Bath & Body Works (NYSE:BBWI) Shares Gap Up Following Strong Earnings

Key Points

• Bath & Body Works beat quarterly expectations: Adjusted EPS came in at $0.62 versus the $0.24 consensus, while revenue of $1.51 billion slightly exceeded forecasts. Shares opened at $18.26 after previously closing at $17.58.
• Full-year profit guidance was raised to $2.60–$2.80 per share, supported by stronger digital and direct-channel sales, although revenue is still expected to decline 2.5%–4% year over year.
• Near-term risks remain: Third-quarter EPS guidance of $0.07–$0.12 was well below the $0.27 analyst consensus, and second-quarter sales fell 2.3% year over year amid weak store traffic. The company also announced a quarterly dividend of $0.20, equal to a 4.4% yield.

Bath & Body Works, Inc. (NYSE:BBWI - Get Free Report) gapped up before the market opened on Wednesday following a better than expected earnings announcement. The stock had previously closed at $17.58, but opened at $18.26. Bath & Body Works shares last traded at $18.1230, with a volume of 2,822,618 shares traded.

The company reported $0.62 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.24 by $0.38. Bath & Body Works had a negative return on equity of 45.34% and a net margin of 10.03%.The business had revenue of $1.51 billion for the quarter, compared to the consensus estimate of $1.50 billion. During the same quarter in the previous year, the business earned $0.30 earnings per share. Bath & Body Works's quarterly revenue was down 2.3% on a year-over-year basis. Bath & Body Works has set its Q3 2026 guidance at 0.070-0.120 EPS and its FY 2026 guidance at 2.600-2.800 EPS.

Bath & Body Works Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 4th. Stockholders of record on Friday, August 21st will be issued a $0.20 dividend. This represents a $0.80 annualized dividend and a dividend yield of 4.4%. The ex-dividend date of this dividend is Friday, August 21st. Bath & Body Works's dividend payout ratio is presently 22.47%.

Bath & Body Works News Roundup

Here are the key news stories impacting Bath & Body Works this week:

• Positive Sentiment: Adjusted earnings per share were $0.62, well above the $0.24 analyst consensus and up from $0.37 a year earlier. Revenue of approximately $1.51 billion also slightly exceeded expectations. Bath & Body Works Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management raised full-year 2026 adjusted EPS guidance to $2.60-$2.80 from $2.40-$2.65, above the roughly $2.56 consensus. The company also forecast full-year revenue of $7.5-$7.6 billion, higher than the cited $7.0 billion consensus. Bath & Body Works Raises Earnings Outlook on Higher Profit
• Positive Sentiment: Digital and direct-channel sales grew as improvements to the online shopping experience helped offset softer physical-store traffic, suggesting the company’s transformation efforts are gaining traction. Bath & Body Works lifts annual profit forecast
• Neutral Sentiment: The company narrowed its full-year sales outlook to a decline of 4% to 2.5%, indicating that profitability improvements are occurring despite still-challenging top-line trends.
• Negative Sentiment: Third-quarter adjusted EPS guidance of $0.07-$0.12 was substantially below the $0.27 consensus, creating a near-term earnings concern. Second-quarter sales also fell 2.3% year over year, while weak store traffic remains a risk. Bath & Body Works Reports Second Quarter Results
• Negative Sentiment: Unusually heavy put-option buying before earnings signals elevated bearish hedging and could add volatility, though it does not by itself establish the stock’s direction.

Analyst Upgrades and Downgrades

Several analysts have issued reports on BBWI shares. Morgan Stanley reaffirmed an "equal weight" rating and set a $22.00 price target on shares of Bath & Body Works in a research report on Monday, July 6th. The Goldman Sachs Group cut shares of Bath & Body Works from a "neutral" rating to a "sell" rating and dropped their target price for the company from $23.00 to $19.00 in a report on Wednesday, July 8th. Jefferies Financial Group raised their target price on shares of Bath & Body Works from $22.00 to $23.00 and gave the company a "hold" rating in a research note on Tuesday, July 28th. TD Cowen lifted their price target on Bath & Body Works from $20.00 to $25.00 and gave the stock a "buy" rating in a report on Thursday, May 28th. Finally, Telsey Advisory Group lowered their price target on Bath & Body Works from $25.00 to $22.00 and set a "market perform" rating on the stock in a research report on Thursday, May 28th. Four investment analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus price target of $22.57.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the stock. Global Retirement Partners LLC acquired a new position in shares of Bath & Body Works in the fourth quarter valued at approximately $31,000. Activest Wealth Management bought a new stake in Bath & Body Works in the 4th quarter valued at $32,000. Geneos Wealth Management Inc. grew its holdings in Bath & Body Works by 217.7% in the 1st quarter. Geneos Wealth Management Inc. now owns 1,169 shares of the company's stock valued at $35,000 after buying an additional 801 shares in the last quarter. Parallel Advisors LLC increased its position in Bath & Body Works by 42.6% during the 4th quarter. Parallel Advisors LLC now owns 1,897 shares of the company's stock worth $38,000 after buying an additional 567 shares during the period. Finally, Danske Bank A S acquired a new stake in shares of Bath & Body Works during the third quarter worth $39,000. 95.14% of the stock is owned by institutional investors.

Bath & Body Works Price Performance

The stock's 50-day moving average price is $20.39 and its 200-day moving average price is $20.03. The company has a market cap of $3.64 billion, a P/E ratio of 5.07, a PEG ratio of 1.89 and a beta of 1.38.

Bath & Body Works Company Profile

Bath & Body Works, Inc is a leading specialty retailer focused on personal care, home fragrance and complementary products. Through its flagship Bath & Body Works brand, the company offers a diverse assortment of shower gels, lotions, fragrance mists, candles and home fragrance items. Its product portfolio also includes the White Barn Candle Co range of premium scented candles and diffusers. Bath & Body Works serves consumers through a combination of brick-and-mortar stores and e-commerce platforms, delivering seasonal collections, limited-edition releases and signature scent lines.

Founded in 1990 as part of Limited Brands (now L Brands), Bath & Body Works opened its first store in New Albany, Ohio, and quickly expanded across the United States.

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