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Bath & Body Works
(NYSE:BBWI)
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Rating:62Neutral
Price Target:
$22.00
▲(25.14% Upside)
Action:Reiterated
Date:10/06/26
BBWI scores as a mid-range opportunity primarily due to strong cash generation and very low valuation (low P/E and ~4.6% dividend yield). These positives are tempered by meaningful balance-sheet leverage with negative equity and a weak revenue trend, while technicals remain soft (below key moving averages and negative MACD). Earnings call updates were constructive on EPS/FCF guidance, but underlying demand remains pressured and recent outperformance was partly one-time in nature.
Positive Factors
Strong cash generation
BBWI is converting its profitable operations into substantial cash, providing resources for debt reduction, dividends, and business investment. The 13.4% free-cash-flow growth indicates that cash generation remains a meaningful operating strength despite the pressured sales environment.
Negative Factors
Highly leveraged balance sheet
High debt combined with negative equity leaves BBWI with limited financial flexibility and greater dependence on sustained cash generation. Leverage can constrain investment choices, increase sensitivity to operating setbacks, and make balance-sheet repair an ongoing strategic priority.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
BBWI is converting its profitable operations into substantial cash, providing resources for debt reduction, dividends, and business investment. The 13.4% free-cash-flow growth indicates that cash generation remains a meaningful operating strength despite the pressured sales environment.
Read all positive factors
Bath & Body Works Key Performance Indicators (KPIs)
Any
Revenue By Segment
Breaks down revenue by product lines or business units, revealing which segments are driving sales and where there might be opportunities or challenges.
Breaks down revenue by product lines or business units, revealing which segments are driving sales and where there might be opportunities or challenges.
Data provided by:
The Fly
The FlyBath & Body Works (BBWI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.22B
Dividend Yield3.82%
Average Volume (3M)7.12M
Price to Earnings (P/E)5.6
Beta (1Y)1.31
Revenue Growth-2.18%
EPS Growth14.77%
CountryUS
Employees60,735
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)3.75
Shares Outstanding201,645,310
10 Day Avg. Volume6,924,550
30 Day Avg. Volume7,115,261
Financial Highlights & Ratios
PEG Ratio-0.47
Price to Book (P/B)-3.61
Price to Sales (P/S)0.63
P/FCF Ratio5.33
Enterprise Value/Market Cap1.90
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit2.52
Enterprise Value/Ebitda5.44
Forecast
1Y Price Target
$22.36Price Target Upside27.17% Upside
Rating ConsensusHold
Number of Analyst Covering17
EPS Forecast (FY)2.71
Revenue Forecast (FY)$7.10B
Bath & Body Works Business Overview & Revenue Model
Company Description
Bath & Body Works, Inc. operates as a specialty retailer of personal care and home fragrance products. The company offers body and home fragrances, including 3-wick candles, home fragrance diffusers, fine fragrance mists, eau de parfum, body wash,...
How the Company Makes Money
BBWI generates revenue primarily by selling Bath & Body Works-branded merchandise directly to consumers (DTC) through two main channels: (1) physical retail stores, where it earns revenue from in-store transactions across core categories such as b...
Bath & Body Works Earnings Call Summary
Earnings Call Date:Aug 26, 2026
(Q2-2026)
| Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Neutral
The call showcased several meaningful tactical wins—Q2 results beat guidance, adjusted EPS outperformed and full-year EPS guidance was raised; digital returned to growth, Fruit Fusion demonstrated the new go-to-market playbook, and expanded distribution (Amazon, Ulta) scaled quickly. However, many of the upside results were aided by a one-time tariff refund and the underlying business remains pressured: store sales are down, body care is still underperforming, and full-year and Q3 revenue are still guided to declines. Management emphasized multiyear transformation and prudent investment, but near-term headwinds (tariffs, store traffic, margin deleverage) temper the optimism.Positive Updates
Q2 Net Sales Ahead of Guidance
Net sales of $1.5 billion in Q2 declined 2.3% year-over-year but beat guidance (previously down 5% to down 3%), providing evidence of sequential improvement versus Q1.
Negative Updates
Underlying Business Pressure and Store Declines
U.S. and Canadian store net sales were $1.1 billion, down 5.4% YoY; management cited pressured store traffic and channel shift to direct (free ship $50) as headwinds—store performance remains a key challenge to restoring broad growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Q2 Net Sales Ahead of Guidance
Net sales of $1.5 billion in Q2 declined 2.3% year-over-year but beat guidance (previously down 5% to down 3%), providing evidence of sequential improvement versus Q1.
