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Bath & Body Works (BBWI) AI Stock Analysis
Bath & Body Works
(NYSE:BBWI)
BBWI’s score is driven primarily by a mixed financial profile: strong free cash flow and continued profitability are weighed down by high leverage/negative equity and a weak revenue trajectory. Valuation is a key positive (low P/E and ~3.4% yield), while technicals are supportive but near-term momentum appears overbought. The latest earnings call adds modest support via raised EPS/FCF guidance, but the reliance on a one-time tariff refund and continued guided sales declines keep the outlook restrained.
Bath & Body Works Key Performance Indicators (KPIs)
Revenue By SegmentBreaks down revenue by product lines or business units, revealing which segments are driving sales and where there might be opportunities or challenges.
Stores remain the dominant, seasonally concentrated revenue engine while Direct’s year‑over‑year holiday peaks have steadily softened — a red flag that digital growth hasn’t yet offset core category (body care) weakness. Management’s Amazon launch and new‑formula momentum provide credible upside, but the reaffirmed guidance, margin headwinds from tariffs/inflation, and international shipping disruptions mean any recovery will be gradual. The business is reliant on stores for near‑term sales stability; durable improvement depends on translating early product/channel proof points into sustained e‑commerce traction.
The FlyBath & Body Works (BBWI) vs. SPDR S&P 500 ETF (SPY)
- Market Cap
- $4.31B
- Dividend Yield
- 3.75%
- Average Volume (3M)
- 6.86M
- Price to Earnings (P/E)
- 5.7
- Beta (1Y)
- 1.29
- Revenue Growth
- -2.18%
- EPS Growth
- 14.77%
- Country
- US
- Employees
- 60,735
- Sector
- Consumer Cyclical
- Sector Strength
- 61
- Industry
- Specialty Retail
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, ha...
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 body...
Bath & Body Works Earnings Call Summary
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.
Q2-2026 Updates
Positive Updates
Negative 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
Mixed fundamentals. Profitability remains solid (TTM gross margin ~44%, operating margin ~14%, net margin ~11%) and cash generation is strong (TTM operating cash flow ~$1.27B; free cash flow ~$1.03B with +13.4% growth). Offsetting this is material balance-sheet risk (high debt ~ $4.7B and negative equity ~ -$1.1B) and a sharply negative recent revenue trend (TTM revenue growth -48.3%), which increases sensitivity to any demand or margin pressure.
Income Statement
62PositiveBalance Sheet
28NegativeCash Flow
74Positive| 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
Price Trends
Market Momentum
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 21.36 is above the 20-day moving average (MA) of 21.08, above the 50-day MA of 18.95, and above the 200-day MA of 19.53, indicating a bullish trend. The MACD of 1.13 indicates Positive momentum. The RSI at 54.27 is Neutral, neither overbought nor oversold. The STOCH value of 47.08 is Neutral, 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.
Latest Risks Added
0 New RisksBath & Body Works Peers Comparison
Overall Rating
SBH81Outperform
ULTA72Outperform- BBWI65Neutral
BWMX64Neutral
MNSO58Neutral
TKLF47Neutral
Financial Indicators
| Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| SBH | 81Outperform | $1.75B | 9.52 | 23.11% | ― | 1.08% | 3.88% |
| ULTA | 72Outperform | $27.78B | 23.40 | 45.40% | ― | 11.16% | 5.20% |
| BBWI | 65Neutral | $4.45B | 5.74 | -61.76% | 3.75% | -2.18% | 14.77% |
| BWMX | 64Neutral | $652.29M | 8.78 | 69.99% | 7.96% | 28.31% | 43.42% |
| Sector * | 61Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
| MNSO | 58Neutral | $3.35B | 18.77 | 14.11% | 6.03% | 30.43% | -44.33% |
| TKLF | 47Neutral | $5.93M | 0.85 | 1.71% | 14.56% | 77.22% | -89.32% |
* Consumer Cyclical Sector Average
Performance Comparison
| Show on chart | Ticker | Company Name | Price | Change | % Change |
|---|---|---|---|---|---|
| BBWI | Bath & Body Works, Inc. | 21.36 | -0.14 | -0.63% | |
| SBH | Sally Beauty Holdings | 18.31 | 4.20 | 29.77% | |
| ULTA | Ulta Beauty | 644.76 | 128.20 | 24.82% | |
| BWMX | Betterware De Mexico, S.A. De C.V | 16.59 | 3.39 | 25.67% | |
| MNSO | Miniso Group Holding Ltd. | 11.04 | -10.18 | -47.98% | |
| TKLF | Yoshitsu Co. Ltd. Sponsored ADR | 1.45 | -1.59 | -52.30% |
Bath & Body Works Corporate Events
Bath & Body Works Grants CEO Major Performance Stock Award
PositiveOn 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...
Bath & Body Works Raises 2026 Earnings Guidance
PositiveOn 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 t...
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.
Date of analysis: Nov 05, 2026