Financial Data and Key Metrics Changes - The company generated earnings from continuing operations per diluted share of $1.86, exceeding guidance of $1.45 to $1.65 per share, driven by better-than-expected margin rates and lower SG&A expenses [28][30] - Net sales for the fourth quarter were $2.9 billion, a decline of 5% compared to last year, but up 29% compared to 2019 [28][29] - The gross margin rate for the fourth quarter decreased by 480 basis points to 43%, primarily due to increased product costs and promotional activities [30][34] Business Line Data and Key Metrics Changes - The men's business was the fastest-growing category in body care, with a successful launch of new products [23][25] - Body care outperformed in the fourth quarter, led by body lotion and cleansers, while home fragrance sales were down compared to last year [24][26] - The gifting business exceeded expectations, with record high gift set sales during the holiday season [21][22] Market Data and Key Metrics Changes - International sales grew 30% year-over-year to $95 million, with total international system-wide retail sales approximately $250 million for the fourth quarter [29][34] - The company has a strong presence in the U.S. market, with products estimated to be in 40% of American households [8][10] Company Strategy and Development Direction - The company aims to drive growth by expanding its customer base, optimizing product offerings, and enhancing digital capabilities [12][16] - A focus on improving profitability through targeted marketing and reducing reliance on broad promotions is emphasized [15][35] - The company is targeting $200 million in annual cost savings, with over half expected to be realized in 2023 [18][37] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth despite ongoing macroeconomic challenges and inflationary pressures [20][39] - The company anticipates a continuation of soft sales trends in the first half of 2023, with a moderate improvement expected in the latter half [39][44] - The company is committed to maintaining a clean inventory position and leveraging its agile supply chain to maximize sales [33][44] Other Important Information - The loyalty program has enrolled 33 million members, with over 80% being active, contributing significantly to sales [13][74] - The company plans to invest approximately $300 million to $350 million in capital expenditures for 2023, focusing on growth initiatives [41][42] Q&A Session All Questions and Answers Question: Cost inflation and margin outlook - Management discussed three main pressure points for inflation: raw materials, transportation, and labor, with some improvements expected in raw material costs [49][50] Question: Targeting 20% EBIT margin - Management acknowledged the challenge of reaching a 20% EBIT margin but emphasized the importance of net sales growth and AUR increases to achieve this target [54][56] Question: Business trends in Q4 and January - The company noted that November was the softest month, with strong sales performance in December and January, particularly during promotional events [66][67] Question: Role of the loyalty program - The loyalty program has shown strong enrollment and engagement, significantly impacting customer spending and retention [73][75]

Financial Outlook for 2023 - The company anticipates sales to be flat to down mid-single digits for the full year 2023[4] - Gross margin rate is expected to be approximately 42% for the full year 2023[4] - SG&A expense rate is projected to be approximately 26% for the full year 2023[4] - Free cash flow is estimated to be between $600 million and $700 million for the full year 2023[4] - Earnings from continuing operations per diluted share are projected to be between $2.50 and $3.00 for the full year 2023[4] Store Count and Square Footage - Bath & Body Works U S store count increased by 42 to 1,693 in 2022, with selling square footage increasing by 5% to 4,712,000 square feet[13] - Bath & Body Works Canada store count increased by 5 to 109 in 2022, with selling square footage increasing by 10% to 297,000 square feet[14] - The company forecasts to increase U S store count to be between 1,733 and 1,743 in 2023, an increase of 2% to 3%[18] - The company forecasts to increase U S selling square footage to be between 4,908,000 and 4,930,000 square feet in 2023, an increase of 4% to 5%[19] Expenses - Full-year 2022 selling expenses were $1,205 million, representing 15.9% of net sales[8] - Full-year 2022 home office & marketing expenses were $674 million, representing 8.9% of net sales[8]

