BBWI Stock Forecast & Price Target

Bath & Body Works is projected to achieve net sales growth of 1%-3% year-over-year for fiscal 2025, an improvement from the previous consensus of 2.8%, building on last year's sales of $7.307 billion. The company's fourth-quarter gross margin expanded by 80 basis points to 46.7%, surpassing both company guidance and consensus estimates, further supported by an increase in active members to 39 million, driving higher reward redemption rates and purchases. Additionally, the operating margin for the fourth quarter rose to 24.3%, exceeding expectations and showcasing the company’s effective cost management amidst strengthening demand across key product categories.

Bath & Body Works has demonstrated notable weaknesses in its financial performance for fiscal 2024, as evidenced by a significant 9.4% year-over-year decline in direct revenues in the fourth quarter, totaling $595 million. Overall segment sales dropped 2.4% year-over-year, with projections for fiscal year 2025 reflecting a downward adjustment in earnings per share (EPS) estimates from $3.66 to $3.58, aligning below previous consensus expectations. Additionally, international sales continued to struggle, falling 10.1% year-over-year, which indicates broader challenges in expanding beyond its predominantly North American market.