. Categories such as PINK, swim and beauty are quite popular on its direct channel and we expect this to drive revenues higher in the future. Sources for historical data and explanations can be found on the Trefis.com website (link)
VICTORIA'S SECRET DIRECT EBITDA MARGIN
Victoria's Secret Direct EBITDA Margin (%)
30 25 20 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Victoria's Secret Direct EBITDA Margin increased consistently from 22.7% in 2009 to 28.06% in 2011. The increase was driven by higher merchandise margins as a result of decreased promotional activity. Going forward we expect the division's EBITDA margin to increase and reach 29.1% by the end of the Trefis forecast period.
CONTENT@TREFIS.COM
+ 1 617 394 8763
15
Forecast Rationale Supporting
1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in macro-economic conditions should result in lesser promotional activities this year, which should reflect as an increase in near-term margins. 2. GROWTH OF HIGH-MARGIN CATEGORIES Limited is focusing on the growth of high margin categories such as beauty. Beauty segment is one of the fastest growing categories in Victoria's Secret Stores. Currently beauty represents 20% of Victoria's Secret US sales. An increase in contribution of beauty category to Victoria's Secret's sales should result in EBITDA margins increasing. 3. OPERATING LEVERAGE Faster growth of revenues vs. operating expenses should result in an improvement in EBITDA margins going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $) Direct Expense (Bil $) Indirect Expense (Mil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
CY09 1.39 1.07 19.6 315 n/a
CY10 1.50 1.10 72.5 400 n/a
CY11 1.56 1.12 102 436 n/a
CY12 1.59 1.14 120 456 n/a
CY13 1.66 1.18 201 478 276
CY14 1.71 1.21 180 494 313
CY15 1.76 1.25 177 510 333
CY16 1.79 1.27 183 521 338
CY17 1.83 1.30 184 531 347
CY18 1.85 1.31 187 537 349
CY19 1.87 1.32 188 542 353
In addition, you can see the detailed P&L for the Victoria's Secret Direct business in the Appendix (link)
CONTENT@TREFIS.COM
+ 1 617 394 8763
16
Bath & Body Works Direct

The most important drivers for the Bath & Body Works Direct business are: Bath & Body Works Direct Revenues Bath & Body Works Direct EBITDA Margin
BATH & BODY WORKS DIRECT REVENUES
Bath & Body Works Direct Revenues refers to the annual revenue generated through the sales at bathandbodyworks.com website.
Bath & Body Works Direct Revenues ($ Mil)
250 200 150 100 50 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bath & Body Works direct revenues increased from $108 million in 2009 to $182 in 2011, with an approximate CAGR of 30%. The figure steadily increased to $195 million in 2012. Going forward we expect Bath & Body Works direct revenues to increase and reach $287 million by the end of the Trefis forecast period. Forecast Rationale Supporting: 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in consumer confidence and a decrease in unemployment should result in an increase in comparable sales for Limited Brands going forward. 2. GROWTH IN E-COMMERCE With increasing internet penetration, more consumers are buying their clothes online. We believe that online retail will continue to grow in the future with an advancement in technology. Sources for historical data and explanations can be found on the Trefis.com website (link)
CONTENT@TREFIS.COM
+ 1 617 394 8763
17
BATH & BODY WORKS DIRECT EBITDA MARGIN
Bath & Body Works Direct EBITDA Margin (%)
35 30 25 20 15 10 5 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Bath & Body Works Direct EBITDA Margin increased from 31.5% in 2009 to 33.12% in 2010. In 2011 the figure declined slightly to 32.46%. Going forward we expect the divisional EBITDA margin to increase and reach 33.9% by the end of the Trefis forecast period. Forecast Rationale Supporting 1. GRADUALLY IMPROVING MACROECONOMIC CONDITIONS IN THE U.S. Consumer confidence dropped significantly in 2011 as the outlook for employment growth remained weak, resulting in decline in sales for apparel retailers across the board. However, macro conditions have slowly been improving and consumer confidence has rebounded in 2012. An improvement in macro-economic conditions should result in lesser promotional activities this year, which should reflect as an increase in near-term margins. 2. OPERATING LEVERAGE A faster growth of revenues vs. operating expenses should result in an improvement of EBITDA margins going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Mil $)
CY09 CY10 CY11 108 141 182
CY12 194
CY13 206
CY14 CY15 216 225
CY16 CY17 231 236
CY18 CY19 238 241
CONTENT@TREFIS.COM
+ 1 617 394 8763
18
Direct Expense (Mil $) Indirect Expense (Mil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
CY09 74.0 3.38 34.0 n/a
CY10 94.3 11.4 46.7 n/a
CY11 122 17.7 59.1 n/a
CY12 129 24.8 65.1 n/a
CY13 136 37.1 69.4 32.3
CY14 143 34.2 73.1 38.8
CY15 148 34.4 76.2 41.8
CY16 153 35.7 78.5 42.8
CY17 156 36.1 80.1 44.0
CY18 157 36.6 80.9 44.3
CY19 159 36.8 81.7 44.9
In addition, you can see the detailed P&L for the Bath & Body Works Direct business in the Appendix (link)
International & Other

