Bath & Body Works (BBWI) AI Stock Analysis

• Market Cap: $6.63B
• Dividend Yield: 2.54%
• Average Volume (3M): 4.59M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.21
• Revenue Growth: -0.93%
• EPS Growth: -4.07%
• Country: US
• Employees: 8,975
• Sector: Consumer Cyclical
• Sector Strength: 81
• Industry: Specialty Retail
• EPS (TTM): 0.37
• Shares Outstanding: 211,611,800
• 10 Day Avg. Volume: 4,729,754
• 30 Day Avg. Volume: 4,592,970
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.67
• Enterprise Value/Revenue: 1.50
• Enterprise Value/Gross Profit: 3.38
• Enterprise Value/Ebitda: 6.77
• 1Y Price Target: $38.82
• Price Target Upside: 23.08% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 66 Neutral
• Price Target: $34.00 ▲(7.80% Upside)

The overall stock score reflects a mix of solid earnings performance and strategic initiatives, offset by financial instability and leverage concerns. The stock's attractive valuation and positive technical indicators provide additional support, while the earnings call underscores management's confidence and proactive measures to address challenges.

Positive Factors

Partnerships and Collaborations

The new digital app, Disney partnership, expansion into college stores, and enhanced marketing efforts should drive improvements.

Sales Growth

The stock could perform well if the company achieves over 2% sales growth in the second half of the year, given the modest expectations.

Valuation

Shares trading at an F26E EV/EBITDA multiple of 6.0x, suggesting a favorable risk/reward.

Negative Factors

Market Sentiment

Short interest has increased, indicating largely negative sentiment with uncertainty regarding sales.

Tariffs and Costs

Higher tariff impact, higher SG&A deleverage, and softer than expected sales growth could be key factors weighing on the stock.

Traffic Volatility

Bears are concerned around traffic volatility outside of key collaboration periods.

Bath & Body Works Business Overview & Revenue Model

Company Description

Bath & Body Works (BBWI) is a leading specialty retailer of personal care, fragrances, and home products, widely recognized for its high-quality offerings and innovative scents. Established in 1990, the company operates primarily in the retail sector, providing a diverse range of products including body lotions, shower gels, perfumes, candles, and home fragrance items. With a strong presence in both physical stores and online, Bath & Body Works aims to deliver a unique shopping experience characterized by their signature fragrances and seasonal collections.

How the Company Makes Money

Bath & Body Works generates revenue primarily through the sale of its personal care and home fragrance products. The company operates a multi-channel sales model, which includes brick-and-mortar retail stores, an e-commerce platform, and strategic partnerships with third-party retailers. Key revenue streams include direct sales from retail locations, online sales, and seasonal promotions that attract customers. Additionally, Bath & Body Works benefits from loyalty programs that encourage repeat purchases and increase customer retention. The brand also engages in frequent promotional events and offers limited-time collections, which drive foot traffic and boost sales. Collaborations with influencers and seasonal marketing campaigns further enhance brand visibility and contribute to revenue growth.

Bath & Body Works Financial Statement Overview

Summary

Bath & Body Works faces financial challenges with declining revenues and high leverage, as evidenced by negative equity. Profit margins remain solid, but growth is limited, and financial stability is a concern. Cash flow generation is stable, providing some cushion against financial risks, but improvements in revenue growth and equity position are necessary for long-term sustainability.

Income Statement

The income statement shows modest performance with a gross profit margin of 44.55% and a net profit margin of 11.11% TTM. However, revenue growth has been inconsistent, with a decline from previous years. EBIT and EBITDA margins are relatively healthy at 17.53% and 21.58% respectively, but overall profitability is under pressure due to declining revenues.

Balance Sheet

The balance sheet is concerning with a negative stockholders' equity indicating financial instability and high leverage. The debt-to-equity ratio is not calculable due to negative equity, and the equity ratio is negative, reflecting more liabilities than assets. These factors suggest financial risk and require attention.

