Bath & Body Works(BBWI) - 2025 Q2 - Quarterly Report

Financial Performance - Consolidated Net Sales for Q2 2024 were $1.526 billion, a decrease of $33 million or 2.1% compared to Q2 2023[69] - Operating Income for Q2 2024 was $183 million, down $5 million or 3% from Q2 2023, with an Operating Income rate of 12.0%[69] - Adjusted Net Income for Q2 2024 was $83 million, with Adjusted Net Income Per Diluted Share at $0.37[75] - For year-to-date 2024, total Net Sales decreased by $45 million, or 1.5%, to $2.910 billion compared to year-to-date 2023[86] - Year-to-date 2024 net sales reached $2,767 million, with a gross profit of $1,140 million[113] - Operating income for the year-to-date 2024 was $333 million, while net income stood at $164 million, including a net loss of $5 million from non-Guarantor subsidiaries[113] Cost Management - The company is targeting $280 million in planned annual cost savings, an increase of $30 million from previous expectations, with $130 million expected in fiscal 2024[70] - Total General, Administrative and Store Operating Expenses increased by $9 million to $443 million, with a rate of 29.1% of Net Sales, up from 27.8% in Q2 2023[82] - General, Administrative and Store Operating Expenses increased by $14 million to $863 million, with the rate increasing to 29.6% from 28.7%[88] Sales Performance - Direct Net Sales decreased by $32 million or 9.7% in Q2 2024, primarily due to a decline in fulfilled orders[81] - International Net Sales increased by $3 million or 2.2% in Q2 2024, driven by increased product shipments[81] - Direct Net Sales decreased by $51 million, or 8.4%, primarily due to a decline in fulfilled orders and website traffic[86] Store Operations - The company opened 40 new stores and closed 18, resulting in a total of 1,872 stores as of August 3, 2024[77] Debt and Financing - As of August 3, 2024, the total senior debt with subsidiary guarantee was $3.711 billion, a decrease from $4.115 billion in July 2023[105] - The company repurchased $200 million principal amount of senior notes year-to-date 2024, resulting in a pre-tax loss of $3 million[106] - Net cash used for financing activities for year-to-date 2024 was $560 million, compared to $343 million in year-to-date 2023[99] - The company authorized a new $500 million share repurchase program in January 2024, repurchasing 4,921 thousand shares for $210 million at an average price of $42.72[102] Cash Flow and Liquidity - Net cash provided by operating activities for year-to-date 2024 was $30 million, down from $77 million in year-to-date 2023[96] - Current assets as of August 3, 2024, were $2.013 billion, down from $2.545 billion as of February 3, 2024[112] - Current liabilities decreased to $2.712 billion as of August 3, 2024, from $2.935 billion as of February 3, 2024[112] - The company had $651 million available under the ABL Facility after accounting for $10 million in outstanding letters of credit[108] Tax and Other Income - Interest Expense for year-to-date 2024 was $159 million, down from $175 million in year-to-date 2023[90] - Other Income increased to $61 million for year-to-date 2024, compared to $45 million in year-to-date 2023[91] - The effective tax rate for year-to-date 2024 was 12.1%, compared to 24.7% for year-to-date 2023[92] Accounting and Risk Management - The company is evaluating the impact of recently issued accounting standards on its disclosures, including ASU 2023-07 and ASU 2023-09[114] - The company utilizes derivative financial instruments to manage exposure to market risks, including foreign currency and interest rate risks[116] - The investment portfolio primarily consists of U.S. government obligations and AAA-rated money market funds, with no material risk to principal from interest rate changes[118] - The company maintains cash and cash equivalents with various major financial institutions, monitoring credit exposure to mitigate concentration of credit risk[120] Credit Ratings - The corporate credit ratings as of August 3, 2024, were Ba2 from Moody's and BB from S&P, with a stable outlook[109]