Track market-moving stories before they get noisy

Key Takeaways Five Below plans about 150 net new stores in fiscal 2026 with $230M-$250M in planned capital spending.FIVE is testing new store layouts and integrating Five Beyond into core categories to improve shopping.FIVE expects 6%-8% comparable sales growth and about 14% sales growth at the fiscal 2026 midpoint. Five Below, Inc. (FIVE - Free Report) continues to invest strategically across its business to strengthen its long-term growth prospects. Management remains focused on expanding the company's footprint, enhancing customer engagement and improving operational capabilities. The company believes these initiatives will support sustainable revenue and earnings growth while reinforcing Five Below's position as a leading value retailer.

Store expansion remains a cornerstone of the company's growth strategy. During the first quarter, Five Below opened 49 net new stores, ending the period with 1,970 locations across 46 states. The retailer expects to open approximately 150 net new stores in fiscal 2026, supported by $230-$250 million in capital expenditures that also include investments in technology and infrastructure to support future growth.

The company is also investing to deepen customer engagement through a social-first marketing strategy. By leveraging AI-generated content, creator partnerships and an expanding customer email database, Five Below is enhancing personalization and strengthening customer relationships. These efforts complement its merchandising strategy, which emphasizes trend-right assortments, compelling value and curated product storytelling.

Five Below is strengthening its operating model by simplifying pricing, integrating Five Beyond merchandise into core product categories and testing new store layouts to enhance the shopping experience. Investments in supply chain productivity and distribution center efficiencies are helping improve execution while supporting the company's expanding store network.

Reflecting confidence in these strategic initiatives, Five Below raised its fiscal 2026 outlook. Management expects net sales of $5.40-$5.48 billion, representing approximately 14% growth at the midpoint, with comparable sales growth of 6%-8%. The improved guidance highlights management's confidence that its ongoing investments will continue driving durable growth and long-term shareholder value.

ULTA & BBWI’s Strategic Initiative Picture vs. FIVEUlta Beauty, Inc. (ULTA - Free Report) continues to invest strategically to strengthen its long-term growth platform. Ulta Beauty is expanding its digital capabilities through AI-powered personalization, social commerce, supply chain automation and a new regional distribution center, while also investing in stores, international expansion and new growth businesses. These initiatives are designed to improve guest experience, operational efficiency and profitable growth. Reflecting confidence in its strategy, Ulta Beauty maintained its fiscal 2026 outlook, projecting 6%-7% net sales growth and 2.5%-3.5% comparable sales growth. The company believes these disciplined investments will support long-term value creation and sustained profitable growth.

Bath & Body Works, Inc. (BBWI - Free Report) is investing strategically through its Consumer First Formula, focusing on product innovation, brand modernization, digital acceleration, logistics and fulfillment upgrades and high-return real estate to drive sustainable long-term growth. Bath & Body Works expects to invest approximately $270 million in capital expenditures during fiscal 2026 while continuing to generate about $600 million in free cash flow.

Reflecting confidence in its transformation strategy, Bath & Body Works reaffirmed its fiscal 2026 outlook, projecting net sales to decline by 2.5%-4.5%, as management expects the benefits of its strategic investments to build through the remainder of 2026 and become more meaningful in 2027.

FIVE’s Price Performance, Valuation & EstimatesFIVE shares have rallied 41.6% over the past year against the industry’s decline of 11.2%. 

Image Source: Zacks Investment Research

From a valuation standpoint, Five Below is trading at a trailing 12-month price-to-sales ratio of 2.11X, up from the industry average of 1.54X. It has a Value Score of B.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Five Below’s fiscal 2026 earnings implies year-over-year growth of 35.1%, while the same for fiscal 2027 indicates an uptick of 9.9%. Estimates for fiscal 2026 and 2027 have been revised upward by 5 cents and 10 cents, respectively, over the past seven days.

