Retail investors focus on who is buying certain stocks every quarter, as institutional holdings and investors are reported in that same cadence. However, there is a different way to look at buying activity, one that is much more powerful if it meets all the right criteria. This is through insider buying or corporate or management stock buyback programs. Understanding the importance of stock buybacks, when done right, can lead investors to align with the companies that pose some of the best risk-to-reward se ...

I am an avid investor with a major focus on small cap companies with experience in investing in US, Canadian, and European markets. My investment philosophy to generating great returns on the stock market revolves around identifying mispriced securities by understanding the drivers behind a company's financials, and ultimately, most often revealed by a DCF model valuation. This methodology doesn't limit an investor into rigid traditional value, dividend, or growth investing, but rather accounts for all of a ...

Core Insights - Bath & Body Works (BBWI) reported fourth-quarter fiscal 2024 results with revenues and earnings surpassing Zacks Consensus Estimates, although revenues declined year over year [1][2][3] Financial Performance - Adjusted earnings per share for the fourth quarter were $2.09, beating the Zacks Consensus Estimate of $2.04, and increased by 1.5% from $2.06 in the same quarter last year [3] - Revenues decreased by 4.3% year over year to $2,788 million, exceeding the Zacks Consensus Estimate of $2,772 million, impacted by a shifted fiscal calendar [4] - U.S. and Canada store revenues fell by 2.4% to $2.11 billion, surpassing the consensus estimate of $2.07 billion, while direct revenues tumbled 9.4% to $595 million, missing the estimate [5] Operational Metrics - Gross profit decreased by 2.7% year over year to $1.30 billion, but gross margin expanded by 80 basis points to 46.7% due to cost savings and distribution productivity [7] - Operating income was reported at $678 million, down 2.6% from the previous year, with an operating margin increase of 40 basis points to 24.3% [8] Store and Market Presence - The company ended the quarter with 1,895 stores, including 1,782 in the U.S. and 113 in Canada, having opened 106 stores and closed 61 during fiscal 2024 [9] Financial Health - Cash and cash equivalents stood at $674 million, with long-term debt of $3.88 billion and long-term operating lease liabilities of $883 million [12] Fiscal 2025 Outlook - For fiscal 2025, net sales growth is projected between 1% and 3%, with North American square footage expanding by 2-3% and international net sales expected to return to growth [13] - The gross margin is anticipated at 44%, with SG&A expenses expected to be 27% [14] - Full-year earnings per share are projected to be between $3.25 and $3.60, with adjusted earnings expected at $3.29 [15] - Free cash flow is projected between $750 million and $850 million, with an annual dividend of 80 cents per share and $300 million planned for share repurchases [16] Q1 Guidance - For the first quarter of fiscal 2025, net sales growth is expected between 1% and 3%, with international retail sales increasing in the high-single digits [17] - Earnings per share for the first quarter are anticipated to be between 36 and 43 cents, compared to 38 cents in the same quarter of fiscal 2024 [18]

Key TakeawaysBath & Body Works warned that tariffs on Chinese goods would negatively affect its full-year results.CEO Gina Boswell also noted that the retail industry faced "complex challenges."The company's guidance offset better-than-expected fourth-quarter profit and sales. Bath & Body Works (BBWI) shares tumbled 10% Thursday as the personal care and home fragrance retailer warned that new tariffs and soft consumer spending would hurt future results. The company sees full-year earnings per share (EPS) be ...

