Financial Performance - Consolidated Net Sales for Q1 2025 were $1,424 million, an increase of $40 million or 2.9% compared to Q1 2024[86] - Operating Income for Q1 2025 was $209 million, up $22 million or 11.7% from Q1 2024, with an Operating Income rate of 14.7%[86] - Gross Profit increased by $40 million to $646 million, with a Gross Profit rate of 45.4%, up from 43.8% in Q1 2024[96] - In the first quarter of 2025, the company reported net sales of $1,355 million, with a gross profit of $602 million and a net income of $91 million[135] Expenses and Capital Expenditures - Total General, Administrative and Store Operating Expenses rose by $18 million to $437 million, with a rate of 30.7% of Net Sales[98] - Capital expenditures for Q1 2025 were $39 million, primarily for new off-mall stores and technology projects[109] - The company plans capital expenditures of approximately $250 million to $270 million for 2025, focusing on real estate and technology[111] Cash Flow and Share Repurchase - Net cash provided by operating activities in Q1 2025 was $188 million, compared to $76 million in Q1 2024[106] - The company repurchased 4.326 million shares for $135 million during Q1 2025[104] - The company repurchased a total of 4,326 thousand shares in 2025, with an average stock price of $30.47, and repurchased shares worth $135 million[115] - The company had remaining authority of $382 million under the January 2025 share repurchase program as of May 3, 2025[116] Debt and Credit Facilities - As of May 3, 2025, the total long-term debt stood at $3,886 million, a slight decrease from $4,282 million in May 2024[118] - The company had an available borrowing base of $639 million under its Asset-backed Revolving Credit Facility, with no borrowings outstanding as of May 3, 2025[123] - The company had $11 million of outstanding letters of credit as of May 3, 2025, reducing its availability under the ABL Facility to $628 million[124] - The principal value of outstanding long-term debt is $3,916 million, with an estimated fair value of $3,957 million[149] Tax and Effective Tax Rate - The effective tax rate for Q1 2025 was 28.4%, compared to 26.8% in Q1 2024[102] Risk Management - The company utilizes foreign currency forward contracts to partially offset exchange rate risks associated with Canadian dollar-denominated earnings[144] - Royalties from international partners are exposed to foreign currency exchange rate fluctuations, as they are calculated based on local currency sales[145] - The company monitors credit risk by limiting exposure to any single financial institution and reviewing the credit standing of franchise and wholesale partners[148] - The carrying values of accounts receivable, accounts payable, and accrued expenses approximate their fair values due to short maturities as of May 3, 2025[150] Investment Activities - The company maintains a diversified investment portfolio primarily composed of U.S. government obligations, U.S. Treasury, AAA-rated money market funds, commercial paper, and bank deposits[146][148] - The primary objectives of the investment activities are the preservation of principal, maintenance of liquidity, and maximization of interest income while minimizing risk[146] - The company does not believe there is any material risk to principal associated with interest rate changes due to the short-term nature of its investments[146] - Interest rate swap arrangements may be utilized to adjust exposure to interest rate risk as needed[147] - All outstanding long-term debt as of May 3, 2025, has fixed interest rates, limiting exposure to interest rate risk[147] Credit Ratings - The company's credit ratings as of May 3, 2025, were Ba2 from Moody's and BB+ from S&P for corporate ratings, with a stable outlook[128] Fixed Charge Coverage Ratio - The company maintained a fixed charge coverage ratio requirement of not less than 1.00 to 1.00 during an event of default, but was not required to maintain this ratio as of May 3, 2025[126]

Financial Performance - Bath & Body Works reported revenue of $1.42 billion for the quarter ended April 2025, reflecting a year-over-year increase of 2.9% [1] - The EPS for the same period was $0.49, compared to $0.38 a year ago, indicating a positive growth [1] - The reported revenue matched the Zacks Consensus Estimate of $1.42 billion, resulting in a surprise of -0.02%, while the EPS exceeded the consensus estimate of $0.47 by 4.26% [1] Key Metrics - The stock of Bath & Body Works has returned -0.1% over the past month, contrasting with the Zacks S&P 500 composite's increase of +6.7% [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Store Operations - Total company-operated stores were reported at 1,900, slightly below the average estimate of 1,903 by five analysts [4] - In the United States, there were 1,787 stores, compared to the average estimate of 1,790 [4] - Geographic net sales in the U.S. and Canada reached $1.11 billion, surpassing the four-analyst average estimate of $1.09 billion, with a year-over-year change of +4.2% [4] International Performance - Geographic net sales from international operations were reported at $64 million, slightly below the average estimate of $65.31 million, but showing a year-over-year increase of +10.3% [4] - Direct sales in the U.S. and Canada amounted to $250 million, which was below the average estimate of $265.49 million, reflecting a year-over-year decline of -4.2% [4]

