Bath & Body Works Inc NYSE:BBWI Price, Chart, News & Insight

NYSE:BBWI

Bath & Body Works Rises 3.6% as Q2 Beats Guidance and Turnaround Shows Early Progress

Bath & Body Works (NYSE: BBWI) shares rose about 3.6% after the retailer reported fiscal second-quarter 2026 sales and earnings above its guidance and raised its full-year earnings outlook. The positive reaction comes despite continued sales pressure, suggesting investors are focusing on early signs that the company's turnaround strategy is beginning to gain traction.

Q2 Results Beat Expectations

Second-quarter net sales were $1.51 billion, down 2.3% year over year. While revenue remained under pressure, management said the result exceeded its guidance.

Adjusted EPS reached $0.62, compared with $0.37 a year earlier, while adjusted operating income increased to $225 million from $172 million.

However, the headline earnings improvement was heavily influenced by approximately $80 million of tariff refunds. Excluding that benefit, adjusted EPS would have been $0.31.

That distinction is important: the quarter was better than management expected, but the reported year-over-year earnings growth substantially overstates the improvement in the underlying business.

Turnaround Signals Support the Stock

The more encouraging development may be operational rather than purely financial.

Bath & Body Works reported its first quarter of direct net sales growth since 2021, which management attributed partly to improvements in its digital shopping experience. The company also cited sequential improvement in Body Care, stronger average unit retail on new product innovation and continued momentum through marketplace partnerships.

CEO Daniel Heaf said these developments provide early evidence that the company's "Consumer First Formula" strategy is working, although he acknowledged that underlying business trends remain pressured.

For investors, evidence that digital sales and key product categories are stabilizing could be particularly important after an extended period of weak growth.

Full-Year EPS Guidance Raised, But Sales Still Expected to Fall

Bath & Body Works raised fiscal 2026 GAAP EPS guidance to $3.13-$3.33 and adjusted EPS guidance to $2.60-$2.80. The company also expects approximately $650 million of free cash flow.

Sales guidance was narrowed to a decline of 2.5%-4%, indicating that management still expects revenue contraction for the year.

The near-term outlook also remains challenging. For Q3, sales are expected to decline 2.5%-5%, while adjusted EPS of $0.07-$0.12 would be substantially below $0.35 in the year-ago quarter.

The 3.6% rise in BBWI therefore appears to reflect a cautiously positive reaction rather than a clear return to growth. Q2 exceeded guidance, digital sales improved and management raised its earnings outlook, providing evidence that the transformation is making progress. Still, declining sales, weak Q3 earnings guidance and the large contribution from tariff refunds show that the underlying recovery remains at an early stage.

💬

The Investor 08-26-26

BBWI fell 12% today after Bath & Body Works reported first-quarter 2026 earnings that exceeded guidance but reinforced investor concerns about slowing sales growth, weak forward outlooks and ongoing uncertainty surrounding the retailer’s turnaround strategy.

The company posted first-quarter net sales of $1.38 billion, down 3% year over year, while reaffirming its full-year forecast for revenue to decline between 4.5% and 2.5%. Management also projected second-quarter sales to fall another 3% to 5%, signaling that demand pressures are expected to persist through much of 2026.

Although reported earnings per diluted share rose to $0.90 from $0.49 a year earlier, much of the improvement came from one-time items, including an $88 million pre-tax litigation settlement gain and a $62 million tax benefit. Excluding special items, adjusted EPS came in at just $0.32, reflecting ongoing pressure on the core business.

CEO Daniel Heaf acknowledged that while results exceeded guidance, performance still remains “below the standard our brand is capable of delivering.” The company said its “Consumer First Formula” turnaround plan is beginning to generate early positive signs through investments in hero product categories, brand modernization and customer engagement initiatives, but management made clear that meaningful improvement is expected to build gradually into 2027 rather than immediately.

Investors also appeared unsettled by the sudden departure of Chief Financial Officer Eva Boratto, who will step down in June. The company announced an interim CFO appointment while conducting a broader executive search, creating additional uncertainty at a time when Bath & Body Works is already navigating slowing sales and shifting consumer demand trends.