The most important drivers for the International & Other business are: International & Other Revenues International & Other EBITDA Margin
INTERNATIONAL & OTHER REVENUES
International & Other Revenues refers to annual revenues from Henri Bendel and Limited Brands' international operations including La Senza.
International & Other Revenues ($ Bil)
1.50 1.25 1.00 0.75 0.50 0.25 0.00 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
International & Other Revenues increased from $1,365 million in 2009 to $1,578 million in 2010. The increase was primarily related to new Bath & Body Works stores in Canada, the introduction of Victorias Secret stores in Canada, revenue from Limited's international wholesale and franchise business and an increase in third-party sales at Mast Global. The figure declined by $9 million to $1,569 million primarily due to the divestiture of the third-party apparel sourcing business in the fourth quarter of 2011. This decrease was partially offset by new Victoria's Secret and Bath & Body Works stores in Canada, revenue from Limited's international wholesale and franchise business and favorable currency
CONTENT@TREFIS.COM
+ 1 617 394 8763
19
fluctuations related to its Canadian businesses. Revenues from this division declined to $982 million in 2012 due to the sale of Mast Global in 2011. Going forward we expect the revenues to increase gradually and reach $1,161 million by the end of the Trefis forecast period. Forecast Rationale Supporting: 1. GROWTH IN INTERNATIONAL BUSINESS Expanding its international footprint, particularly in Canada, remains a high priority for Limited Brands. Limited has increased its Bath & Body Works Canada store count from 31 in 2009 to 71 in 2012. Additionally, Victoria's Secret Canada stores have increased from 4 in 2009 to 16 in 2012. In 2013, the company plans to open an additional 8 Bath & Body Works stores and 8 Victorias Secret stores in Canada. Limited also launched its first Victoria's Secret flagship store in London in the summer of 2012. The growth in Victoria's Secret international and Bath & Body Works international should be a major catalyst for divisional revenues going ahead. 2. EXPANSION INTO NEW PRODUCT CATEGORIES Victoria's Secret over the past few years has expanded its product offering outside of its core lingerie products. Victoria's Secret now also offers shoes, evening wear, accessories, handbags, luggage and fragrances. Additionally, other categories such as swimwear, sportswear and loungewear also represent promising new growth categories for Victoria's Secret. We expect this product category expansion to continue in the future as Victoria's Secret leverages its strong brand. Increased product offerings at Victoria's Secret stores should result in an increase in International & Other Revenues. 3. RESTRUCTURING OF LA SENZA Limited is currently undertaking a significant repositioning of its La Senza business in Canada. During the fourth quarter of 2011, the company initiated a restructuring program designed to resize La Senza's store fleet and relocate its home office from Montreal, Canada to Columbus, Ohio. Additionally, the company is also closing under performing La Senza stores in Canada. Limited closed 22 La Senza stores in 2011 bringing the store count to 230 from 252 in 2010. We expect the restructuring efforts to increase La Senza comps and thereby increase the International & Other Revenues going ahead. Mitigating: 4. LA SENZA'S POOR PERFORMANCE Despite strong performance in Limited's other business segments, La Senza has comped negatively over the past few quarters. If the same trend continues going forward, divisional revenues may decline. Sources for historical data and explanations can be found on the Trefis.com website (link)
INTERNATIONAL & OTHER EBITDA MARGIN
CONTENT@TREFIS.COM
+ 1 617 394 8763
20
International & Other EBITDA Margin (%)
15.0 12.5 10.0 7.5 5.0 2.5 0.0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
International & Other EBITDA Margin decreased from 13.65% in 2009 to 12.39% in 2010. The decline was primarily due to an increase in lower margin Mast Global third-party sales and an increased promotional stance to drive La Senza comps. The figure improved to 13.03% in 2011. Going forward we expect the figure to increase to 15.5% by the end of the Trefis forecast period. Forecast Rationale Supporting 1. INCREASE IN PERCENTAGE CONTRIBUTION OF INTERNATIONAL VICTORIA'S SECRET AND BATH & BODY WORKS REVENUES TO THE DIVISION'S NET REVENUES. Victoria's Secret and Bath & body Works margins are much higher than Mast & La Senza. As the percentage contribution of international Victoria's Secret and Bath & Body Works revenues to the division's net revenues increases, we expect the margin to increase. 2. OPERATING LEVERAGE A faster growth of revenues vs. operating expenses should result in an improvement of EBITDA margins going forward. Sources for historical data and explanations can be found on the Trefis.com website (link)
Total Revenue (Bil $) Direct Expense (Bil $) Indirect Expense (Mil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
CY09 1.36 1.18 78.4 186 n/a
CY10 1.58 1.38 184 195 n/a
CY11 1.57 1.36 245 204 n/a
CY12 0.98 0.85 152 128 n/a
CY13 1.02 0.88 170 143 -27.4
CY14 1.06 0.91 158 154 -3.83
CY15 1.09 0.93 149 164 15.2
CY16 1.12 0.95 155 171 15.2
CY17 1.14 0.96 160 176 16.5
CY18 1.15 0.97 162 178 16.3
CY19 1.16 0.98 163 180 16.7
CONTENT@TREFIS.COM
+ 1 617 394 8763
21
In addition, you can see the detailed P&L for the International & Other business in the Appendix (link)
CONTENT@TREFIS.COM
+ 1 617 394 8763
22
Learn More
Related Trefis Coverage
If you're interested in Limited Brands, you may also want to see the Trefis coverage for companies such as: Daimler AG Ford Honda General Motors Toyota Tesla Motors See the list of all companies covered by Trefis
2 Week Free Trial of Trefis Pro
Liked this report? Get access to even more comprehensive reports along with interactive analyses with Trefis Pro Try Trefis Pro for 2 weeks
About Trefis
Trefis.com was founded by MIT engineers and former Wall Street analysts who realized that most people do not understand the seemingly familiar companies around them including well known companies like Apple, Google, Coca Cola, GE, Ford and Gap to name a few. The Trefis platform uses extensive data to show in a single snapshot what drives the value of a company's business. We move beyond the qualitative notion "if you love the coffee at Dunkin Donuts, you should think about buying the stock," to answer quantitative questions like "If their coffee sales are up 10% next year but doughnut sales are down 5%, what happens to the value of the company?" Trefis analysts spend weeks evaluating each stock that we cover and utilize commonly used valuation methodologies to determine a Trefis price for each company. We present you with not only our synthesized view but also every single step within the valuation process used to determine the Trefis price which you can see via our interactive analysis on Trefis.com. Learn more about the Trefis story Read the Trefis FAQ
CONTENT@TREFIS.COM
+ 1 617 394 8763
23
Appendix
Summary P&L for Limited Brands

