Is BBWI’s Downward Guidance a Setback for Its Brand Reinvention and Digital Push?

• Bath & Body Works recently reported third quarter results, showing quarterly sales of US$1.59 billion and net income of US$77 million, both declining from the same period a year prior, while also revising its full-year 2025 guidance to reflect expected low single-digit declines in both sales and earnings per share.
• This update highlights ongoing pressures from weaker consumer sentiment and elevated tariffs, prompting the company to adjust its outlook despite launching early holiday promotions and appointing new creative leadership.
• We'll examine how this downward earnings revision and updated guidance impact Bath & Body Works' long-term digital and brand transformation narrative.

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Bath & Body Works Investment Narrative Recap

To be a shareholder in Bath & Body Works right now, you need to believe that the company can reignite growth through digital innovation and brand revitalization, even as near-term results remain pressured by weak consumer spending and tariff impacts. The latest downward guidance makes it clear that softer sales and higher costs are the primary short-term catalyst and risk, respectively; this revision does meaningfully increase near-term uncertainty over the earnings recovery narrative.

Among recent announcements, the revised full-year 2025 guidance directly connects to the updated risk profile outlined by management, particularly around global tariffs and persistent headwinds affecting both revenue and profitability. This guidance, which now anticipates low single-digit declines in sales and earnings per share, puts additional focus on how effectively management can manage cost pressures and sustain the momentum of its digital and brand initiatives through challenging conditions.

By contrast, what many investors may be missing is the degree to which margin pressure from tariffs could linger into future quarters, especially if...

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

Bath & Body Works' outlook anticipates $8.1 billion in revenue and $860.7 million in earnings by 2028. This forecast implies a 3.1% annual revenue growth rate and an increase in earnings of about $132.7 million from the current $728.0 million.

Uncover how Bath & Body Works' forecasts yield a $36.96 fair value, a 134% upside to its current price.

Exploring Other Perspectives

Nine members of the Simply Wall St Community estimate Bath & Body Works’ fair value between US$30.70 and US$64.56, showing wide-ranging outlooks. With revised guidance highlighting ongoing margin risks, consider how your perspective aligns and see what other investors are forecasting.

Explore 9 other fair value estimates on Bath & Body Works - why the stock might be worth over 4x more than the current price!

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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