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements, reflecting performance and key financial changes after the spin-off [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) The company reported declines in net sales, operating income, and diluted EPS for Q3 and YTD 2022 versus 2021 Consolidated Statements of Income (in millions, except per share amounts) | Metric | Q3 2022 | Q3 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,604 | $1,681 | $4,672 | $4,854 | | **Gross Profit** | $678 | $839 | $2,006 | $2,409 | | **Operating Income** | $202 | $409 | $724 | $1,130 | | **Net Income from Continuing Operations** | $91 | $177 | $366 | $483 | | **Diluted EPS from Continuing Operations** | $0.40 | $0.66 | $1.56 | $1.74 | [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet as of October 29, 2022, reflects decreased total assets and cash, increased inventories, and a larger equity deficit Key Balance Sheet Items (in millions) | Account | Oct 29, 2022 (Unaudited) | Jan 29, 2022 | Oct 30, 2021 (Unaudited) | | :--- | :--- | :--- | :--- | | **Cash and Cash Equivalents** | $295 | $1,979 | $1,441 | | **Inventories** | $1,269 | $709 | $1,149 | | **Total Assets** | $5,133 | $6,026 | $6,031 | | **Long-term Debt** | $4,860 | $4,854 | $4,852 | | **Total Equity (Deficit)** | $(2,608) | $(1,517) | $(1,675) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations significantly decreased, and financing activities, mainly share repurchases and dividends, caused a substantial net cash decrease Year-to-Date Cash Flow Summary (in millions) | Activity | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $67 | $447 | | Net Cash Used for Investing Activities | $(252) | $(228) | | Net Cash Used for Financing Activities | $(1,499) | $(2,713) | | **Net Decrease in Cash** | **$(1,684)** | **$(2,492)** | - Financing activities in YTD 2022 were dominated by repurchases of common stock (**$1.312 billion**) and dividend payments (**$140 million**)[24](index=24&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the Victoria's Secret spin-off, revenue disaggregation, capital returns, stable debt, and new CEO appointment - The company completed the tax-free spin-off of its Victoria's Secret business on August 2, 2021, now reported as discontinued operations for all periods presented[28](index=28&type=chunk) Net Sales Disaggregation (in millions) | Channel | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | | Stores - U.S. and Canada | $3,398 | $3,518 | | Direct - U.S. and Canada | $1,030 | $1,126 | | International | $244 | $210 | | **Total Net Sales** | **$4,672** | **$4,854** | - In February 2022, the Board authorized a new **$1.5 billion** share repurchase program, with **26.7 million** shares repurchased year-to-date for **$1.312 billion**, including **$1 billion** via ASR[57](index=57&type=chunk)[58](index=58&type=chunk) - In November 2022, the Board appointed Gina R. Boswell as the new Chief Executive Officer, effective December 1, 2022[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q3 2022 sales and income declines from lower traffic and inflation, outlining profit improvement and liquidity management [Executive Overview and Key Challenges](index=19&type=section&id=Executive%20Overview%20and%20Key%20Challenges) Q3 2022 saw declines in net sales and operating income due to lower transactions, inflation, supply chain volatility, and increased IT/CEO costs - Q3 2022 net sales decreased **5%** to **$1.604 billion**, and operating income decreased **51%** to **$202 million** compared to Q3 2021[81](index=81&type=chunk) - The company estimates the full-year 2022 incremental inflation impact to be between **$220 million** and **$230 million**, affecting raw materials, transportation, and wages[82](index=82&type=chunk) - Profit improvement initiatives in Q3, including optimizing corporate overhead and store expenses, resulted in the elimination of about **130 roles** and a benefit of approximately **$15 million**[84](index=84&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q3 2022 net sales decreased, gross profit rate declined due to inflation and promotions, and operating expenses rose from IT investments Q3 2022 vs Q3 2021 Net Sales Change by Channel | Channel | % Change | | :--- | :--- | | Stores - U.S. and Canada | (5%) | | Direct - U.S. and Canada | (6%) | | International | 10% | | **Total Net Sales** | **(5%)** | - The Q3 2022 gross profit rate decreased to **42.2%** from **49.9%** in Q3 2021, driven by lower merchandise margin and buying/occupancy expense deleverage[100](index=100&type=chunk) - YTD 2022 operating income decreased by **$406 million** to **$724 million**, with the operating margin falling to **15.5%** from **23.3%** in YTD 2021[103](index=103&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=24&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) Liquidity is primarily from operations, with cash significantly reduced by share repurchases and dividends, but a substantial ABL facility remains available - The company believes its current cash position, cash flow from operations, and ABL Facility borrowing capacity are sufficient for at least the next twelve months[111](index=111&type=chunk) - Net cash used for financing activities in YTD 2022 was **$1.499 billion**, primarily consisting of **$1.312 billion** for share repurchases and **$140 million** for dividends[119](index=119&type=chunk) - The February 2022 share repurchase program had **$188 million** of remaining authority as of October 29, 2022[125](index=125&type=chunk) - As of October 29, 2022, the company had **$734 million** available under its **$750 million** ABL Facility[131](index=131&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are foreign exchange rate fluctuations, especially with the Canadian dollar, and interest rate changes, mitigated by fixed-rate debt - The company's primary market risks arise from foreign currency exchange rates, specifically the Canadian dollar, and interest rates[138](index=138&type=chunk) - Interest rate risk is mitigated because all long-term debt as of October 29, 2022, has fixed interest rates[140](index=140&type=chunk) - The company uses foreign currency forward contracts to partially offset risks associated with its Canadian operations[138](index=138&type=chunk) [Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of October 29, 2022, with no material changes to internal control over financial reporting - Management, including the Interim CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[143](index=143&type=chunk) - No changes in internal control over financial reporting occurred in Q3 2022 that materially affected, or are reasonably likely to materially affect, internal controls[143](index=143&type=chunk) Part II. Other Information [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various lawsuits, but management does not expect a material adverse effect on financial results or position - The company is a defendant in various lawsuits but does not expect them to have a material adverse effect on its financial condition or results of operations[145](index=145&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) This section refers to risk factors affecting the business as detailed in the company's 2021 Annual Report on Form 10-K - The report refers to the risk factors detailed in the company's 2021 Annual Report on Form 10-K for a comprehensive understanding of potential risks[146](index=146&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2022, the company repurchased a small number of shares, primarily for tax payments upon vesting of employee stock awards Q3 2022 Share Repurchases | Period | Total Shares Purchased (thousands) | Average Price Paid per Share | | :--- | :--- | :--- | | August 2022 | 13 | $38.36 | | September 2022 | 6 | $37.90 | | October 2022 | 9 | $34.92 | | **Total** | **28** | | - The repurchased shares primarily relate to tax payments due upon vesting of associate restricted stock and performance share unit awards[148](index=148&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the cash incentive plan, guarantor subsidiaries, and CEO/CFO certifications - Key exhibits filed include the company's amended cash incentive plan, a list of guarantor subsidiaries, and CEO/CFO certifications under Sections 302 and 906[151](index=151&type=chunk)

