Results: Bath & Body Works, Inc. Exceeded Expectations And The Consensus Has Updated Its Estimates

Bath & Body Works, Inc. (NYSE:BBWI) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to US$45.68 in the week after its latest yearly results. Revenues were US$7.4b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.84, an impressive 24% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Bath & Body Works

Taking into account the latest results, Bath & Body Works' 19 analysts currently expect revenues in 2025 to be US$7.42b, approximately in line with the last 12 months. Statutory earnings per share are forecast to decline 15% to US$3.32 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$7.44b and earnings per share (EPS) of US$3.39 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 8.7% to US$50.43, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Bath & Body Works at US$78.00 per share, while the most bearish prices it at US$40.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 0.2% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 12% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.2% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Bath & Body Works to suffer worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Bath & Body Works. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Bath & Body Works going out to 2027, and you can see them free on our platform here..

Even so, be aware that Bath & Body Works is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

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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.