SEC Filing Summary: The Limited, Inc. (10-K)
Business Context and Reporting Period
This Form 10-K covers the fiscal year ended February 1, 1997, for The Limited, Inc. (Note: The input metadata referenced "Bath & Body Works," but the filing text identifies the registrant as The Limited, Inc., the parent company of Bath & Body Works). The Company is a Delaware corporation engaged in the purchase, distribution, and sale of women's apparel, lingerie, men's apparel, personal care products, children's apparel, and sporting goods. Operations are conducted through retail stores and catalogues under various trade names.
Key Financial Metrics and Operations
The filing incorporates detailed financial statements by reference to the 1996 Annual Report; specific revenue, profit, and cash flow figures are not explicitly listed in the provided text. However, the following operational and balance sheet metrics are disclosed:
- Store Count: Total retail stores increased from 5,298 (Feb 3, 1996) to 5,633 (Feb 1, 1997).
- Inventory Levels: Peak inventory approximated $1.5 billion (November 1996); lowest level approximated $980 million (March 1996).
- Market Capitalization: Aggregate market value of common stock held by non-affiliates was $5,086,697,081 as of March 28, 1997.
- Shares Outstanding: 271,290,511 shares as of March 28, 1997.
- Employees: Approximately 123,100 associates as of February 1, 1997 (90,300 part-time).
- Debt Instruments: The Company has outstanding debentures and notes due between 1999 and 2023, including 7 1/2% Debentures due 2023 and 9 1/8% Notes due 2001.
Material Changes vs. Prior Period
- Store Expansion: The Company opened 470 new stores and closed 135 stores during fiscal 1996, resulting in a net increase of 335 locations.
- Segment Growth:
- Bath & Body Works: Expanded significantly from 498 to 750 stores.
- Victoria's Secret Stores: Grew from 671 to 736 stores.
- Abercrombie & Fitch Co.: Increased from 100 to 127 stores.
- Lerner New York: Declined from 835 to 784 stores.
- Divestiture: The Company sold a 60% interest in World Financial Network National Bank (WFNNB) in 1995, forming Alliance Data Services (ADS). Consequently, the allowance for uncollectible accounts related to WFNNB was eliminated in the 1996 fiscal year.
- Asset Sale: Penhaligon's (4 stores) was sold in March 1997, shortly after the fiscal year-end.
Guidance, Outlook, and Risks
Management Commentary and Outlook:
- The Company emphasizes rapid inventory turnover and markdowns to maintain fresh merchandise.
- Sales are seasonal, with peak activity occurring during the Fall season and Christmas holiday periods.
- The Company is evaluating the impact of SFAS No. 128 ("Earnings Per Share"), effective for the 1997 annual financial statements.
- Competition: The retail apparel market is highly competitive with numerous chain and individual stores; the Company cannot estimate its relative competitive position.
- Legal Proceedings: The Company is a defendant in ordinary course lawsuits. Management believes the resolution of these matters will not have a material adverse effect.
- Supplier Concentration: No more than 5% of goods purchased originated from any single manufacturer, mitigating supply chain concentration risk.
Investor Verification Checklist
- Verify the specific revenue, net income, and operating margin figures in the 1996 Annual Report to Shareholders (incorporated by reference), as these are not explicitly stated in the 10-K text provided.
- Review the Consolidated Statements of Cash Flows in the Annual Report to assess liquidity and capital expenditure trends.
- Confirm the details of the Penhaligon's sale (March 1997) and any proceeds or impacts on the 1997 fiscal year.
- Examine the Management's Discussion and Analysis (MD&A) in the Annual Report for specific commentary on the decline in Lerner New York store counts and the strategy for the "Emerging" businesses.
- Check the Proxy Statement for details on executive compensation and director security ownership.