Bath & Body Works, Inc. (NYSE:BBWI) Q2 2022 Earnings Conference Call August 18, 2022 9:00 AM ET Company Participants Wendy Arlin - Chief Financial Officer Sarah Nash - Executive Chair & Interim Chief Executive Officer Julie Rosen - President Conference Call Participants Lorraine Hutchinson - Bank of America Jesse Sobelson - Wells Fargo Simeon Siegel - BMO Capital Markets Alex Straton - Morgan Stanley Leah Jordan - Goldman Sachs Olivia Tong - Raymond James Stephanie Wissink - Jefferies Alec Legg - B. Riley M ...

Bath&BodyWorks® Second Quarter Earnings Presentation August 17, 2022 Forward Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 • We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this presentation or made by our company or our management involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingl ...

Bath & Body Works, Inc. (NYSE:BBWI) Q1 2022 Results Conference Call May 19, 2022 9:00 AM ET Company Participants Wendy Arlin - CFO Sarah Nash - Executive Chair of the Board and Interim CEO Julie Rosen - Brand President Conference Call Participants Ike Boruchow - Wells Fargo Alex Straton - Morgan Stanley Lorraine Hutchinson - Bank of America Grace Menk - Jefferies Simeon Siegel - BMO Capital Markets Jonna Kim - Cowen Matthew Boss - JPMorgan Janet Kloppenburg - JJK Research Associates Operator Good morning. M ...

