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Limited Brands Reports First Quarter 2012 Earnings

COLUMBUS, Ohio, May 16, 2012 /PRNewswire/ -- Limited Brands, Inc. (NYSE: LTD) today reported 2012 first quarter results.

(Logo: http://photos.prnewswire.com/prnh/20020520/CLM001LOGO )

First Quarter Results

Earnings per share for the first quarter ended April 28, 2012, were $0.41 compared to adjusted earnings per share of $0.40 for the quarter ended April 30, 2011. First quarter operating income was $293.2 million compared to adjusted operating income of $266.8 million last year, and net income was $124.6 million compared to adjusted net income of $129.8 million last year. Adjusted results exclude certain significant items as detailed below:

In 2011 (totaling to a benefit $0.10 per share):

    --  A pre-tax gain of $86.4 million, or $0.17 per share, related to the sale
        of Express stock;
    --  A pre-tax non-cash expense of $50 million, or $0.10 per share, related
        to the multi-year funding of the company's charitable foundation; and
    --  An income tax benefit of $11 million, or $0.03 per share, related to the
        favorable resolution of certain income tax matters.

Including the significant items above, reported first quarter earnings per share were $0.41 compared to $0.50 last year; operating income was $293.2 million compared to $216.8 million last year; and net income was $124.6 million compared to $165.2 million last year.

Comparable store sales for the first quarter increased 7 percent, and net sales were $2.154 billion compared to $2.217 billion last year. First quarter 2011 sales included $214.0 million attributable to the third party apparel sourcing business, which was sold in November 2011.

At the conclusion of this press release is a reconciliation of reported to adjusted results.

2012 Outlook

The company stated that it expects 2012 second quarter earnings per share to be $0.40 to $0.45 compared to adjusted earnings per share of $0.48 per share last year.

For 2012, the company expects earnings per share of $2.63 to $2.83.

Earnings Call Information

Limited Brands will conduct its first quarter earnings call at 9 a.m. Eastern on Thursday, May 17. To listen, call 1-866-583-6618 (international dial-in number: 1-937-200-3978). For an audio replay, call 1-866-NEWS-LTD (international replay number: 1-706-902-3452) or log onto www.Limitedbrands.com. Additional first quarter financial information is also available at www.Limitedbrands.com.

ABOUT LIMITED BRANDS:

Limited Brands, through Victoria's Secret, Pink, Bath & Body Works, La Senza and Henri Bendel, is an international company. The company operates 2,612 specialty stores in the United States and its brands are sold in more than 700 company-operated and franchised additional locations world-wide. The company's products are also available online at www.VictoriasSecret.com, www.BathandBodyWorks.com, www.HenriBendel.com and www.LaSenza.com.

Limited Brands b-roll footage of stores is available through our online newsroom.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Limited Brands, Inc. cautions that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or the first quarter earnings call involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," "planned," "potential" and any similar expressions may identify forward-looking statements. Risks associated with the following factors, among others, in some cases have affected and in the future could affect our financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this press release or the first quarter earnings call:

    --  general economic conditions, consumer confidence, consumer spending
        patterns and market disruptions including severe weather conditions,
        natural disasters, health hazards, terrorist activities, financial
        crises, political crises or other major events, or the prospect of these
        events;
    --  the seasonality of our business;
    --  the dependence on a high volume of mall traffic and the possible lack of
        availability of suitable store locations on appropriate terms;
    --  our ability to grow through new store openings and existing store
        remodels and expansions;
    --  our ability to successfully expand into international markets and
        related risks;
    --  our independent licensees and franchisees;
    --  our direct channel business;
    --  our failure to protect our reputation and our brand images;
    --  our failure to protect our trade names, trademarks and patents;
    --  the highly competitive nature of the retail industry generally and the
        segments in which we operate particularly;
    --  consumer acceptance of our products and our ability to keep up with
        fashion trends, develop new merchandise and launch new product lines
        successfully;
    --  our reliance on foreign sources of production, including risks related
        to:
        --  political instability;
        --  duties, taxes and other charges on imports;
        --  legal and regulatory matters;
        --  volatility in currency exchange rates;
        --  local business practices and political issues;
        --  potential delays or disruptions in shipping and related pricing
            impacts;
        --  the disruption of imports by labor disputes; and
        --  changing expectations regarding product safety due to new
            legislation;
    --  stock price volatility;
    --  our failure to maintain our credit rating;
    --  our ability to service our debt;
    --  our ability to retain key personnel;
    --  our ability to attract, develop and retain qualified employees and
        manage labor costs;
    --  the inability of our manufacturers to deliver products in a timely
        manner and meet quality standards;
    --  fluctuations in product input costs;
    --  fluctuations in energy costs;
    --  increases in the costs of mailing, paper and printing;
    --  claims arising from our self-insurance;
    --  our ability to implement and maintain information technology systems;
    --  our failure to comply with regulatory requirements;
    --  tax matters; and
    --  legal and compliance matters.

