Bath & Body Works (BBWI) AI Stock Analysis

• Market Cap: $4.56B
• Dividend Yield: 4.16%
• Average Volume (3M): 4.71M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• Revenue Growth: -1.04%
• EPS Growth: -20.88%
• Country: US
• Employees: 8,975
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 2.05
• Shares Outstanding: 204,721,600
• 10 Day Avg. Volume: 5,469,962
• 30 Day Avg. Volume: 4,714,547
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.88
• Enterprise Value/Revenue: 1.18
• Enterprise Value/Gross Profit: 2.70
• Enterprise Value/Ebitda: 6.23
• 1Y Price Target: $25.30
• Price Target Upside: 13.50% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12
• EPS Forecast (FY): 2.63
• Revenue Forecast (FY): $7.07B

• Rating: 56 Neutral
• Price Target: $23.00 ▲(3.19% Upside)
• Action: Reiterated Date: 03/06/26
• Date: Action: Reiterated 03/06/26

BBWI scores in the mid-range primarily due to elevated balance-sheet risk (high debt and negative equity) and guidance for further sales/EPS declines in 2026. Offsetting factors include continued strong cash generation, an above-market dividend yield, and a neutral technical setup with modest near-term momentum but a still-weak longer-term trend.

Positive Factors

Free cash flow generation

Strong FY2025 free cash flow of $865M demonstrates durable cash generation capacity. This provides the company with internal funding to execute the Consumer First turnaround, sustain the dividend, repay debt (note redemptions) and fund targeted investments without relying solely on external capital.

Product innovation momentum

Early innovation proof points — notably a new moisturizing hand soap with strong sell-through — validate the Consumer First Formula. Durable product relevance in core categories supports repeat purchase, brand differentiation, and pricing resilience over the medium term as the company refreshes its pipeline.

Distribution & international expansion

Expanded distribution (Amazon launch) and international store growth create structural channels to regain lapsed customers and scale beyond North America. The company has factored a ~$50M benefit into guidance, indicating management sees durable revenue leverage from broader, multi-channel reach.

Negative Factors

Weak balance sheet / negative equity

Negative shareholders' equity and a high debt-to-equity ratio create persistent solvency and refinancing risks. Even with solid cash flow, negative equity constrains financial flexibility, raises creditor scrutiny, and can limit strategic options if operating performance weakens or interest costs rise.

Guided sales decline

Management's guidance for another year of comparable sales declines implies prolonged top-line pressure. Sustained revenue contraction reduces operating leverage, slows deleveraging, hinders the pace of turnaround benefits and forces heavier reliance on cost savings to maintain cash returns.

Margin pressure & cost headwinds

Tariffs, deliberate product investments and higher SG&A guidance point to structural margin compression. Reduced gross and operating margins limit internally generated funds for reinvestment and debt reduction, making sustained margin recovery a key medium-term execution risk.

Bath & Body Works Business Overview & Revenue Model

Company Description

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. The company sells its products under the Bath & Body Works, White Barn, and other brand names through specialty retail stores and websites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. As of January 29, 2022, it operated 1,755 company-operated retail stores and 338 international partner-operated stores. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

How the Company Makes Money

Bath & Body Works generates revenue through multiple channels, primarily through direct sales in its retail locations and e-commerce platforms. The company’s core revenue streams include sales of personal care products such as body care, skincare, and fragrances, as well as home fragrance items like candles and room sprays. Seasonal promotions and limited-edition launches significantly boost sales, particularly during holidays. Additionally, Bath & Body Works benefits from a strong customer loyalty program, encouraging repeat purchases. The company also engages in strategic partnerships and collaborations that enhance its product offerings and market reach, contributing to overall revenue growth.

Bath & Body Works Financial Statement Overview

Summary

Operating fundamentals are mixed: profitability and cash generation remain solid (FY operating margin ~15%, FCF ~ $0.9B), but revenue is flat-to-down and margins have compressed from prior peaks. The biggest drag is balance-sheet risk, with very high debt (~$5.0B) and persistently negative equity, which limits financial flexibility.

Income Statement

Revenue has been essentially flat to down over the last several years, with the most recent year showing another small decline versus prior periods. Profitability remains solid for specialty retail (gross margin ~44% and operating margin ~15% in the latest year), but earnings power has clearly moderated from the 2022 peak as operating and net margins compressed. Overall, the business is still meaningfully profitable, but the trend is moving the wrong way on both sales growth and margins.

Balance Sheet

Leverage is a key concern: total debt remains very high (~$5.0B) while shareholders’ equity is negative across all periods provided. This capital structure reduces financial flexibility and increases sensitivity to any demand slowdown or margin pressure. While total assets are relatively stable, the persistent negative equity profile is a structural weakness and keeps balance sheet quality below average.

Cash Flow

Cash generation is a relative strength: the company produced strong operating cash flow (~$1.1B) and free cash flow (~$0.9B) in the latest year. However, free cash flow has been volatile and recently declined, and cash generation does not consistently exceed net income (free cash flow is below net income in each period shown). Cash flow still looks supportive, but the downtrend and variability temper the score.

