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Columbus, Ohio-based Bath & Body Works, Inc. (BBWI) operates as a specialty retailer of home fragrance, body care, soaps, and sanitary products. With a market cap of $6.7 billion, the company sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites in the U.S. and Canada, and through franchise, license, and wholesale arrangements internationally.
Companies worth $2 billion or more are generally described as "mid-cap stocks," Bath & Body Works fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the specialty retail industry.
Bath & Body Works touched its 52-week high of $52.99 on Mar. 6 and is now trading 42.4% below that peak. BBWI has declined 25.4% over the past three months, lagging behind the SPDR S&P Retail ETF’s (XRT) 1.3% gains during the same time frame.
Over the longer term, BBWI has dipped 29.3% in 2024 and 7.7% over the past year, substantially underperforming XRT’s 5.7% gains on a YTD basis and 27.6% returns over the past 52 weeks.
To confirm the bearish trend, BBWI has consistently traded below its 50-day moving average since early June and below its 200-day moving average since late June.
Shares of BBWI plummeted 7% and remained in red for the next eight trading sessions after the release of its Q2 earnings on Aug. 28. Although the company reported an improvement in profitability with its net income rising to $152 million compared to year-ago quarter net income of $99 million, its net sales experienced a 4.6% decline to $1.5 billion, falling short of Wall Street’s expectation.
Additionally, Bath & Body Works reduced its full-year revenues and EPS guidance and now expects its 2024 sales to decline by 2% to 4%, and its EPS is expected to be between $3.37 and $3.57, compared to the previous year’s EPS of $3.84. These updates unsettled investor confidence in the stock.
Body & Bath Works’ competitor, Ulta Beauty, Inc. (ULTA), experienced marginal gains over the past year and dipped 17.9% in 2024, outperforming BBWI.
Among the 18 analysts covering the BBWI stock, the consensus rating is a “Moderate Buy.” The mean price target of $41 represents a potential upside of 34.3% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
