Bath & Body Works, Inc.

You may begin. Thanks.

Good morning, everyone, and welcome to L Brand's fourth quarter earnings conference call for the period ending January 30th, 2021. As a matter of formality, I need to remind you that any forward-looking statements we may make on our call today are subject to our safe harbor statement found in our SEC filings and in our press releases. Joining me on the call today are Andrew Meslow, CEO of L Brands and Bath and Body Works, Martin Waters, CEO of Victoria's Secret, and Stuart Berger, CFO of L Brands. All results we discuss on the call today are adjusted results and exclude the special items described in our press release. Thanks, and now I'll turn the call over to Andrew.

Thank you, Amy, and good morning, everyone. As we reported last night, we delivered record results in the fourth quarter, and we could not have done so without the hard work and dedication of our whole team of associates and partners. We'd like to express our deep appreciation for their continued dedication and efforts. Before we take your questions this morning, I thought it would be appropriate to take a few minutes to reflect on the year we just completed. which presented many challenges, but at the same time yielded so many accomplishments in our business. To highlight just a few of these accomplishments for L Brands in total, we led with our values and an emphasis on safety, so we could be confident in our decisions and actions to support associates, customers, and our business. We shifted how we ran the business, and thanks to technology, didn't miss a beat in managing the calendar and processes that drive our businesses each day. We created ways to navigate the pandemic and support our associates and partners to ensure we could continue to deliver results. We took significant actions to increase liquidity and ended the year with $3.9 billion in cash and delivered $1.8 billion in free cash flow. We restructured the organization to prepare us to operate as two separate businesses go forward. We successfully spread business across the fall season with sales volume and margin rates that outpaced expectations. While the above comments reflect what we did tactically, it's also important to reflect on how we got there, particularly in a year where we saw substantial social unrest and political divisiveness. The leadership of the business focused on advancing a healthy, high-performance culture, including efforts around diversity, equity, and inclusion for ourselves, our business, and our communities. In addition to continuing to develop our internal leadership talent, we also recruited a number of new leaders in important roles that both deepen our capability and add to the diversity of our team. Shifting now to accomplishments that relate specifically to Bath & Body Works. For the year, we increased sales by 1.1 billion, or 20%, and operating income by over 600 million, or 50%, and delivered results we could not have predicted in the middle of a global pandemic and a year of significant change. We further enhanced our brand positioning with evolved designs, strong product acceptance, emotionally compelling on-trend, seasonally right merchandise, and marketing. We matched our customer's mindset about wellness, self-care, and nesting at home. And we established soaps and sanitizers as true traffic drivers and a solid third pillar of the business. We continued to leverage our speed and agility and made smart choices to plan and replan the business and manage inventory to commercialize, chase, and allocate product, and divert and move inventory where it was most needed while also building continuity and capacity into our supply chain and a larger network of fulfillment and distribution centers, all of which gave us the velocity of inventory flow to match increased demands for our products. We more than doubled our U.S. direct business to $2 billion, or 31% of the total business, inside of 12 months, breaking high watermarks multiple times during the year. And importantly, we were among the safest as well as most fun and festive place in the mall for Christmas. We expect that 2021 will not be easy as the world, the retail environment, and our enterprise and business continue to evolve. And as we lap these extraordinary 2020 results. But with continued smart management of the brand and business, I know we can become a fully separate standalone public corporation and proactively accelerate to our next phase of growth. Thank you, and with that, I'll turn it over to Martin Waters.