Image Source: Zacks Investment Research

Five Below currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways Five Below posted nearly $1.3B in Q1 fiscal 2026 sales, up almost 33% year over year.Five Below's comparable sales rose 23%, driven by a 19% gain in transactions and 4% ticket growth.Five Below raised fiscal 2026 sales guidance to $5.4B-$5.48B and projected comparable sales growth of 6%-8%. Five Below, Inc. (FIVE - Free Report) continues to benefit from customers spending more during each store visit, supporting the retailer’s strong sales performance and reinforcing the effectiveness of its merchandising strategy. The value retailer reported net sales of nearly $1.3 billion in the first quarter of fiscal 2026, up almost 33% year over year, fueled by a 23% increase in comparable sales and strong contributions from newly opened stores.

A key driver behind this momentum was the combination of rising customer traffic and higher average ticket sizes. Management noted that comparable sales growth was supported by a 19% increase in transactions and a 4% rise in ticket value, reflecting healthy consumer engagement and the company’s ability to offer compelling products across multiple price points.

Five Below’s merchandising strategy continues to resonate with shoppers. The retailer has expanded its assortment while maintaining a strong value perception, with more than 80% of its products still priced at $5 and below. At the same time, customers have responded positively to higher-priced items that offer strong perceived value, helping increase spending per visit without sacrificing traffic.

The company also benefited from successful trend-driven merchandising and targeted marketing initiatives. Popular categories such as toys, collectibles, candy, beauty and seasonal products attracted shoppers, while social media-driven campaigns helped bring new customers into stores. Management highlighted strong growth in both new and repeat customers, reinforcing the effectiveness of its evolving customer engagement strategy.

Encouraged by its first-quarter performance, Five Below raised its fiscal 2026 outlook. The company now expects fiscal 2026 sales of $5.4 billion to $5.48 billion and comparable sales growth of 6% to 8%. As customers continue to embrace the retailer’s value-focused assortment and spend more per visit, higher ticket growth is expected to remain an important contributor to overall sales momentum.

ULTA & BBWI’s Sales Picture vs. FIVEUlta Beauty, Inc.’s (ULTA - Free Report) sales momentum remained strong in the first quarter of fiscal 2026, supported by broad-based growth across channels and categories. Ulta Beauty’s net sales increased 11.1% year over year to $3.16 billion, while comparable sales rose 5.3%, driven by a 3.7% increase in average ticket and a 1.6% gain in transactions.

Stores and digital operations contributed to growth, with e-commerce delivering mid-teen sales gains. Fragrance, prestige beauty and haircare were among the strongest-performing categories, highlighting healthy consumer demand across the portfolio. Ulta Beauty reported positive contributions from all major categories and channels, underscoring the resilience of its business model and reinforcing confidence in its ability to sustain growth in a dynamic retail environment.

Bath & Body Works, Inc.’s (BBWI - Free Report) sales performance remained challenged in the first quarter of fiscal 2026, though results came in ahead of expectations. The company reported net sales of $1.38 billion, down 3% year over year, as underlying business trends remained pressured and largely consistent with those of recent quarters.

Despite these headwinds, Bath & Body Works is beginning to see encouraging signs from its Consumer First Formula strategy. Soaps & Sanitizers recorded low-single-digit sales growth, while international retail sales increased at a double-digit pace, partially offsetting weakness in Body Care and Home Fragrance. Bath & Body Works noted that investments in product innovation, brand revitalization and marketplace expansion are starting to resonate with consumers, providing early evidence that these initiatives could support a return to sustainable growth over time.

FIVE’s Price Performance, Valuation & EstimatesFIVE shares have rallied 41.1% over the past year against the industry’s decline of 9.6%. 

Image Source: Zacks Investment Research

From a valuation standpoint, Five Below is trading at a trailing 12-month price-to-sales ratio of 2.00X, up from the industry average of 1.62X. It has a Value Score of B.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Five Below’s fiscal 2026 earnings implies year-over-year growth of 34.3%, whereas the same for fiscal 2027 indicates an uptick of 9.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 45 cents and 36 cents, respectively, over the past 30 days.

Image Source: Zacks Investment Research

Five Below currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

It has been about a month since the last earnings report for Bath & Body Works (BBWI - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Bath & Body Works due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.