Financial Data and Key Metrics Changes - The company reported net sales of $1.4 billion, an increase of 2.9% compared to the prior year, marking the strongest underlying sales performance since 2021 [28] - Earnings per diluted share were $0.49, exceeding the high end of the guidance range [17] - Gross profit rate was 45.4%, an increase of 160 basis points year-over-year, driven by a 100 basis point improvement in merchandise margin [30][31] Business Line Data and Key Metrics Changes - Body care grew low single digits, driven by the success of the Disney Princess line and the expansion of the everyday luxuries line [21] - Home fragrance also grew low single digits, supported by single wick candles and wallflowers [21] - Soaps and sanitizers grew mid single digits, driven by on-the-go assortments [21] Market Data and Key Metrics Changes - International retail sales grew approximately 10% this quarter, representing about 5% of total net sales [27][30] - U.S. and Canadian store net sales totaled $1.1 billion, an increase of 4.3% versus the prior year [29] Company Strategy and Development Direction - The company aims to transform Bath and Body Works to accelerate growth and deepen customer connections, focusing on consumer-centric strategies [9][10] - Plans include enhancing digital capabilities, improving packaging, exploring new distribution forms, and expanding internationally [12][14] - The strategy will prioritize fewer, bolder initiatives to drive consistent and repeatable growth [53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to absorb current tariff levels and maintain guidance for the year [33][34] - The company is optimistic about the innovation pipeline for the second half of the year, including new product launches and collaborations [50][75] - Management emphasized the importance of emotional connections with consumers and the need for compelling storytelling in marketing [61][92] Other Important Information - The loyalty program has approximately 39 million active members, up 4% from the prior year, driving increased customer engagement [23][24] - The company plans to maintain capital expenditures of $250 million to $270 million, focusing on real estate and technology [37] Q&A Session Summary Question: What attracted you to Bath and Body Works? - The CEO highlighted the emotional connection of the brand and its strong foundation, including a large number of stores and loyal customers [44] Question: Can you elaborate on the go-forward top line commentary? - Management noted that Disney was a key driver of growth and expressed confidence in upcoming product launches [48] Question: What are the building blocks of opportunity for growth? - The CEO mentioned focusing on fewer priorities and leveraging existing investments to drive growth [55] Question: How do you view pricing strategy in light of tariffs? - Management stated they will remain agile and responsive to customer needs while maintaining value [103] Question: What is the strategy for international expansion? - The CEO emphasized a selective approach to international markets, focusing on understanding local consumer needs [105] Question: How do you plan to enhance marketing efforts? - Management indicated a shift towards emotional storytelling and less reliance on price promotions [61]

Financial Data and Key Metrics Changes - The company reported net sales of $1.4 billion, an increase of 2.9% compared to the prior year, marking the strongest underlying sales performance since 2021 [25][14] - Earnings per diluted share were $0.49, exceeding the high end of the guidance range [14] - Gross profit rate was 45.4%, an increase of 160 basis points year-over-year, driven by a 100 basis point improvement in merchandise margin [27][28] Business Line Data and Key Metrics Changes - Body care grew low single digits, driven by the success of the Disney Princess line and the expansion of the everyday luxuries line [18][20] - Home fragrance also grew low single digits, with strong performance from single wick candles and wallflowers [18] - Soaps and sanitizers grew mid single digits, supported by on-the-go products [19] Market Data and Key Metrics Changes - U.S. and Canadian store net sales totaled $1.1 billion, an increase of 4.3% versus the prior year [26] - Direct net sales were $250 million, a decrease of 4.3% compared to last year, but adjusted for Buy Online Pickup in Store (BOPIS), direct sales outperformed store sales [26] - International sales, representing about 5% of total net sales, grew approximately 10.1% to $64 million [27] Company Strategy and Development Direction - The company aims to transform Bath and Body Works by focusing on consumer-centric strategies, enhancing digital capabilities, and exploring new distribution channels [7][10] - International expansion is a key pillar of the long-term strategy, with plans for at least 30 new store openings in 2025 [29][11] - The company is committed to fewer, bolder priorities to accelerate growth through consistent and repeatable drivers [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to absorb current tariff levels and maintain guidance for net sales growth of 1% to 3% for the full year [30][31] - The leadership team is optimistic about the innovation pipeline for the second half of the year, including new product launches and collaborations [46][71] - The company is focused on enhancing customer engagement through its loyalty program, which has approximately 39 million active members [21][22] Other Important Information - The company plans to invest $250 million to $270 million in capital expenditures during the year, focusing on real estate and technology [33] - The loyalty program has been enhanced to increase reward redemption options, aiming to drive higher engagement and sales [22] Q&A Session Summary Question: What attracted you to Bath and Body Works? - The CEO highlighted the emotional connection consumers have with the brand and the strong foundation of the business, including a dedicated workforce and a vertically integrated supply chain [40][41] Question: Can you elaborate on the go-forward top line commentary? - Management noted that Disney was a key driver of sales growth and expressed confidence in upcoming product launches, including Father's Day promotions [44][46] Question: What are the long-term growth rates for body care and home fragrance? - Management expects body care to grow above low single digits over time, while home fragrance is currently facing market pressures but is still growing [66][67] Question: How do you view pricing strategy in light of tariffs? - The company plans to remain agile with pricing, ensuring that it meets customer expectations while maintaining value [100] Question: What are the plans for international expansion? - The CEO emphasized the importance of selecting priority markets and matching them with appropriate business models for growth [101][102]