We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release or the first quarter earnings call to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized. Additional information regarding these and other factors can be found in "Item 1A. Risk Factors" in our 2011 Annual Report on Form 10-K.


                             LIMITED BRANDS, INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF INCOME
                    THIRTEEN WEEKS ENDED APRIL 28, 2012 AND APRIL 30, 2011
                                          (Unaudited)
                            (In thousands except per share amounts)





                                                      2012                       2011
                                                      ----                       ----
    Net Sales                                   $2,153,784                 $2,217,017
    Cost of
     Goods
     Sold,
     Buying
     and
     Occupancy                                  (1,251,821)                (1,375,289)
                                                ----------                 ----------
    Gross
     Profit                                        901,963                    841,728
    General,
     Administrative
     and
     Store
     Operating
     Expenses                                     (608,736)                  (624,905)
    Operating
     Income                                        293,227                    216,823
    Interest
     Expense                                       (77,792)                   (54,668)
    Other
     (Expense)
     Income                                         (2,309)                    86,487

    Income
     Before
     Income
     Taxes                                         213,126                    248,642
    Provision
     for
     Income
     Taxes                                          88,568                     83,471
                                                    ------                     ------

    Net
     Income                                       $124,558                   $165,171
                                                  ========                   ========

    Net
     Income
     Per
     Diluted
     Share                                           $0.41                      $0.50
                                                     =====                      =====

    Weighted
     Average
     Shares
     Outstanding                                   301,238                    328,472
                                                   =======                    =======

                                                                         LIMITED BRANDS, INC. AND SUBSIDIARIES
                                                                           CONSOLIDATED STATEMENTS OF INCOME
                                                                 THIRTEEN WEEKS ENDED APRIL 28, 2012 AND APRIL 30, 2011
                                                                                      (Unaudited)
                                                                        (In thousands except per share amounts)





                                                                        2012                                                         2011
                                                                        ----                                                         ----

                                           Reported                                      Reported                        Adjustments                          Adjusted
                                           --------                                      --------                        -----------                          --------
    Net Sales                                       $2,153,784                           $2,217,017                $                    -                     $2,217,017
    Cost of Goods Sold,
                                Buying & Occupancy                (1,251,821)                          (1,375,289)                                         -             (1,375,289)
                                                                 -----------
    Gross Profit                                                     901,963                              841,728                                          -                841,728
    General, Administrative and
                                Store Operating Expenses            (608,736)                            (624,905)                                    50,000               (574,905)
    Operating Income                                                 293,227                              216,823                                     50,000                266,823
    Interest Expense                                                 (77,792)                             (54,668)                                         -                (54,668)
    Other (Expense) Income                                            (2,309)                              86,487                                    (86,425)                    62

    Income Before Income
     Taxes                                                           213,126                              248,642                                    (36,425)               212,217
    Provision for Income
     Taxes                                                            88,568                               83,471                                     (1,085)                82,386
                                                                      ------                               ------                                     ------                 ------


    Net Income                                        $124,558                             $165,171                              $(35,340)                      $129,831
                                                      ========                             ========                              ========                       ========

    Net Income Per Diluted
     Share                                               $0.41                                $0.50                                                                $0.40
                                                         =====                                =====                                                                =====

    Weighted Average Shares
     Outstanding                                                     301,238                              328,472                                                           328,472
                                                                     =======                              =======                                                           =======


                                   See Notes to Consolidated Statements of Income and Reconciliation of Adjusted Results for additional information.

        LIMITED BRANDS, INC. AND SUBSIDIARIES
     NOTES TO CONSOLIDATED STATEMENTS OF INCOME
                         AND
         RECONCILIATION OF ADJUSTED RESULTS
                     (Unaudited)

The "Adjusted Results" provided in the attached unaudited Consolidated Statements of Income and Reconciliation of Adjusted Results are non-GAAP financial measures and reflect the following:

Fiscal 2012

In the first quarter of 2012, there were no adjustments to results.

Fiscal 2011

In the first quarter of 2011, adjusted results exclude the following:

    --  An $86.4 million pre-tax gain ($55.6 million net of tax), included in
        other income and expense, related to the sale of shares of Express, Inc.
        common stock.
    --  A $50.0 million pre-tax expense ($31.2 million net of tax), included in
        general, administrative and store operating expenses, related to a
        pledge to The Limited Brands Foundation.
    --  An $11.0 million tax benefit primarily related to the favorable
        resolution of certain discrete income tax matters.

The Unaudited Adjusted Consolidated Statements of Income should not be construed as an alternative to the reported results determined in accordance with generally accepted accounting principles. Further, the Company's definition of adjusted income information may differ from similarly titled measures used by other companies. While it is not possible to predict future results, management believes the adjusted information is useful for the assessment of the ongoing operations of the Company. The Unaudited Adjusted Consolidated Statements of Income should be read in conjunction with the Company's historical financial statements and notes thereto contained in the Company's quarterly reports on Form 10-Q and annual report on Form 10-K.

SOURCE Limited Brands, Inc.

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