Bath & Body Works (BBWI) AI Stock Analysis

• Market Cap: $4.39B
• Dividend Yield: 4.16%
• Average Volume (3M): 4.87M
• Price to Earnings (P/E): 6.6
• Beta (1Y): 1.31
• Revenue Growth: -1.04%
• EPS Growth: -20.88%
• Country: US
• Employees: 8,975
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.35
• Shares Outstanding: 204,721,600
• 10 Day Avg. Volume: 3,712,797
• 30 Day Avg. Volume: 4,871,695
• PEG Ratio: -1.49
• Price to Book (P/B): -5.97
• Price to Sales (P/S): 1.13
• P/FCF Ratio: 12.54
• Enterprise Value/Market Cap: 2.10
• Enterprise Value/Revenue: 1.25
• Enterprise Value/Gross Profit: 2.84
• Enterprise Value/Ebitda: 6.13
• 1Y Price Target: $20.50
• Price Target Upside: -4.38% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 2.93
• Revenue Forecast (FY): $7.18B

• Rating: 53 Neutral
• Price Target: $22.00 ▲(2.61% Upside)

The overall stock score of 53 reflects significant financial challenges, including declining revenue and high leverage, which are partially offset by strong cash flow generation. The technical analysis indicates bearish momentum, while the valuation suggests the stock is undervalued. Strategic initiatives from the earnings call provide some optimism, but challenges remain.

Positive Factors

Market Leadership & Loyalty

A large store footprint and 40 million active loyalty members create a durable competitive moat. This scale supports repeat purchases, efficient distribution of new scents, and targeted marketing, helping sustain revenue streams and customer lifetime value despite cyclical pressures.

Resilient Cash Generation

Improved free cash flow and a healthy operating cash flow to net income ratio provide ongoing internal funding for investments, debt service, and shareholder initiatives. Strong cash conversion cushions the business against margin volatility and supports strategic transformation execution.

Planned Cost Savings to Fund Growth

A credible $250M savings program, with over half identified for 2026, can structurally improve margins and free up capital for product innovation and channel expansion. If executed, these savings reduce reliance on external financing and support reinvestment in durable revenue drivers.

Negative Factors

Declining Revenue & Margin Pressure

Ongoing top-line weakness alongside falling profitability metrics signals structural demand or execution issues. Sustained revenue declines compress operating leverage, limit reinvestment, and make margin recovery harder without clear, lasting changes to product mix or pricing power.

Weak Balance Sheet & High Leverage

Negative equity and elevated leverage materially constrain financial flexibility. This increases refinancing and solvency risk, limits ability to invest countercyclically, and raises the cost of capital — all of which hamper long-term strategic options and resilience to shocks.

Promotional Reliance Eroding Brand & Margins

Persistent heavy promotions damage pricing power and brand positioning, creating a tougher path to restore margins. This dynamic also increases customer price sensitivity and acquisition costs, making long-term margin expansion and premiumization initiatives more difficult to sustain.

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

Bath & Body Works faces challenges with declining revenue and profitability margins, coupled with high leverage and negative equity, which raise concerns about financial stability. However, the company demonstrates resilience in cash flow generation, which provides some buffer against financial pressures.

Income Statement

Bath & Body Works has experienced a decline in revenue growth, with a negative growth rate in the TTM period. The gross profit margin remains stable, but the net profit margin has decreased compared to previous periods. The EBIT and EBITDA margins have also shown a downward trend, indicating pressure on operational efficiency.

Balance Sheet

The company has a high debt-to-equity ratio due to negative stockholders' equity, which poses a significant risk. Return on equity is negative, reflecting losses relative to equity. The equity ratio is also negative, indicating financial instability and potential solvency concerns.

Cash Flow

Despite challenges in profitability, Bath & Body Works has shown improvement in free cash flow growth in the TTM period. The operating cash flow to net income ratio is healthy, suggesting good cash generation relative to earnings. However, the free cash flow to net income ratio indicates some pressure on cash flow sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.35B	7.31B	7.43B	7.56B	7.88B	6.43B
Gross Profit	3.25B	3.23B	3.24B	3.25B	3.85B	3.10B
EBITDA	1.50B	1.62B	1.64B	1.61B	2.17B	2.08B
Net Income	699.00M	798.00M	878.00M	800.00M	1.33B	844.00M
Balance Sheet
Total Assets	4.99B	4.87B	5.46B	5.49B	6.03B	11.57B
Cash, Cash Equivalents and Short-Term Investments	236.00M	674.00M	1.08B	1.23B	1.98B	3.57B
Total Debt	4.98B	4.96B	5.57B	6.05B	6.01B	7.48B
Total Liabilities	6.58B	6.25B	7.09B	7.70B	7.54B	12.23B
Stockholders Equity	-1.59B	-1.39B	-1.63B	-2.21B	-1.52B	-662.00M
Cash Flow
Free Cash Flow	946.00M	660.00M	656.00M	816.00M	1.22B	1.81B
Operating Cash Flow	1.18B	886.00M	954.00M	1.14B	1.49B	2.04B
Investing Cash Flow	-215.00M	-162.00M	-286.00M	-328.00M	-259.00M	-219.00M
Financing Cash Flow	-919.00M	-1.13B	-815.00M	-1.56B	-3.19B	610.00M

Bath & Body Works Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 21.44
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 21.44 is below the 20-day moving average (MA) of 21.93, above the 50-day MA of 20.23, and below the 200-day MA of 26.10, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 48.89 is Neutral, neither overbought nor oversold. The STOCH value of 17.43 is Positive, 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	$8.57B	9.12	17.83%	2.46%	-2.97%	-8.57%
MNSO	72 Outperform	$5.90B	19.75	20.83%	3.10%	13.37%	-19.37%
ULTA	69 Neutral	$29.34B	24.96	47.97%	―	5.45%	4.28%
BBY	62 Neutral	$13.99B	22.04	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
ETSY	57 Neutral	$5.93B	40.99	―	―	1.98%	-20.98%
BBWI	53 Neutral	$4.39B	6.59	―	4.16%	-1.04%	-20.88%

Bath & Body Works Corporate Events

Bath & Body Works Unveils Consumer First Formula Plan

On November 20, 2025, Bath & Body Works announced a strategic transformation plan called the Consumer First Formula, aimed at driving sustainable long-term growth by focusing on creating innovative products, reigniting the brand, winning in the marketplace, and operating with speed and efficiency. The company’s third-quarter results for 2025 showed a slight decline in net sales and earnings per share compared to the previous year, prompting a lowered outlook for the fourth quarter and full-year 2025 due to ongoing macro consumer pressures. Despite these challenges, Bath & Body Works is confident in its future growth potential and plans to implement cost-saving measures to fund revenue-generating initiatives.

The most recent analyst rating on (BBWI) stock is a Buy with a $38.00 price target. To see the full list of analyst forecasts on Bath & Body Works stock, see the BBWI Stock Forecast page.