Summary P&L for Limited Brands Total Revenues (Bil $) Victoria's Secret US Stores (% of
total)
CY09 CY10 CY11 8.63 9.61 10.4 40.5 41.8 24.7 15.6 1.47 16.4 7.39 43.0 28.1 18.0 2.10 8.79 2.22 43.0 28.1 18.0 2.10 8.79 0.63 36.0 21.4 11.5 1.81 29.2 44.0 24.0 15.0 1.76 15.1 7.87 45.6 26.4 17.5 2.36 8.18 2.50 45.6 26.4 17.5 2.36 8.18 0.92 40.2 20.1 11.1 1.92 26.7
CY12 10.5 47.6 25.9 15.2 1.86
CY13 11.1 48.6 25.4 14.9 1.86
CY14 CY15 11.6 12.0 49.4 25.0 14.7 1.86 9.14 8.56 50.0 26.5 16.1 2.38 5.02 3.07 50.0 26.5 16.1 2.38 5.02 1.50 51.9 23.2 12.0 2.28 10.5 49.5 25.0 14.6 1.87 9.10 8.84 49.9 26.6 16.0 2.38 5.14 3.20 49.9 26.6 16.0 2.38 5.14 1.49 52.4 23.4 11.9 2.30 10.0
CY16 CY17 12.4 12.6 49.6 25.0 14.5 1.88 49.6 25.0 14.5 1.88
CY18 CY19 12.8 13.0 49.8 25.0 14.4 1.86 8.96 9.42 50.1 26.6 15.7 2.37 5.22 3.42 50.1 26.6 15.7 2.37 5.22 1.60 52.5 23.3 11.7 2.28 10.1 49.6 25.2 14.3 1.86 8.93 9.54 50.0 26.8 15.7 2.36 5.21 3.47 50.0 26.8 15.7 2.36 5.21 1.62 52.4 23.5 11.7 2.28 10.1
Bath & Body Works US Stores (% of 26.4 total) Victoria's Secret Direct (% of total) Bath & Body Works Direct (% of
total)
16.1 1.25 15.8 6.86 39.7
International & Other (% of total) Direct Expenses (Bil $) Victoria's Secret US Stores (% of
total)
9.40 9.22 7.77 8.19 48.1 27.7 17.0 2.42 4.77 2.69 48.1 27.7 17.0 2.42 4.77 1.10 49.8 23.1 10.9 2.26 13.9 49.2 27.0 16.5 2.40 4.95 2.90 49.2 27.0 16.5 2.40 4.95 1.61 50.6 24.0 12.5 2.30 10.6
9.04 9.03 9.07 9.25 50.0 26.6 15.8 2.39 5.20 3.29 50.0 26.6 15.8 2.39 5.20 1.55 52.4 23.4 11.8 2.31 10.1 50.0 26.5 15.8 2.38 5.27 3.36 50.0 26.5 15.8 2.38 5.27 1.57 52.4 23.3 11.8 2.30 10.2
total)
17.8 1.92 10.5 1.77 39.7
International & Other (% of total) Adjusted EBITDA (Bil $) Victoria's Secret US Stores (% of
total)
total)
17.8 1.92 10.5 0.25 45.4
International & Other (% of total) Indirect Expenses (Bil $) Victoria's Secret US Stores (% of
total)
total)
7.73 1.34 31.0
(% of total)
CONTENT@TREFIS.COM
+ 1 617 394 8763
24
Summary P&L for Limited Brands continued CY09 CY10 CY11 Free Cash Flow (Bil $) n/a n/a n/a Victoria's Secret US Stores (% of n/a n/a n/a total) Bath & Body Works US Stores (% of n/a total) Victoria's Secret Direct (% of total) Bath & Body Works Direct (% of
total)
CY12 n/a n/a n/a n/a n/a n/a
CY13 1.29 47.4 30.8 21.5 2.51
CY14 CY15 1.57 1.71 48.2 29.7 47.8 29.4
CY16 CY17 1.74 1.79 47.9 29.4 19.4 2.46 0.87 47.9 29.3 19.4 2.46 0.92
CY18 CY19 1.82 1.85 48.0 29.4 19.2 2.44 47.9 29.6 19.2 2.43
n/a n/a n/a n/a
n/a n/a n/a n/a
n/a n/a n/a
20.0 19.5 2.47 2.45
(% of total)
-2.13 -0.24 0.89
0.90 0.91
Detailed P&L for the Victoria's Secret US Stores business