Breakdown	Jan 2026	Jan 2025	Jan 2024	Jan 2023	Jan 2022
Income Statement
Total Revenue	7.29B	7.31B	7.43B	7.56B	7.88B
Gross Profit	3.19B	3.23B	3.24B	3.25B	3.85B
EBITDA	1.38B	1.62B	1.64B	1.61B	2.17B
Net Income	649.00M	798.00M	878.00M	800.00M	1.33B
Balance Sheet
Total Assets	5.07B	4.87B	5.46B	5.49B	6.03B
Cash, Cash Equivalents and Short-Term Investments	953.00M	674.00M	1.08B	1.23B	1.98B
Total Debt	4.95B	4.96B	5.57B	6.05B	6.01B
Total Liabilities	6.35B	6.25B	7.09B	7.70B	7.54B
Stockholders Equity	-1.28B	-1.39B	-1.63B	-2.21B	-1.52B
Cash Flow
Free Cash Flow	865.00M	660.00M	656.00M	816.00M	1.22B
Operating Cash Flow	1.10B	886.00M	954.00M	1.14B	1.49B
Investing Cash Flow	-227.00M	-162.00M	-286.00M	-328.00M	-259.00M
Financing Cash Flow	-599.00M	-1.13B	-815.00M	-1.56B	-3.19B

Bath & Body Works Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 22.29 is below the 20-day moving average (MA) of 22.98, above the 50-day MA of 22.04, and below the 200-day MA of 25.03, indicating a neutral trend. The MACD of 0.15 indicates Positive momentum. The RSI at 47.97 is Neutral, neither overbought nor oversold. The STOCH value of 41.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BBWI.

Bath & Body Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIPS	81 Outperform	$7.88B	8.74	17.78%	2.46%	-2.97%	-8.57%
MNSO	72 Outperform	$5.24B	28.32	20.83%	3.10%	13.37%	-19.37%
ULTA	69 Neutral	$29.00B	25.18	47.97%	―	5.45%	4.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BBWI	56 Neutral	$4.56B	―	―	4.16%	-1.04%	-20.88%
ETSY	55 Neutral	$5.45B	33.41	―	―	1.98%	-20.98%
BBY	51 Neutral	$13.75B	12.85	37.04%	5.46%	-0.95%	-48.28%

Bath & Body Works Corporate Events

Bath & Body Works Reports Q4 Results, Guides 2026 Lower

Bath & Body Works reported on March 4, 2026 that fourth-quarter 2025 net sales fell 2% to $2.7 billion, with earnings per diluted share declining to $1.99, or $2.05 on an adjusted basis, as it absorbed $15 million in transformation-related costs. Full-year 2025 net sales were essentially flat at $7.3 billion, but earnings per share dropped to $3.11, or $3.21 adjusted, while the company repurchased 15.1 million shares for $400 million.

Management said fourth-quarter results came in above guidance and highlighted early progress on its “Consumer First Formula,” including accelerated innovation in core categories, brand refresh efforts, an earlier-than-planned Amazon launch and a streamlined operating model. Despite this, Bath & Body Works guided to a 2.5% to 4.5% net sales decline for fiscal 2026 and lower adjusted earnings, reflecting ongoing business transformation, though headline EPS is expected to benefit from litigation-related gains, tax items and bond-related impacts, alongside projected free cash flow of about $600 million and interest savings from redeeming remaining 2027 bonds.

The most recent analyst rating on (BBWI) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Bath & Body Works stock, see the BBWI Stock Forecast page.

Bath & Body Works Announces Redemption of 2027 Senior Notes

On March 3, 2026, Bath & Body Works, Inc. announced it had issued a notice of redemption for all outstanding 6.694% Senior Notes due 2027, with a redemption date set for April 10, 2026. The redemption price will be determined under the governing indenture as the greater of 100% of the principal amount or the present value of remaining scheduled payments discounted at the applicable treasury rate plus 50 basis points, together with accrued interest to the redemption date.

This move signals an active approach to managing the company’s debt profile and could reduce future interest expense or allow for refinancing on more favorable terms, depending on market conditions. The transaction may improve Bath & Body Works’ capital structure flexibility and is likely to be closely watched by bondholders and equity investors assessing the company’s balance sheet strength and financial strategy.

The most recent analyst rating on (BBWI) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Bath & Body Works stock, see the BBWI Stock Forecast page.

Bath & Body Works announces chief legal officer transition

On February 24, 2026, Bath & Body Works, Inc. announced that Michael Wu ceased serving as its Chief Legal Officer and Corporate Secretary, and the company has begun a search for his successor. Wu is expected to remain as a non-executive employee through an orderly transition period until around March 27, 2026, during which he will continue to receive his current compensation and benefits.

Subject to his continued employment in good standing through the anticipated separation date, Wu’s departure will be treated as a termination without cause under his existing executive severance agreement, entitling him to specified payments and benefits. After his separation, he will remain bound by ongoing restrictive covenants, including perpetual confidentiality, a one-year non-solicitation obligation and a nine-month non-competition commitment, underscoring the company’s effort to protect its legal and strategic interests during the leadership change.

The most recent analyst rating on (BBWI) stock is a Hold with a $23.00 price target. To see the full list of analyst forecasts on Bath & Body Works stock, see the BBWI Stock Forecast page.