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Bath & Body Works
(NYSE:BBWI)
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Rating:60Neutral
Price Target:
$18.00
▲(2.39% Upside)
Action:Reiterated
Date:08/28/26
BBWI scores as a neutral-risk/value setup: strong free cash flow and a very low P/E with a solid dividend support the stock, but the overall score is capped by balance-sheet fragility (high debt and negative equity) and ongoing top-line pressure. Technically, the stock is in a weaker trend (below major moving averages with negative MACD), and while guidance improved, a meaningful portion of the recent EPS strength came from a one-time tariff refund and revenue is still guided to decline.
Positive Factors
Strong cash generation
BBWI generates substantial operating and free cash flow, with free cash flow growing 13.4% year over year. This supports reinvestment, dividends, and debt reduction while providing an internal funding base for the company’s transformation and ongoing retail operations.
Negative Factors
Structurally elevated leverage
High debt combined with negative equity leaves BBWI financially dependent on continued cash generation and access to financing. This reduces flexibility to absorb weaker demand, fund transformation spending, or manage unexpected cost pressures without affecting other capital-allocation priorities.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
BBWI generates substantial operating and free cash flow, with free cash flow growing 13.4% year over year. This supports reinvestment, dividends, and debt reduction while providing an internal funding base for the company’s transformation and ongoing retail operations.
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
$3.51B
Dividend Yield4.73%
Average Volume (3M)6.64M
Price to Earnings (P/E)4.5
Beta (1Y)1.45
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. Volume5,832,316
30 Day Avg. Volume6,636,996
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$22.20Price Target Upside26.28% Upside
Rating ConsensusHold
Number of Analyst Covering18
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 | 1.42B | 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
Negative
17.58
Price Trends
19.21
Negative
19.15
Negative
19.67
Negative
Market Momentum
-0.58
Positive
43.02
Neutral
15.88
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BBWI, the sentiment is Negative. The current price of 17.58 is below the 20-day moving average (MA) of 18.32, below the 50-day MA of 19.21, and below the 200-day MA of 19.67, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 43.02 is Neutral, neither overbought nor oversold. The STOCH value of 15.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $644.69M | 8.65 | 17.36% | 7.60% | 15.53% | 136.38% | |
74 Outperform | $23.13B | 20.25 | 45.40% | 1.13% | 11.16% | 5.20% | |
70 Outperform | $1.48B | 8.10 | 23.11% | ― | 1.08% | 3.88% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
60 Neutral | $3.51B | 4.51 | -61.76% | 4.73% | -2.18% | 14.77% | |
60 Neutral | $2.62B | 14.87 | 11.79% | 7.41% | 30.43% | -44.33% | |
50 Neutral | $7.37M | 1.01 | 1.71% | 4.89% | 77.22% | -89.32% |
* Consumer Cyclical Sector Average
BBWI
Bath & Body Works
16.91
-7.91
-31.87%
SBH
Sally Beauty
16.12
1.09
7.25%
ULTA
Ulta Beauty
557.86
39.70
7.66%
BWMX
Betterware de Mexico
16.69
4.34
35.15%
MNSO
MINISO Group Holding
8.99
-14.87
-62.32%
TKLF
Yoshitsu Co. Ltd. Sponsored ADR
1.72
-1.97
-53.52%
Bath & Body Works Corporate Events
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 ...
Business Operations and Strategy
Bath & Body Works Announces Partial Senior Notes Redemption
Positive
Jul 20, 2026
On July 20, 2026, Bath Body Works, Inc. announced a partial redemption of $250 million of its outstanding 7.500% Senior Notes due 2029, with a redemption date set for August 19, 2026. The notes will be redeemed at 101.250% of their principal amou...
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.