The most important drivers for the Victoria's Secret US Stores business are discussed above, here is the detailed P&L.
Victoria's Secret US Stores: Detailed P&L CY09 CY10 CY11 Revenues Victoria's Secret US Store Revenues 3.50 4.02 4.56 (Bil $) Victoria's Secret US Revenue per Square Foot (K $) Average Square Footage per Victoria's Secret US Store (K) Number of Victoria's Secret US Stores (K) Total Revenues (Bil $) Expenses Direct Expenses (Bil $) Victoria's Secret US Stores EBITDA Margin (%) Indirect Expenses (Mil $) Effective Tax Rate (%) Victoria's Secret US Stores CapEx % of EBITDA (%) Victoria's Secret Direct CapEx % of EBITDA (%) Bath & Body Works US Stores CapEx % of EBITDA (%) 0.58 5.78 1.04 3.50 0.66 0.75 5.86 1.03 4.02 5.92 1.02 4.56
CY12 4.98 0.82 5.99 1.02 4.98
CY13 5.38 0.87
CY14 CY15 5.74 0.91 5.95 0.95
CY16 CY17 6.13 0.97 6.01 1.05 6.13 6.26
CY18 CY19 6.39 6.46 1.02 6.03 1.05 6.46
0.99 1.01 6.02 1.05 6.26 6.03 1.05 6.39
6.00 6.00 6.01 1.06 5.38 1.05 5.74 1.05 5.95
2.79 20.1 114 31.1 13.4 3.33 4.05
3.06 23.8 227 35.7 7.71 2.04 5.62
3.43 24.9 370 30.7 12.7 3.68 8.18
3.69 25.9 546 41.2 23.3 7.33 15.1
3.96 26.4 814 39.2 23.4 8.33 15.6
4.21 26.7 778 37.2 23.5 9.33 15.6
4.35 26.8 782 35.2 23.5 9.33 15.6
4.48 26.8 811 33.2 23.5 9.33 15.6
4.58 26.8 821 33.2 23.5 9.33 15.6
4.67 26.8 841 33.2 23.5 9.33 15.6
4.72 26.8 848 33.2 23.5 9.33 15.6
CONTENT@TREFIS.COM
+ 1 617 394 8763
25
Victoria's Secret US Stores: Detailed P&L continued CY09 CY10 CY11 Bath & Body Works Direct 7.06 8.35 10.2 CapEx % of EBITDA (%) International & Other CapEx % 39.2 78.2 100 of EBITDA (%) Increase in NWC % of Revenues -2.65 -1.81 -0.14
(%) (%)
CY12 19.2 100
CY13 19.7 85.3
CY14 CY15 19.7 75.3 19.7 65.3
CY16 CY17 19.7 65.3 19.7 65.3
CY18 CY19 19.7 65.3 19.7 65.3
-0.70 0.56 -0.52 0.65 4.24 1.29 n/a 4.77 1.42 609
-0.23 -0.19 0.08 -0.09 -0.06 -0.07 -0.06 -0.25 -0.07 -0.07 -0.10 -0.12 4.99 1.54 757 5.14 1.60 815 5.29 1.64 833 5.40 1.68 858 5.51 1.71 873 5.57 1.73 885
Increase in NOA % of Revenue Total Expenses (Bil $) Adjusted EBITDA (Bil $) Free Cash Flow (Mil $)
-0.06 0.12 2.91 0.70 n/a 3.29
0.44 3.80
0.96 1.14 n/a n/a
Detailed P&L for the Bath & Body Works US Stores business