Financial Data and Key Metrics Changes - In Q4 2024, the company reported net sales of $2.8 billion, a decrease of 4% compared to the prior year, but exceeded guidance [41][12] - Earnings per diluted share were $2.09, surpassing the guidance range of $1.94 to $2.07 [40] - The gross profit rate for Q4 was 46.7%, an increase of 80 basis points year-over-year [43] - Operating income for Q4 was $678 million, representing 24.3% of net sales [45] Business Line Data and Key Metrics Changes - Body care grew low-single digits year-over-year, driven by successful seasonal fragrance launches [17] - Home fragrance performance was slightly down year-over-year, but improved in the second half of 2024 [21][22] - Soaps and sanitizers grew mid-single digits, driven by demand during the quad-demic [23] - Adjacent categories, including men's, hair, lip, and laundry, represented approximately 10% of total business, with significant growth potential [30] Market Data and Key Metrics Changes - International net sales were $84 million, down 10% from the prior year, but expected to return to growth in 2025 [33][49] - System-wide retail sales were up nearly 10% in Q4 on a calendar-adjusted basis, with 20% growth in unaffected areas [33] Company Strategy and Development Direction - The company focuses on three priority areas: accelerating top-line growth, enhancing operational excellence, and deploying strong cash flow for growth and shareholder returns [15][48] - The strategy includes product innovation, marketing, and technology, along with expanding into adjacent categories and international markets [34][29] - The company plans to increase its off-mall store locations to 75% over time, reflecting consumer preferences [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the innovation pipeline and the ability to sustain growth momentum into 2025 [69][68] - The company anticipates net sales growth of 1% to 3% for 2025, with diluted earnings per share expected between $3.25 and $3.60 [38][49] - Management acknowledged the competitive environment and value-seeking customer behavior but remains optimistic about future performance [12][10] Other Important Information - The company achieved approximately $155 million in incremental cost savings through its Fuel for Growth program in 2024, totaling over $300 million in two years [35][36] - The loyalty program grew by 6% year-over-year, with approximately 39 million active members [28][129] - The company plans to invest between $250 million and $270 million in capital expenditures in 2025, focusing on real estate and technology [60] Q&A Session Summary Question: What are the key areas of excitement for 2025? - Management highlighted the innovation pipeline and the positive customer response to collaborations, particularly with Disney [66][69] Question: Can you elaborate on the drivers of revenue growth and traffic acceleration? - Management noted that compelling product offerings and effective marketing strategies have driven traffic and revenue growth [74][78] Question: What assumptions underlie the full-year sales guidance? - Management indicated that the guidance assumes consistent trends with Q4 performance and does not factor in significant macroeconomic improvements [86][87] Question: How do you view the impact of international sales on margins? - Management expects international sales to return to growth, with Q1 having a significant impact on both top line and margin due to timing [110] Question: What is the expected growth for adjacent categories in 2025? - Management anticipates that adjacent categories will become a larger percentage of total sales, with a focus on men's products [117] Question: How does the company plan to manage cost savings going forward? - Management plans to continue seeking efficiencies and cost savings while maintaining customer experience [133]

Core Insights - Bath & Body Works (BBWI) reported revenue of $2.79 billion for the quarter ended January 2025, a year-over-year decline of 4.3% [1] - The company's EPS for the same period was $2.09, slightly up from $2.06 a year ago, with an EPS surprise of +2.45% compared to the consensus estimate of $2.04 [1] Financial Performance - The reported revenue exceeded the Zacks Consensus Estimate of $2.77 billion, resulting in a surprise of +0.57% [1] - Year-over-year changes in key metrics provide better insights into the company's underlying performance, which is crucial for projecting stock price performance [2] Stock Performance - Bath & Body Works shares have returned +9.3% over the past month, outperforming the Zacks S&P 500 composite, which declined by -2.2% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for near-term outperformance against the broader market [3] Store Metrics - Total company-operated stores reached 1,895, slightly above the five-analyst average estimate of 1,893 [4] - Geographic net sales in the U.S. and Canada were $2.11 billion, exceeding the average estimate of $2.07 billion, but reflecting a -2.5% change year-over-year [4] - International geographic net sales were reported at $84 million, below the average estimate of $87.21 million, marking a -10.6% change year-over-year [4]

Core Insights - Bath & Body Works (BBWI) reported quarterly earnings of $2.09 per share, exceeding the Zacks Consensus Estimate of $2.04 per share, and showing a slight decrease from $2.06 per share a year ago [1] - The company achieved revenues of $2.79 billion for the quarter ended January 2025, surpassing the Zacks Consensus Estimate by 0.57%, but down from $2.91 billion year-over-year [3] - The stock has gained approximately 6% since the beginning of the year, outperforming the S&P 500's gain of 1.3% [4] Earnings Performance - The earnings surprise for the recent quarter was 2.45%, following a previous surprise of 6.52% when earnings were $0.49 per share against an expectation of $0.46 [2] - Over the last four quarters, Bath & Body Works has consistently surpassed consensus EPS estimates [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $1.42 billion, and for the current fiscal year, it is $3.66 on revenues of $7.5 billion [8] - The estimate revisions trend for Bath & Body Works is favorable, leading to a Zacks Rank 2 (Buy), indicating expected outperformance in the near future [7] Industry Context - Bath & Body Works operates within the Zacks Retail - Miscellaneous industry, which is currently ranked in the top 12% of over 250 Zacks industries [9] - The performance of Bath & Body Works may be influenced by the overall industry outlook, as top-ranked industries tend to outperform lower-ranked ones significantly [9]

