-0.50 | -0.96%
L BRANDS INC's gross profit margin for the first quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. L BRANDS INC has very weak liquidity. Currently, the Quick Ratio is 0.44 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.
At the same time, stockholders' equity ("net worth") has significantly decreased by 658.77% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.
| Income Statement | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Net Sales ($mil) | 2268.0 | 2153.78 |
| EBITDA ($mil) | 411.0 | 388.23 |
| EBIT ($mil) | 311.0 | 293.23 |
| Net Income ($mil) | 143.0 | 124.56 |
| Balance Sheet | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 382.0 | 1286.0 |
| Total Assets ($mil) | 5776.0 | 6616.0 |
| Total Debt ($mil) | 4475.0 | 4537.0 |
| Equity ($mil) | -994.0 | -131.0 |
| Profitability | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Gross Profit Margin | 45.9 | 46.29 |
| EBITDA Margin | 18.12 | 18.02 |
| Operating Margin | 13.71 | 13.61 |
| Sales Turnover | 1.83 | 1.56 |
| Return on Assets | 13.35 | 12.23 |
| Return on Equity | 0.0 | 0.0 |
| Debt | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Current Ratio | 1.5 | 2.18 |
| Debt/Capital | 1.29 | 1.03 |
| Interest Expense | 79.0 | 77.79 |
| Interest Coverage | 3.94 | 3.77 |
| Share Data | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Shares outstanding (mil) | 289.0 | 292.0 |
| Div / share | 0.3 | 0.25 |
| EPS | 0.48 | 0.41 |
| Book value / share | -3.44 | -0.45 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 2817269.0 | 3541066.0 |
BUY. L BRANDS INC's P/E ratio indicates a discount compared to an average of 21.85 for the Specialty Retail industry and a value on par with the S&P 500 average of 18.95. Normally, for additional comaprison, we would look at the price-to-book ratio; however, this company's price-to-book ratio is negative making the value useless for comparisons. The current price-to-sales ratio is below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, L BRANDS INC proves to trade at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| LTD 19.54 | Peers 21.85 | LTD 10.44 | Peers 14.52 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. LTD is trading at a discount to its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. LTD is trading at a significant discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| LTD 14.49 | Peers 19.60 | LTD 0.81 | Peers 1.41 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. LTD is trading at a discount to its peers. |
Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. LTD trades at a significant discount to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| LTD NM | Peers 5.42 | LTD -0.39 | Peers 23.16 | |||||||||||||||||||||
|
Neutral. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. LTD's P/B is negative making this valuation measure meaningless. |
Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. However, LTD is expected to significantly trail its peers on the basis of its earnings growth rate. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| LTD 1.39 | Peers 1.32 | LTD 2.64 | Peers 10.13 | |||||||||||||||||||||
|
Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. LTD is trading at a valuation on par with its industry on this measurement. |
Lower. A sales growth rate that trails the industry implies that a company is losing market share. LTD significantly trails its peers on the basis of sales growth |
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