The most important drivers for the Bath & Body Works US Stores business are discussed above, here is the detailed P&L.
Bath & Body Works US Stores: Detailed P&L CY09 CY10 Revenues Bath & Body Works US Store 2.28 2.37 Revenues (Bil $) Bath & Body Works US Revenue 587 619 per Square Foot ($) Average Square Footage per Bath 2.37 2.37 & Body Works US Store (K) Number of Bath & Body Works 1.63 1.61 US Stores (K) Total Revenues (Bil $) 2.28 2.37 Expenses Direct Expenses (Bil $) Bath & Body Works US Stores EBITDA Margin (%) Indirect Expenses (Mil $) Effective Tax Rate (%) Victoria's Secret US Stores CapEx % of EBITDA (%)
CY11 2.49 658 2.37 1.59 2.49
CY12 2.71 723 2.37 1.57 2.71
CY13 2.81 759 2.37 1.55 2.81
CY14 CY15 2.90 790 2.37 1.54 2.90 3.01 821 2.38 1.54 3.01
CY16 CY17 3.09 846 2.38 1.53 3.09 3.15 863 2.38 1.53 3.15
CY18 CY19 3.21 880 2.38 1.53 3.21 3.28 898 2.39 1.53 3.28
1.74 23.4 36.9 31.1 13.4
1.75 26.3 135 35.7 7.71
1.83 26.5 184 30.7 12.7
1.96 27.5 253 41.2 23.3
2.03 27.8 386 39.2 23.4
2.09 28.1 348 37.2 23.5
2.16 28.3 348 35.2 23.5
2.22 28.3 361 33.2 23.5
2.26 28.3 364 33.2 23.5
2.30 28.3 373 33.2 23.5
2.35 28.3 380 33.2 23.5
CONTENT@TREFIS.COM
+ 1 617 394 8763
26
Bath & Body Works US Stores: Detailed P&L continued CY09 CY10 CY11 Victoria's Secret Direct CapEx % 3.33 2.04 3.68 of EBITDA (%) Bath & Body Works US Stores 4.05 5.62 8.18 CapEx % of EBITDA (%) Bath & Body Works Direct 7.06 8.35 10.2 CapEx % of EBITDA (%) International & Other CapEx % 39.2 78.2 100 of EBITDA (%) Increase in NWC % of Revenues -2.65 -1.81 -0.14
(%) (%)
CY12 7.33 15.1 19.2 100
CY13 8.33 15.6 19.7 85.3
CY14 CY15 9.33 15.6 19.7 75.3 9.33 15.6 19.7 65.3
CY16 CY17 9.33 15.6 19.7 65.3 9.33 15.6 19.7 65.3
CY18 CY19 9.33 15.6 19.7 65.3 9.33 15.6 19.7 65.3
-0.70 0.56 -0.52 0.65 2.22 744 n/a 2.42 781 395
-0.23 -0.19 0.08 -0.09 -0.06 -0.07 -0.06 -0.25 -0.07 -0.07 -0.10 -0.12 2.44 815 466 2.50 850 501 2.58 873 511 2.62 890 525 2.68 908 534 2.73 927 547
Increase in NOA % of Revenue Total Expenses (Bil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
-0.06 0.12 1.78 532 n/a 1.88 624 n/a
0.44 2.02 659 n/a
Detailed P&L for the Victoria's Secret Direct business