Cash Flow

Cash flow statements reveal stable cash generation with a positive free cash flow of $781 million TTM and a strong operating cash flow to net income ratio of 1.22. However, free cash flow growth is modest, and the company faces challenges in financing activities, indicating cash flow stability but with limited growth potential.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.31B	7.43B	7.56B	7.88B	6.43B
Gross Profit	3.23B	3.24B	3.25B	3.85B	3.10B
EBITDA	1.62B	1.64B	1.61B	2.17B	2.08B
Net Income	798.00M	878.00M	800.00M	1.33B	844.00M
Balance Sheet
Total Assets	4.87B	5.46B	5.49B	6.03B	11.57B
Cash, Cash Equivalents and Short-Term Investments	674.00M	1.08B	1.23B	1.98B	3.90B
Total Debt	4.96B	5.57B	6.05B	6.01B	9.46B
Total Liabilities	6.25B	7.09B	7.70B	7.54B	12.23B
Stockholders Equity	-1.39B	-1.63B	-2.21B	-1.52B	-662.00M
Cash Flow
Free Cash Flow	660.00M	656.00M	816.00M	1.22B	1.81B
Operating Cash Flow	886.00M	954.00M	1.14B	1.49B	2.04B
Investing Cash Flow	-162.00M	-286.00M	-328.00M	-259.00M	-219.00M
Financing Cash Flow	-1.13B	-815.00M	-1.56B	-3.19B	610.00M

Bath & Body Works Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 31.54 is above the 20-day moving average (MA) of 29.31, above the 50-day MA of 30.26, and below the 200-day MA of 32.14, indicating a neutral trend. The MACD of 0.24 indicates Negative momentum. The RSI at 60.78 is Neutral, neither overbought nor oversold. The STOCH value of 88.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BBWI.

Bath & Body Works Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ULTA	80 Outperform	$23.64B	20.54	50.44%	―	1.06%	-0.29%
MNSO	77 Outperform	$7.94B	24.60	22.92%	2.42%	10.93%	-10.83%
RVLV	73 Outperform	$1.58B	35.28	10.36%	―	10.68%	37.84%
SBH	72 Outperform	$1.34B	7.60	28.94%	―	-0.38%	35.78%
BBWI	66 Neutral	$6.63B	8.32	-52.83%	2.54%	-0.93%	-4.07%
Sector *	61 Neutral	$17.75B	12.56	-5.49%	3.02%	1.43%	-14.12%
ETSY	57 Neutral	$5.57B	44.96	-39.97%	―	2.38%	-38.88%

Bath & Body Works Corporate Events

Bath & Body Works Reports Q2 Financial Results

On August 28, 2025, Bath & Body Works reported its second quarter financial results, showing a 1.5% increase in net sales to $1.5 billion. The company adjusted its full-year earnings guidance, raising the low end of its adjusted earnings per share forecast. The company is focusing on strategic moves to enhance digital experiences, product efficacy, and distribution expansion, aiming for durable long-term growth. Despite a decrease in earnings per diluted share compared to the previous year, the company remains optimistic about its growth prospects.

Bath & Body Works Holds Annual Stockholders Meeting

On June 5, 2025, Bath & Body Works, Inc. held its Annual Meeting of Stockholders, where key decisions were made, including the election of directors and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the 2025 fiscal year. The stockholders also approved the executive compensation plan, with 98.77% of the shares voting in favor, reflecting strong support for the company’s leadership and strategic direction.

Bath & Body Works Reports Strong Q1 2025 Results

On May 29, 2025, Bath & Body Works reported a 2.9% increase in net sales to $1.4 billion for the first quarter of 2025, with earnings per diluted share rising 29% to $0.49, surpassing expectations. The company maintained its full-year 2025 guidance of 1% to 3% net sales growth and earnings per diluted share between $3.25 and $3.60. The announcement also highlighted the appointment of Daniel Heaf as CEO, effective May 16, 2025, signaling a strategic focus on growth in the home fragrance and beauty categories.