Workforce and Diversity - As of January 29, 2022, the company employed approximately 56,900 associates, with 48,100 being part-time[38] - Women make up approximately 90% of the workforce and 44% of the Board of Directors[38] - In 2021, 89% of associates participated in an engagement survey, achieving an 85% favorable engagement rate[42] - The company hosted 70 virtual events with approximately 10,000 attendees during fiscal year 2021[39] - The company received a perfect score of 100% on the Human Rights Campaign's Corporate Equality Index for the fifth consecutive year[39] - The company offers 14 weeks of paid maternity leave and six weeks of paid paternity leave[40] - The company expanded mental health benefits to include both full-time and ongoing/non-seasonal part-time associates and their dependents in 2021[41] - The company is committed to equal opportunity and treatment for all associates, conducting periodic assessments of pay equity based on gender, race, and ethnicity[39] - The company has Inclusion Resource Groups for various demographics, enhancing workplace inclusivity[39] Business Operations and Challenges - The COVID-19 pandemic has adversely affected the company's business and results of operations, with reduced consumer confidence impacting store traffic and supply chain disruptions due to labor shortages and transportation issues[55] - The company experienced significant seasonal fluctuations in net sales and operating income, with a substantial portion typically realized during the fourth quarter holiday season[56] - The separation of Bath & Body Works and Victoria's Secret businesses has made the company smaller and less diversified, increasing vulnerability to market changes and potentially impacting financial performance[57] - The company relies heavily on information technology systems provided by Victoria's Secret & Co., and any inadequacies or interruptions during the transition could adversely affect operations[60] - The company faces challenges in attracting and retaining qualified associates, which could delay new store openings and increase labor-related costs[62] - The company’s net sales are sensitive to economic conditions, consumer spending patterns, and external factors such as political instability and health hazards[54] - Future growth is dependent on the ability to open new stores and remodel existing ones, with risks associated with site selection and integration into operations[66] - International expansion plans carry risks including unfamiliarity with local markets and potential competition, which could disrupt operations and increase costs[68] Financial Performance - Net sales for the fiscal year ended January 29, 2022, were $7,882 million, an increase of 22.6% compared to $6,434 million in 2020[242] - Gross profit for the same period was $3,855 million, representing a gross margin of approximately 48.9%[242] - Operating income increased to $2,009 million, up 25.3% from $1,604 million in 2020[242] - Net income from continuing operations was $1,075 million, a 24.3% increase from $865 million in the previous year[242] - The company reported a net income of $1,333 million for the fiscal year, compared to $844 million in 2020[242] - Basic earnings per share from continuing operations rose to $4.00, up from $3.11 in 2020[242] Debt and Financial Obligations - The company has substantial indebtedness, and failure to comply with covenants could result in an event of default, impacting financial condition[98] - The transition from LIBOR to SOFR may affect interest rates on borrowings under the asset-backed revolving credit facility, with potential implications for future debt servicing costs[101] - As of January 29, 2022, the principal value of the company's outstanding publicly traded debt was $4,915 million, with an estimated fair value of $5,493 million[219] - The company has a total of $4.298 billion in long-term debt maturing thereafter 2026[325] Compliance and Regulatory Risks - The company is subject to various laws and regulations regarding data privacy and security, which could adversely affect its reputation and financial condition[102] - The California Consumer Privacy Act (CCPA) went into effect on January 1, 2020, requiring companies to provide new disclosures and data protection rights to California consumers[102] - The California Privacy Rights Act (CPRA), effective January 1, 2023, imposes additional obligations on companies and expands rights for California residents regarding sensitive personal information[102] - The company faces significant costs related to compliance with evolving data privacy laws, which may increase over time and impact its operations[103] Market and Competitive Environment - The retail industry is highly competitive, with the company competing against various retailers, including online channels[78] - The company’s operations are susceptible to local and regional disruptions due to geographic concentration of vendor and distribution facilities[84] - The company may incur significant tax liabilities related to the spin-off of Victoria's Secret & Co., which could impact financial condition[59] Environmental and Operational Risks - The company may face increased costs and operational risks due to climate change and related environmental issues[75] - The company relies on third-party vendors for product sourcing, which exposes it to risks such as production delays and quality issues that could disrupt merchandise deliveries[86] - The company is exposed to foreign currency exchange rate risks, which could materially affect its results of operations and financial condition[87] Strategic Initiatives - Future strategies include continued market expansion and potential new product development to drive growth[242] - The company has established an ESG function to coordinate environmental, social, and governance initiatives, which may influence its reputation and brand value[74]

Bath & Body Works, Inc. (NYSE:BBWI) Q4 2021 Earnings Conference Call February 24, 2022 9:00 AM ET Company Participants Wendy Arlin - CFO Andrew Meslow - CEO Amie Preston - SVP of IR Sarah Nash - Executive Chair Conference Call Participants Roxanne Meyer - MKM Partners Stephanie Wissink - Jefferies Simeon Siegel - BMO Capital Markets Kimberly Greenberger - Morgan Stanley Ike Boruchow - Wells Fargo Lorraine Hutchinson - Bank of America Mark Altschwager - Baird Matthew Boss - JPMorgan Jay Sole - UBS Omar Saad ...