The most important drivers for the Victoria's Secret Direct business are discussed above, here is the detailed P&L.
Victoria's Secret Direct: Detailed P&L CY09 CY10 CY11 Revenues Victoria's Secret Direct Revenues
(Bil $)
CY12 1.59 1.59 1.59
CY13 1.66 1.66 1.66
CY14 CY15 1.71 1.71 1.71 1.76 1.76 1.76
CY16 CY17 1.79 1.79 1.79 1.83 1.83 1.83
CY18 CY19 1.85 1.85 1.85 1.87 1.87 1.87
1.39
1.50 1.50 1.50
1.56 1.56 1.56
Victoria's Secret Direct Revenues 1.39 ($ Bil) Total Revenues (Bil $) Expenses Direct Expenses (Bil $) Victoria's Secret Direct EBITDA Margin (%) Indirect Expenses (Mil $) Effective Tax Rate (%) Victoria's Secret US Stores CapEx % of EBITDA (%) Victoria's Secret Direct CapEx % of EBITDA (%) 1.39
1.07 22.7 19.6 31.1 13.4 3.33
1.10 26.7 72.5 35.7 7.71 2.04
1.12 28.1 102 30.7 12.7 3.68
1.14 28.7 120 41.2 23.3 7.33
1.18 28.9 201 39.2 23.4 8.33
1.21 29.0 180 37.2 23.5 9.33
1.25 29.1 177 35.2 23.5 9.33
1.27 29.1 183 33.2 23.5 9.33
1.30 29.1 184 33.2 23.5 9.33
1.31 29.1 187 33.2 23.5 9.33
1.32 29.1 188 33.2 23.5 9.33
CONTENT@TREFIS.COM
+ 1 617 394 8763
27
Victoria's Secret Direct: Detailed P&L continued CY09 CY10 Bath & Body Works US Stores 4.05 5.62 CapEx % of EBITDA (%) Bath & Body Works Direct 7.06 8.35 CapEx % of EBITDA (%) International & Other CapEx % 39.2 78.2 of EBITDA (%) Increase in NWC % of Revenues -2.65 -1.81
(%) (%)
CY11 8.18 10.2 100
CY12 15.1 19.2 100
CY13 15.6 19.7 85.3
CY14 CY15 15.6 19.7 75.3 15.6 19.7 65.3
CY16 CY17 15.6 19.7 65.3 15.6 19.7 65.3
CY18 CY19 15.6 19.7 65.3 15.6 19.7 65.3
-0.14 -0.70 0.56 0.44 1.22 436 n/a -0.52 0.65 1.26 456 n/a 1.38 478 276
-0.23 -0.19 0.08 -0.09 -0.06 -0.07 -0.06 -0.25 -0.07 -0.07 -0.10 -0.12 1.39 494 313 1.42 510 333 1.45 521 338 1.48 531 347 1.50 537 349 1.51 542 353
Increase in NOA % of Revenue Total Expenses (Bil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
-0.06 0.12 1.09 315 n/a 1.17 400 n/a
Detailed P&L for the Bath & Body Works Direct business
The most important drivers for the Bath & Body Works Direct business are discussed above, here is the detailed P&L.
Bath & Body Works Direct: Detailed P&L CY09 Revenues Bath & Body Works Direct 108 Revenues (Mil $) Bath & Body Works Direct 108 Revenues ($ Mil) Total Revenues (Mil $) 108 Expenses Direct Expenses (Mil $) Bath & Body Works Direct EBITDA Margin (%) Indirect Expenses (Mil $) Effective Tax Rate (%) Victoria's Secret US Stores CapEx % of EBITDA (%) Victoria's Secret Direct CapEx % of EBITDA (%) Bath & Body Works US Stores CapEx % of EBITDA (%)
CY10 CY11 141 141 141 182 182 182
CY12 194 194 194
CY13 206 206 206
CY14 CY15 216 216 216 225 225 225
CY16 CY17 231 231 231 236 236 236
CY18 CY19 238 238 238 241 241 241
74.0 31.5 3.38 31.1 13.4 3.33 4.05
94.3 33.1 11.4 35.7 7.71 2.04 5.62
122 32.5 17.7 30.7 12.7 3.68 8.18
129 33.5 24.8 41.2 23.3 7.33 15.1
136 33.7 37.1 39.2 23.4 8.33 15.6
143 33.8 34.2 37.2 23.5 9.33 15.6
148 33.9 34.4 35.2 23.5 9.33 15.6
153 33.9 35.7 33.2 23.5 9.33 15.6
156 33.9 36.1 33.2 23.5 9.33 15.6
157 33.9 36.6 33.2 23.5 9.33 15.6
159 33.9 36.8 33.2 23.5 9.33 15.6
CONTENT@TREFIS.COM
+ 1 617 394 8763
28
Bath & Body Works Direct: Detailed P&L continued CY09 CY10 CY11 Bath & Body Works Direct 7.06 8.35 10.2 CapEx % of EBITDA (%) International & Other CapEx % 39.2 78.2 100 of EBITDA (%) Increase in NWC % of Revenues -2.65 -1.81 -0.14
(%) (%)
CY12 19.2 100
CY13 19.7 85.3
CY14 CY15 19.7 75.3 19.7 65.3
CY16 CY17 19.7 65.3 19.7 65.3
CY18 CY19 19.7 65.3 19.7 65.3
-0.70 0.56 -0.52 0.65 154 65.1 n/a 173 69.4 32.3
-0.23 -0.19 0.08 -0.09 -0.06 -0.07 -0.06 -0.25 -0.07 -0.07 -0.10 -0.12 177 73.1 38.8 183 76.2 41.8 189 78.5 42.8 192 80.1 44.0 194 80.9 44.3 196 81.7 44.9
Increase in NOA % of Revenue Total Expenses (Mil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
-0.06 0.12 77.4 34.0 n/a 105 46.7 n/a
0.44 140 59.1 n/a
Detailed P&L for the International & Other business