Group 1: Earnings Performance - Bath & Body Works reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.47 per share, and up from $0.38 per share a year ago [1] - The earnings surprise for this quarter was 4.26%, and the company has surpassed consensus EPS estimates in all four of the last quarters [2] - The company posted revenues of $1.42 billion for the quarter ended April 2025, slightly missing the Zacks Consensus Estimate by 0.02%, but up from $1.38 billion year-over-year [3] Group 2: Stock Performance and Outlook - Bath & Body Works shares have declined approximately 21.4% since the beginning of the year, contrasting with the S&P 500's gain of 0.1% [4] - The current consensus EPS estimate for the upcoming quarter is $0.43 on revenues of $1.57 billion, and for the current fiscal year, it is $3.55 on revenues of $7.5 billion [8] - The estimate revisions trend for Bath & Body Works is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [7] Group 3: Industry Context - The Retail - Miscellaneous industry, to which Bath & Body Works belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable outlook [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Financial Results and Projections - Bath & Body Works, Inc. announced anticipated financial results for Q1 2025, with a focus on revenue growth and user engagement metrics[6]. - The financial results and strategic direction will be further detailed in the upcoming earnings call[6]. Leadership Changes - The company appointed Daniel Heaf as the new Chief Executive Officer effective May 16, 2025, succeeding Gina Boswell[8]. - Ms. Boswell's termination will trigger severance payments as per her executive severance agreement, which was previously disclosed[15]. - The press release detailing these changes was issued on May 19, 2025, highlighting the leadership transition[16]. Compensation and Incentives - Mr. Heaf's annual base salary is set at $1,350,000, with a target annual incentive opportunity of 190% of his base salary[10]. - The company plans to provide Mr. Heaf with an annual equity incentive award opportunity valued at $8,000,000 starting in the 2026 fiscal year[10]. - A one-time award of restricted stock units valued at $2,500,000 will be granted to Mr. Heaf, with vesting occurring over three years[10]. Strategic Focus - The company is expected to continue its focus on market expansion and new product development under the new leadership[16]. - The company is committed to maintaining its competitive edge through strategic leadership and operational improvements[16].

Q1 2025 Financial Highlights - Net sales reached $1.4 billion, a 2.9% increase year-over-year, hitting the high end of guidance[17, 67, 69] - Gross profit rate improved by 160 basis points to 45.4%[17, 67, 69] - Operating income increased by 11.7% year-over-year to $209 million[17, 67] - Diluted earnings per share (EPS) grew by 28.9% year-over-year to $0.49, exceeding the high end of guidance[17, 67] Channel Performance - Store sales in the U S & Canada increased by 4.3% to $1.1 billion, benefiting from Buy Online, Pickup In Store (BOPIS) which contributed approximately 2 percentage points[62, 65] - Direct sales in the U S & Canada decreased by 4.3% to $250 million, negatively impacted by BOPIS by approximately 7 percentage points, with BOPIS representing about 30% of total direct demand[63, 65] - International sales increased by 10.1% to $64 million[64, 65] FY 2025 Guidance - The company maintains net sales growth guidance of 1% to 3% and earnings per diluted share guidance of $3.25 to $3.60[72, 74] - The company expects to repurchase approximately $300 million of shares in FY 2025[74] Q2 2025 Guidance - The company expects net sales to be flat to up 2%[75, 76] - The company expects earnings per diluted share to be $0.33 to $0.38[75]

