Does Bath & Body Works' (BBWI) Buyback and Guidance Shift Reveal a Turning Point in Strategy?

• Bath & Body Works recently reported its second-quarter 2025 results, showing sales of US$1,549 million and net income of US$64 million, while also completing a significant share buyback of over four million shares between May and August 2025.
• The company's updated earnings guidance for full-year 2025 now expects lower diluted earnings per share compared to 2024, accompanied by a slightly narrowed sales growth outlook.
• We'll explore how Bath & Body Works' earnings guidance revision and completed buyback reflect on its investment narrative and growth prospects.

Find companies with promising cash flow potential yet trading below their fair value.

Bath & Body Works Investment Narrative Recap

To be a Bath & Body Works shareholder today, you need to believe in the brand's ability to deliver consistent sales and earnings growth despite increased competition and recent margin pressures. The recent earnings guidance revision and share buyback update do not materially alter the company's core short-term catalyst, strengthening digital and omnichannel channels, or the ongoing risk that Bath & Body Works struggles to win new, younger customers fast enough to offset margin headwinds and rising costs. The updated full-year 2025 guidance, which now expects slightly lower diluted earnings per share and a narrower sales range, is particularly relevant in the context of slower new customer acquisition and ongoing expense pressures; this announcement underscores a cautious outlook even as revenue growth continues modestly. On the other hand, investors should be aware that persistent challenges in attracting new consumers could...

Read the full narrative on Bath & Body Works (it's free!)

Bath & Body Works' narrative projects $8.1 billion revenue and $860.7 million earnings by 2028. This requires 3.1% yearly revenue growth and an earnings increase of $132.7 million from $728.0 million.

Uncover how Bath & Body Works' forecasts yield a $40.73 fair value, a 45% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members offered nine different fair value estimates for Bath & Body Works, ranging from US$30.70 to US$70. This diversity of views comes as management narrows its revenue growth outlook amid digital underperformance, highlighting why it pays to consider multiple perspectives on the company's future.

Explore 9 other fair value estimates on Bath & Body Works - why the stock might be worth just $30.70!

Build Your Own Bath & Body Works Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Bath & Body Works research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Bath & Body Works research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Bath & Body Works' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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