The most important drivers for the International & Other business are discussed above, here is the detailed P&L.
International & Other : Detailed P&L CY09 CY10 CY11 Revenues International & Other Revenues (Bil 1.36 $) International & Other Revenues
($ Bil)
CY12 0.98 0.98 0.98
CY13 1.02 1.02 1.02
CY14 CY15 1.06 1.06 1.06 1.09 1.09 1.09
CY16 CY17 1.12 1.12 1.12 1.14 1.14 1.14
CY18 CY19 1.15 1.15 1.15 1.16 1.16 1.16
1.58 1.58 1.58
1.57 1.57 1.57
1.36 1.36
Total Revenues (Bil $) Expenses Direct Expenses (Bil $) International & Other EBITDA Margin (%) Indirect Expenses (Mil $) Effective Tax Rate (%) Victoria's Secret US Stores CapEx % of EBITDA (%) Victoria's Secret Direct CapEx % of EBITDA (%) Bath & Body Works US Stores CapEx % of EBITDA (%) Bath & Body Works Direct CapEx % of EBITDA (%)
1.18 13.7 78.4 31.1 13.4 3.33 4.05 7.06
1.38 12.4 184 35.7 7.71 2.04 5.62 8.35
1.36 13.0 245 30.7 12.7 3.68 8.18 10.2
0.85 13.0 152 41.2 23.3 7.33 15.1 19.2
0.88 14.0 170 39.2 23.4 8.33 15.6 19.7
0.91 14.5 158 37.2 23.5 9.33 15.6 19.7
0.93 15.0 149 35.2 23.5 9.33 15.6 19.7
0.95 15.3 155 33.2 23.5 9.33 15.6 19.7
0.96 0.97 15.5 160 33.2 23.5 9.33 15.6 19.7 15.5 162 33.2 23.5 9.33 15.6 19.7
0.98 15.5 163 33.2 23.5 9.33 15.6 19.7
CONTENT@TREFIS.COM
+ 1 617 394 8763
29
International & Other : Detailed P&L continued CY09 CY10 CY11 CY12 CY13 International & Other CapEx % 39.2 78.2 100 100 85.3 of EBITDA (%) Increase in NWC % of Revenues -2.65 -1.81 -0.14 -0.70 0.56 (%) Increase in NOA % of Revenue
(%)
CY14 CY15 75.3 65.3
CY16 CY17 65.3 65.3
CY18 CY19 65.3 65.3
-0.23 -0.19 0.08 -0.09 -0.06 -0.07 -0.06 -0.25 -0.07 -0.07 -0.10 -0.12 1.07 1.08 1.10 171 15.2 1.12 176 16.5 1.13 178 16.3 1.15 180 16.7
-0.06 0.12 1.26 186 n/a 1.57 195 n/a
0.44 1.61 204 n/a
-0.52 0.65 1.01 128 n/a 1.05
Total Expenses (Bil $) Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)
143 154 164 -27.4 -3.83 15.2
CONTENT@TREFIS.COM
+ 1 617 394 8763
30

