Bath & Body Works Surpasses Q3 Estimates, Raises 2025 Outlook

Bath & Body Works exceeded Wall Street expectations for its fiscal third-quarter performance, showcasing resilient demand for its products and raising its outlook for the year ahead.

The company reported net income of $106 million, or 49 cents per share, surpassing analysts’ forecast of 46 cents, according to Zacks Investment Research.

This marked a slight decrease from the $119 million, or 52 cents per share, reported in the same quarter last year, which had been bolstered by a $12 million pretax gain from early debt repayment.

Revenue climbed to $1.61 billion, up 3 percent from $1.56 billion a year ago, beating Wall Street’s projection of $1.58 billion.

Welcome Boosts From Netflix Partnerships

Bath & Body Works CEO Gina Boswell credited the company’s adaptability and U.S. supply chain for its strong results in a volatile retail environment.

“We are capitalizing on our agile business model and predominantly U.S.-based supply chain,” Boswell said in a company statement. “As we enter the critical holiday period, I am pleased with our strong execution and the momentum we are building, as we drive towards sustainable, long-term profitable growth.”

The retailer’s strategy to refresh its core product categories has been instrumental in boosting sales. Neil Saunders, managing director at GlobalData, pointed to the company’s focus on innovation and targeted collaborations, such as its Netflix-driven Emily in Paris and Stranger Things limited-time collections, which drove consumer interest.

“One of the areas where Bath & Body Works has excelled is in trying to reinvigorate its core product categories,” Saunders said. “There has been a significant amount of innovation around scents, product design, and in-store displays to capture consumer imaginations and drive volume.”

Building a Strong Digital Presence

Digital sales were another strong point, as the company continued to expand its e-commerce platform. According to Investopedia, Bath & Body Works has been enhancing its omnichannel strategy, leveraging online and in-store shopping trends to maximize sales during key periods.

Loyalty program membership increased by 4 percent, totaling 38 million members. Revenue is now expected to decline from 1.7 percent to 2.5 percent, compared to earlier estimates of a 2 percent to 4 percent drop.

Adjusted free cash flow for the year is anticipated to land from $675 million to $775 million, and analysts surveyed by FactSet expect full-year earnings to reach $3.20 per share.

What Bath & Body Works’ Success Means for the Future

Bath & Body Works recently opened its 500th international store in London and there are 1,850 stores across the U.S. since its split from parent company L Brands in 2021, when the company separated from Victoria’s Secret into two publicly traded companies.

Shares surged more than 19 percent in pre-market trading after its latest announcement, reflecting optimism about the company’s growth trajectory.

Boswell emphasized the importance of strategic investments, noting the company’s commitment to long-term growth despite near-term challenges: “As we head into the holiday season, our focus remains on delivering exceptional products and experiences to our customers.”

This article includes reporting from the Associated Press.