Bath & Body Works

BBWI

Market cap $5.34B

Bath & Body Works stock (NYSE: BBWI) has decreased by 33% year to date, in contrast to a 13% increase in the S&P 500. What drives this sharp decline?

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Bath & Body Works is positioned for a turnaround, driven by improving capital efficiency, expanding off-mall footprint, and positive free cash flow outlook. BBWI's management projects FY 2025 free cash flow of $750–$850 million and EPS growth, supported by supply chain optimization and a strong loyalty program. BBWI trades at a significant discount to peers, with a forward P/S ratio of 0.71x and robust return on invested capital, indicating undervaluation and resilience.

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Bath & Body Works lifts its full-year outlook after second-quarter strength, driven by sales growth, product launches and resilient profitability.

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COLUMBUS, Ohio, Sept. 08, 2025 (GLOBE NEWSWIRE) -- From festive candles to luxurious body care, Bath & Body Works is the trusted destination for gifting and self-care during the holiday season. To meet this expected surge in holiday demand, Bath & Body Works is announcing plans to hire more than 30,000 seasonal associates across the U.S., Canada and Puerto Rico.

I downgrade BBWI stock to sell as 2Q25 results confirm underlying demand weakness, inventory buildup, and margin pressures, despite headline beats. Bath & Body Works faces structural challenges: failure to attract younger consumers, brand relevance issues, and an overwhelming in-store experience for new shoppers. Inventory growth far outpaces sales, raising the risk of heavy discounting and further margin erosion in the coming quarters.

Bath & Body Works, Inc. (NYSE:BBWI ) Goldman Sachs 32nd Annual Global Retailing Conference 2025 September 3, 2025 8:55 AM EDT Company Participants Daniel Heaf - CEO & Director Eva Boratto - Chief Financial Officer Conference Call Participants Katharine McShane - Goldman Sachs Group, Inc., Research Division Presentation Katharine McShane MD & Retail Analyst Okay. Good morning, everybody.