Earnings Beat: Bath & Body Works, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders of Bath & Body Works, Inc. (NYSE:BBWI) will be pleased this week, given that the stock price is up 17% to US$35.90 following its latest third-quarter results. Bath & Body Works reported US$1.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.49 beat expectations, being 6.6% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Bath & Body Works

Taking into account the latest results, Bath & Body Works' 18 analysts currently expect revenues in 2026 to be US$7.50b, approximately in line with the last 12 months. Statutory earnings per share are expected to descend 15% to US$3.64 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$7.45b and earnings per share (EPS) of US$3.62 in 2026. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of US$44.81, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Bath & Body Works, with the most bullish analyst valuing it at US$69.00 and the most bearish at US$31.37 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2026. Historically, Bath & Body Works' top line has shrunk approximately 5.5% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 4.7% per year. Although Bath & Body Works' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bath & Body Works' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$44.81, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Bath & Body Works analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Bath & Body Works has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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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.