Financial Performance - Fourth quarter 2024 net sales were $2,788 million, a decrease of 4.3% from $2,912 million in the fourth quarter of 2023[3] - Fourth quarter 2024 earnings per diluted share were $2.09, down from $2.55 in the same quarter last year[4] - Full-year 2024 net sales decreased 1.6% to $7,307 million compared to $7,429 million in 2023[6] - Full-year 2024 earnings per diluted share were $3.61, compared to $3.84 in 2023[7] - Net income for the full year 2024 was $798 million, down from $878 million in 2023, representing a decrease of 9.1%[25] - The company reported a net cash provided by operating activities of $886 million for 2024, down from $954 million in 2023, a decline of 7.1%[25] Future Projections - The company expects 2025 net sales growth of 1% to 3% compared to $7,307 million in 2024[12] - Full-year 2025 earnings per diluted share is projected to be between $3.25 and $3.60[12] - First quarter 2025 net sales are expected to grow between 1% to 3% compared to $1,384 million in the first quarter of 2024[13] - The company anticipates generating free cash flow of $750 to $850 million in fiscal 2025[12] - Forecasted free cash flow for 2025 is estimated to be between $750 million and $850 million[29] Share Repurchase and Equity - The company repurchased 10.4 million shares for $400 million in fiscal 2024[7] - A new $500 million share repurchase program has been authorized by the Board of Directors[8] - The company repurchased $401 million of common stock in 2024, compared to $148 million in 2023, an increase of 170.3%[25] - Total equity (deficit) improved from $(1,626) million in 2024 to $(1,383) million in 2025, a positive change of approximately 15%[23] Operational Metrics - Total assets decreased from $5,463 million in 2024 to $4,872 million in 2025, a decline of approximately 10.8%[23] - The total number of company-operated stores increased from 1,850 in 2024 to 1,895 in 2025, reflecting a net increase of 45 stores[39] - The debt leverage ratio improved from 2.8 in 2023 to 2.5 in 2024, indicating a stronger capital structure[27] - Direct sales in the U.S. and Canada decreased by 9.4% in the fourth quarter of 2024, totaling $595 million compared to $656 million in the same quarter of 2023[37]

Core Insights - Bath & Body Works, Inc. reported strong performance in the fourth quarter of fiscal 2024, exceeding expectations on both revenue and earnings, driven by product innovation and enhanced customer experience [2][11] - The company experienced a decrease in net sales and earnings per diluted share compared to the previous year, attributed to a shift in the fiscal calendar [3][4][6] Fourth Quarter 2024 Results - Net sales for the fourth quarter were $2,788 million, a decrease of 4.3% from $2,912 million in the previous year [3][44] - Earnings per diluted share were $2.09, down from $2.55 in the prior year [4][32] - Operating income was reported at $678 million, compared to $696 million last year [4][22] - Net income decreased to $453 million from $579 million in the previous year [4][22] Full-Year 2024 Results - Full-year net sales decreased by 1.6% to $7,307 million from $7,429 million [6][44] - Earnings per diluted share for the year were $3.61, down from $3.84 in 2023 [7][32] - Full-year operating income was $1,266 million, compared to $1,285 million last year [7][22] - The company repurchased 10.4 million shares for $400 million and reduced long-term debt by $514 million [7] Guidance for 2025 - The company forecasts net sales growth of 1% to 3% for fiscal 2025, with expected earnings per diluted share between $3.25 and $3.60 [13][14] - Anticipated free cash flow for fiscal 2025 is projected to be between $750 million and $850 million [13][34] Share Repurchase Program - The Board of Directors authorized a new share repurchase program of up to $500 million, replacing the previous program [11][15] Store Performance - The total number of company-operated stores increased to 1,895, with 106 new openings and 61 closures [46] - International partner-operated stores also saw an increase, totaling 529 [47]

Core Viewpoint - Bath & Body Works, Inc. reported strong performance in the fourth quarter of fiscal 2024, exceeding expectations on both revenue and earnings, driven by product innovation and enhanced customer experience [2][11]. Fourth Quarter 2024 Results - The company reported net sales of $2,788 million for the fourth quarter, a decrease of 4.3% compared to $2,912 million in the previous year, primarily due to a shift in the fiscal calendar [3][38]. - Earnings per diluted share for the fourth quarter were $2.09, down from $2.55 in the previous year [4][27]. - Operating income for the fourth quarter was $678 million, compared to $696 million last year, while net income decreased to $453 million from $579 million [4][21]. Full-Year 2024 Results - For the full fiscal year 2024, net sales decreased by 1.6% to $7,307 million from $7,429 million in fiscal 2023 [6][38]. - Full-year earnings per diluted share were $3.61, down from $3.84 in the previous year [7][27]. - The company repurchased 10.4 million shares for $400 million and reduced long-term debt by $514 million [7]. Adjusted Financial Information - Adjusted earnings per diluted share for fiscal 2024 were $3.29, compared to $3.27 in the previous year [10][27]. - Adjusted net income for the full year was $729 million, down from $747 million in fiscal 2023 [10][26]. 2025 Guidance - The company forecasts net sales growth of 1% to 3% for fiscal 2025, with expected earnings per diluted share between $3.25 and $3.60 [13][14]. - Anticipated free cash flow for fiscal 2025 is projected to be between $750 million and $850 million [13][28]. Share Repurchase Program - The Board of Directors authorized a new share repurchase program of up to $500 million, replacing the previous authority of approximately $120 million [15]. Store Performance - As of February 1, 2025, the total number of company-operated stores increased to 1,895, with 1,782 in the U.S. and 113 in Canada [40]. - Internationally, the total number of partner-operated stores rose to 529 [41].