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]