L Brands (LB) to Repay $1.04B in Debt, Plans $500M Buyback, to Reinstate Dividend, Increases Q1 EPS Guidance

March 12, 2021 7:32 AM EST

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L Brands, Inc. (NYSE: LB) today announced actions it is taking to further enhance shareholder value. The company’s Board of Directors has authorized the following:

  • The repayment of $1.035 billion of debt through a call of all $285 million of the outstanding bonds due February 15, 2022 and all $750 million of the outstanding secured bonds due July 1, 2025. The company issued this call on March 12, 2021 and anticipates using $1.1 billion in cash to complete the debt repayment.
  • A new $500 million share repurchase plan (which includes the company’s entry into a Rule 10b5-1 repurchase plan to effectuate share repurchases up to $250 million). This plan replaces the remaining $79 million under the previously authorized program.
  • A reinstatement of the company’s annual dividend at $0.60 per share, beginning with the quarterly dividend to be paid in June 2021.

Sarah Nash, Board Chair, stated, “L Brands took a series of actions throughout 2020 to improve financial and operational performance, which led to record third and fourth quarter results, increased liquidity, and a year-end cash balance of $3.9 billion. The actions being announced today further support our effort to decrease leverage and enhance returns to shareholders, while better positioning the Bath & Body Works and Victoria’s Secret businesses for separation in August.”

The company is also increasing its first quarter earnings guidance from a range of $0.35 to $0.45 to a range of $0.55 to $0.65, excluding any charges related to the early extinguishment of debt.

Andrew Meslow, Chief Executive Officer of L Brands, commented “We are pleased with our quarter-to-date performance at both Bath & Body Works and Victoria’s Secret. While the current environment still presents uncertainty, we have raised our earnings guidance for the first quarter due to strong sales and margin results quarter-to-date, which also contributed to an improvement in our expectations for the remainder of the quarter.”

Implementing the Rule 10b5-1 trading plan allows the company to repurchase shares at times when the company might otherwise be prevented from doing so by securities laws or because of self-imposed trading blackout periods. Share repurchases under the Rule 10b5-1 repurchase plan will be administered through an independent broker and made in the open market and subject to the rules of NYSE and applicable securities laws and regulations.



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