Read all positive updates
Company Guidance
Management narrowed full‑year net sales guidance to down 4.0% to down 2.5% and raised full‑year adjusted EPS to $2.60–$2.80 after Q2 outperformance (Q2 net sales $1.5B, down 2.3%; Q2 adjusted EPS $0.62, which included ≈$80M of tariff refunds that contributed ~530 bps to merchandise margin and would leave EPS ≈$0.31 ex‑refund). They now expect full‑year adjusted gross profit of ~43.3% (including the refund), adjusted SG&A rate ~29.6%, adjusted net non‑operating expense ≈$217M, adjusted tax rate ~26.8% and ~203M weighted average diluted shares; Q3 guidance is net sales down 5% to down 2.5%, gross profit ≈40%, SG&A ≈34.8%, adjusted net non‑operating expense ≈$54M, adjusted tax rate ≈26% and Q3 adjusted EPS $0.07–$0.12. Other updated metrics: capex ~$240M (YTD $98M), free cash flow ~$650M (up from $600M), Fuel for Growth savings ~ $200M (vs. $175M goal), $250M of 2029 notes redeemed, and management is accounting for ~ $30M (≈40 bps) of forward tariff/input cost pressure and ~$35M of incremental Consumer First Formula investments (about 70% of which are weighted to Q3).Bath & Body Works Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
28
Negative
Cash Flow
74
Positive
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.21B | 7.29B | 7.31B | 7.43B | 7.56B | 7.88B |
| Gross Profit | 3.18B | 3.19B | 3.23B | 3.24B | 3.25B | 3.85B |
| EBITDA | 1.47B | 1.41B | 1.62B | 1.64B | 1.61B | 2.17B |
| Net Income | 781.00M | 649.00M | 798.00M | 878.00M | 800.00M | 1.33B |
Balance Sheet | ||||||
| Total Assets | 5.16B | 5.07B | 4.87B | 5.46B | 5.49B | 6.03B |
| Cash, Cash Equivalents and Short-Term Investments | 794.00M | 953.00M | 674.00M | 1.08B | 1.23B | 1.98B |
| Total Debt | 4.74B | 4.95B | 4.96B | 5.57B | 6.05B | 6.01B |
| Total Liabilities | 6.21B | 6.35B | 6.25B | 7.09B | 7.70B | 7.54B |
| Stockholders Equity | -1.05B | -1.28B | -1.39B | -1.63B | -2.21B | -1.52B |
Cash Flow | ||||||
| Free Cash Flow | 1.03B | 865.00M | 660.00M | 656.00M | 816.00M | 1.22B |
| Operating Cash Flow | 1.27B | 1.10B | 886.00M | 954.00M | 1.14B | 1.49B |
| Investing Cash Flow | -221.00M | -227.00M | -162.00M | -286.00M | -328.00M | -259.00M |
| Financing Cash Flow | -621.00M | -599.00M | -1.13B | -815.00M | -1.56B | -3.19B |
Bath & Body Works Technical Analysis
Positive
17.58
Price Trends
18.29
Positive
19.14
Positive
19.52
Positive
Market Momentum
0.88
Negative
65.16
Neutral
89.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBWI, the sentiment is Positive. The current price of 17.58 is below the 20-day moving average (MA) of 18.36, below the 50-day MA of 18.29, and below the 200-day MA of 19.52, indicating a bullish trend. The MACD of 0.88 indicates Negative momentum. The RSI at 65.16 is Neutral, neither overbought nor oversold. The STOCH value of 89.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BBWI.
Bath & Body Works Risk Analysis
Bath & Body Works disclosed 41 risk factors in its most recent earnings report. Bath & Body Works reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bath & Body Works Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $26.70B | 22.67 | 45.40% | 1.13% | 11.16% | 5.20% | |
70 Outperform | $1.63B | 8.74 | 23.11% | ― | 1.08% | 3.88% | |
63 Neutral | $615.57M | 8.28 | 69.99% | 8.14% | 28.31% | 43.42% | |
62 Neutral | $4.22B | 5.59 | -61.76% | 3.82% | -2.18% | 14.77% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $3.08B | 17.22 | 14.11% | 6.63% | 30.43% | -44.33% | |
47 Neutral | $5.97M | 0.83 | 1.71% | 14.46% | 77.22% | -89.32% |
* Consumer Cyclical Sector Average
BBWI
Bath & Body Works
20.95
-4.01
-16.05%
SBH
Sally Beauty
17.40
2.14
14.02%
ULTA
Ulta Beauty
624.46
101.64
19.44%
BWMX
Betterware de Mexico
15.59
2.80
21.86%
MNSO
MINISO Group Holding
10.04
-11.64
-53.69%
TKLF
Yoshitsu Co. Ltd. Sponsored ADR
1.41
-1.81
-56.21%
Bath & Body Works Corporate Events
Business Operations and StrategyExecutive/Board Changes
Bath & Body Works Grants CEO Major Performance Stock Award
Positive
Sep 23, 2026
On September 21, 2026, Bath Body Works granted CEO Daniel Heaf a performance stock unit award with a target value of $10 million, equivalent to 591,366 shares, tied to ambitious stock price hurdles over a four-year performance period. The award s...
Business Operations and StrategyFinancial Disclosures
Bath & Body Works Raises 2026 Earnings Guidance
Positive
Aug 26, 2026
On August 26, 2026, Bath Body Works reported unaudited second‑quarter 2026 results that exceeded its prior guidance, with net sales of $1.5 billion, down 2.3% year on year, but earnings per diluted share rising to $0.58 and adjusted EPS to ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.