Bath & Body Works Q1 Sales Down 3.2%, EPS Beats, Stock Surges 12.8%
BBWI•Bath & Body Works reported Q1 net sales of $1.4B, down 3.2%, and adjusted EPS of $0.32, both above expectations, as adjusted gross profit rate fell 270 basis points to 42.7%. Shares jumped 12.8% after it reaffirmed full-year net sales guidance of -2.5% to -4.5%.
1. Q1 Financial Results
Bath & Body Works reported net sales of $1.4 billion, down 3.2% year-over-year, with adjusted EPS of $0.32. Adjusted gross profit rate declined by 270 basis points to 42.7%, while adjusted operating income reached $151 million, or 11% of net sales.
2. Market Reaction
Shares of Bath & Body Works surged 12.8% following the stronger-than-expected EPS and revenue figures, reflecting investor confidence in the company’s ability to manage costs and execute strategic initiatives.
3. Guidance and Outlook
The company reaffirmed its full-year 2026 guidance, forecasting net sales to decline between 2.5% and 4.5% and aiming to generate approximately $600 million in free cash flow, while acknowledging ongoing headwinds from elevated energy costs and tariffs.
4. Strategic Initiatives
Management highlighted progress in its consumer-first formula with double-digit AUR and SKU productivity gains, 13 new North American store openings, 17 closures, 9% international sales growth, and sustained Amazon channel expansion targeting younger consumers.