Limited Brands 2013-03-11

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Limited Brands 2013-03-11

Uploaded by

Copyright:

Available Formats

Limited Brands

ANALYSIS for NYSE : LTD MARCH 11, 2013

VICTORIA'S SECRET US STORES

See the Full Analysis for Limited Brands on Trefis

Victoria's Secret Direct EBITDA Margin 15

International & Other EBITDA Margin 20

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Victoria's Secret US Stores

Victoria's Secret US Revenue per Square Foot (K $)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Average Square Footage per Victoria's Secret US Store (K)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Number of Victoria's Secret US Stores (K)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Victoria's Secret US Stores EBITDA Margin (%)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

CY09 3.50 2.79 114 0.70 n/a

CY10 4.02 3.06 227 0.96 n/a

CY11 4.56 3.43 370 1.14 n/a

CY12 4.98 3.69 546 1.29 n/a

CY13 5.38 3.96 814 1.42 609

CY14 5.74 4.21 778 1.54 757

CY15 5.95 4.35 782 1.60 815

CY16 6.13 4.48 811 1.64 833

CY17 6.26 4.58 821 1.68 858

CY18 6.39 4.67 841 1.71 873

CY19 6.46 4.72 848 1.73 885

Bath & Body Works US Stores

Bath & Body Works US Revenue per Square Foot ($)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Number of Bath & Body Works US Stores (K)

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Bath & Body Works US Stores EBITDA Margin (%)

Total Revenue (Bil $) Direct Expense (Bil $) Indirect Expense (Mil $)

CY09 2.28 1.74 36.9

CY10 2.37 1.75 135

CY11 2.49 1.83 184

CY12 2.71 1.96 253

CY13 2.81 2.03 386

CY14 2.90 2.09 348

CY15 3.01 2.16 348

CY16 3.09 2.22 361

CY17 3.15 2.26 364

CY18 3.21 2.30 373

CY19 3.28 2.35 380

TREFIS ANALYSIS for LIMITED BRANDS

+ 1 617 394 8763

Adjusted EBITDA (Mil $) Free Cash Flow (Mil $)

CY09 CY10 CY11 532 624 659 n/a n/a n/a