Core Insights - Bath & Body Works, Inc. reported a strong start to 2025 with net sales of $1,424 million, reflecting a 2.9% increase compared to $1,384 million in the same quarter of 2024 [4][9] - The company appointed Daniel Heaf as CEO, effective May 16, 2025, aiming to leverage his leadership to accelerate growth [3][4] - The company maintains its full-year 2025 net sales guidance of 1% to 3% growth and earnings per diluted share guidance of $3.25 to $3.60 [6][9] Financial Performance - First quarter earnings per diluted share increased by 29% to $0.49, compared to $0.38 in the previous year [5][9] - Operating income for the first quarter was reported at $209 million, up from $187 million in the same quarter last year [5][9] - Net income rose to $105 million from $87 million year-over-year [5][9] Sales Breakdown - U.S. and Canada store sales reached $1,110 million, a 4.3% increase from $1,065 million in the prior year [26] - Direct sales in the U.S. and Canada decreased by 4.3% to $250 million from $261 million [26] - International sales grew by 10.1% to $64 million compared to $58 million in the previous year [26] Store Operations - As of May 3, 2025, the total number of company-operated stores increased to 1,900, with 1,787 in the U.S. and 113 in Canada [27] - The company opened 13 new stores and closed 8 in the U.S. and Canada during the period [27] - Internationally, the total partner-operated stores decreased to 524, with 489 in other international locations [29] Future Guidance - The company expects second quarter 2025 net sales to be flat to up 2% compared to $1,526 million in the second quarter of 2024 [7] - Earnings per diluted share for the second quarter is projected to be between $0.33 and $0.38, down from $0.68 in the same quarter last year [7] - The anticipated impact of current tariff rates is included in the full-year guidance [6][7]

Group 1 - Bath & Body Works (BBWI) is expected to announce fiscal Q1 2025 earnings on May 29, 2025, with analysts predicting earnings of 47 cents per share and revenue of $1.42 billion, reflecting a 21% increase in earnings and a 3% rise in sales year-over-year [1] - In Q4 2024, BBWI reported a 4% decrease in net sales and an 18% decline in earnings per diluted share, attributing these results to a shifted fiscal calendar and reduced consumer demand [2] - The company faces challenges from U.S. tariffs on Chinese imports, sluggish discretionary spending, and increased competition from lower-cost private-label options, alongside high interest rates and economic uncertainty affecting consumer interest in non-essential products [2] Group 2 - For 2025, BBWI's guidance indicates 1-3% sales growth and an EPS range of $3.25-$3.60, suggesting cautious optimism with modest growth compared to adjusted results from 2024 [2] - The current market capitalization of BBWI is $6.5 billion, with total revenue over the last twelve months at $7.3 billion, operational profits of $1.3 billion, and net income of $798 million [2] Group 3 - Historical data shows that BBWI stock has increased 60% of the time following earnings announcements, with a median one-day rise of 4.8% and a maximum recorded increase of 25% [1][5] - There are 20 documented earnings data points over the past five years, with 12 positive and 8 negative one-day returns, indicating positive returns occurred approximately 60% of the time [5]

Core Insights - Bath & Body Works (BBWI) is expected to report quarterly earnings of $0.46 per share, reflecting a 21.1% increase year-over-year, with revenues projected at $1.42 billion, a 2.8% increase from the previous year [1] Earnings Estimates - The consensus EPS estimate has been revised down by 2% in the last 30 days, indicating a reassessment by analysts [2] - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3] Revenue Projections - Analysts forecast 'Geographic Net Sales- Stores - U.S. and Canada' to reach $1.09 billion, a 2.8% increase year-over-year [5] - The estimate for 'Geographic Net Sales- International' is $65.31 million, indicating a 12.6% year-over-year increase [5] - 'Geographic Net Sales- Direct - U.S. and Canada' is estimated at $265.49 million, reflecting a 1.7% increase from the previous year [5] Store Metrics - Total company-operated stores are projected to be 1,903, up from 1,855 in the same quarter last year [6] - Total company-operated stores in Canada are expected to reach 113, compared to 111 a year ago [6] - Total company-operated stores in the U.S. are estimated at 1,790, an increase from 1,744 year-over-year [7] - 'Company-operated U.S. Store Data - Total Selling Square Feet' is projected at 5.09 million, up from 4.94 million [7] Average Store Size and International Operations - The average store size for company-operated U.S. stores is expected to be 2.85 million square feet, slightly up from 2.83 million [8] - Total partner-operated stores internationally are projected to reach 506, compared to 455 last year [8] - Total partner-operated stores internationally are estimated at 541, up from 486 year-over-year [9] Stock Performance - Over the past month, Bath & Body Works shares have returned +2.3%, while the Zacks S&P 500 composite has seen a +8.2% change [9]