BBWI Stock Forecast & Price Target

Bath & Body Works has reported a positive outlook for fiscal year 2025, projecting net sales growth between 1% to 3% year-over-year, which slightly exceeds prior consensus estimates. The company demonstrated significant operational efficiency, with a gross margin increase of 80 basis points to 46.7% and an operating margin expansion of 40 basis points to 24.3%, both reflecting stronger performance than anticipated. Additionally, the active membership base grew by 6% year-over-year to 39 million, which is expected to enhance customer engagement and drive sales through increased reward redemption rates.

Bath & Body Works experienced a significant decline in topline revenue, with direct revenues dropping 9.4% year-over-year in the fourth quarter, contributing to an overall segment sales decrease of 2.4% to $2.109 billion, contrasting with previously reported growth metrics. The company also faced challenges in its international markets, with sales falling 10.1% year-over-year, further exacerbating concerns about its limited global footprint, as only 5% of total sales come from these markets. Additionally, the downward revision of fiscal year 2025 earnings per share estimates from $3.66 to $3.58, coupled with a projected quarterly EPS that falls below previous consensus expectations, highlights ongoing financial pressures and cast a negative outlook on the stock.