The market reaction suggests investors were hoping for stronger evidence of stabilization and a more optimistic near-term outlook. While Bath & Body Works maintained full-year earnings guidance and continues to generate solid cash flow, the retailer still faces a difficult environment marked by cautious consumer spending, promotional competition and pressure on discretionary retail categories.

The sharp selloff indicates investors remain skeptical that the company’s turnaround efforts will produce a meaningful acceleration in growth anytime soon, despite management’s confidence in the longer-term recovery strategy.

💬

Global Finance News 05-27-26

Bath & Body Works Appoints Daniel Heaf as CEO; Reports Strong Q1 2025 Results

Bath & Body Works, Inc. (NYSE: BBWI) announced the appointment of Daniel Heaf as Chief Executive Officer, effective immediately. Heaf, a seasoned leader with prior senior roles at Nike and Burberry, will also join the Board of Directors following the 2025 Annual Meeting. He replaces Gina Boswell, who has stepped down.

Heaf brings extensive experience in consumer and retail transformation. At Nike, he previously led the direct-to-consumer business to more than double in size and most recently served as Chief Strategy and Transformation Officer.

First Quarter 2025 Preliminary Results:
• Net Sales: $1.424 billion (up 3% year-over-year), meeting the high end of guidance.
• Earnings Per Share: $0.49, exceeding the high end of guidance.
• Full-Year Outlook Maintained: Sales growth of 1% to 3% and EPS of $3.25 to $3.60.
The company will hold its earnings call on May 29, 2025, at 8:30 a.m. ET.

Chair Sarah Nash praised Heaf as a bold, consumer-first leader with a clear vision to evolve the brand. Heaf emphasized Bath & Body Works’ potential to grow into a global home fragrance and beauty leader, citing the company’s strong foundation of brand loyalty and retail footprint.

💬

European Investor 05-20-25

Bath & Body Works, Inc. has announced that its Chief Executive Officer, Gina Boswell, will take a temporary leave of absence to undergo scheduled surgery. The absence is expected to last several weeks.

💬

WS Investor 03-19-25

Bath & Body Works, Inc. has filed a Form 8-K with the SEC, reaffirming its financial guidance for the first quarter and full year of fiscal 2025. During its participation in the Bank of America Consumer & Retail Conference – Fireside Chat on March 11, 2025, the company reiterated its previously announced projections.

For the first quarter of 2025, the company expects net sales growth between 1% and 3% and earnings per diluted share in the range of $0.36 to $0.43. For the full fiscal year 2025, net sales growth is projected to be between 1% and 3%, with earnings per diluted share estimated between $3.25 and $3.60.

The company made this announcement in connection with its investor presentation, and the audio webcast of the event is available on the company's Investor Relations website. The information was furnished under Regulation FD and is not considered filed under the Exchange Act.

💬

WS News 03-11-25

Bath & Body Works reported its fourth-quarter and full-year 2024 results, exceeding earnings expectations and providing 2025 guidance.

The company recorded fourth-quarter net sales of $2.8 billion and earnings per diluted share of $2.09, surpassing projections. Strong traffic and conversion rates contributed to performance, despite a 4.3% decline in sales due to a shifted fiscal calendar that included an extra week in 2023. Net income for the quarter was $453 million, down from $579 million in the prior year.

For the full year, net sales declined 1.6% to $7.3 billion, reflecting the impact of the 53rd week in fiscal 2023. Earnings per diluted share were $3.61, compared to $3.84 in 2023. The company repurchased 10.4 million shares for $400 million and exited the year with a debt leverage ratio of 2.5x.

Looking ahead to 2025, Bath & Body Works expects net sales growth of 1% to 3% and earnings per diluted share between $3.25 and $3.60. The first quarter is projected to see similar sales growth, with earnings per diluted share between $0.36 and $0.43. The company also authorized a new $500 million share repurchase program.

CEO Gina Boswell highlighted the company’s success in product innovation, marketing, and international expansion, positioning it for continued growth despite broader retail sector challenges.

💬

Global Finance News 02-27-25

NYSE:BBWIFollow

NYSE:BBWI