BBWI Q1 Earnings Top Estimates as Growth Strategy Fuels OptimismBath & Body Works posted first-quarter fiscal 2026 results, wherein the top and bottom lines surpassed the Zacks Consensus Estimate. However, sales and adjusted earnings declined year over year, reflecting persistent pressure from cautious consumer spending, category mix challenges and tariff-related cost inflation. Management noted that underlying business trends remained consistent with the softness seen in recent quarters.

Despite the pressured environment, the company highlighted encouraging progress from its Consumer First Formula strategy, which is designed to drive sustainable long-term growth. The initiative focuses on strengthening hero categories, accelerating disruptive product innovation, modernizing the brand, improving digital and marketplace capabilities, and operating with greater speed and efficiency.

Management stated that early proof points from these efforts are beginning to resonate with consumers and expects momentum to build through the remainder of 2026 and into 2027.

BBWI’s Quarterly Performance: Key Metrics & InsightsBath & Body Works reported adjusted earnings of 32 cents per share in the fiscal first quarter, surpassing the Zacks Consensus Estimate of 29 cents. However, adjusted earnings declined 34.7% from 49 cents in the year-ago quarter.

Net sales declined 3.2% year over year to $1,378 million but exceeded the Zacks Consensus Estimate of $1,370 million. Performance reflected softer demand trends across several categories, partially offset by growth in soaps, sanitizers and international markets.

Net sales for Stores - U.S. and Canada declined 4.3% year over year to $1.06 billion.

Direct - U.S. and Canada net sales slipped 1.5% year over year to $246 million. Management noted that normalized for the free shipping threshold change, stores and digital performed comparably during the first quarter. Buy Online, Pickup In Store represented approximately 20% of the total direct demand.

International and Other net sales increased 9% year over year to $70 million, which includes domestic third-party wholesale revenues. International net sales increased 5%, while system-wide retail sales rose 11% during the quarter.

Within North America, Body Care sales declined in the mid-teens, Home Fragrance sales decreased in the low-single digits, and Soaps & Sanitizers sales increased in the low-single digits.

Sneak Peek Into BBWI’s MarginsAdjusted gross profit declined 9.1% year over year to $588 million. Moreover, the adjusted gross margin contracted 270 basis points to 42.7% from the prior-year period.

The adjusted merchandise margin rate declined 210 basis points year over year due to tariffs, inflation, crude oil impacts of approximately 130 basis points and category mix. However, adjusted average unit retail remained flat year over year.

Adjusted SG&A expenses remained flat year over year at $436 million. However, as a percentage of sales, adjusted SG&A deleveraged 100 basis points to 31.7% due to sales deleverage, investments associated with the Consumer First Formula and inflationary wage pressures. These pressures were partially offset by Fuel for Growth savings initiatives and incremental cost reductions.

Adjusted operating income declined 27.6% year over year to $151 million, while the adjusted operating margin contracted 370 basis points to 11%.

Bath & Body Works’ Store UpdateDuring the fiscal first quarter, Bath & Body Works opened 13 stores and closed 17 stores across North America. Selling square footage totaled 5.48 million square feet at the quarter-end.

Internationally, partners operated 579 stores, including 542 international stores and 37 travel retail locations. International partners opened eight stores and closed two during the quarter, reflecting continued expansion outside North America.

BBWI’s Financial Health SnapshotBath & Body Works ended the fiscal first quarter with cash and cash equivalents of $820 million compared with $636 million in the prior-year period. Long-term debt stood at $3.61 billion versus $3.89 billion last year.

Inventories declined to $782 million from $869 million in the prior-year quarter, reflecting disciplined inventory management.

In the fiscal first quarter, the company generated $244 million in operating cash flow and invested $49 million in capital expenditure. BBWI also redeemed $284 million of January 2027 notes during the quarter and paid out $40 million in dividends.

BBWI’s Q2 GuidanceFor the second quarter of fiscal 2026, the company expects net sales to decline 5-3% from $1.55 billion in the second quarter of fiscal 2025. Management expects the underlying business trend to decline in the low-single-digit percentage. Promotional activity is anticipated to be the same as that reported last year.

International net sales are projected to increase in the low to mid-single-digit range during the quarter. However, management highlighted that the ongoing geopolitical conflict in the Middle East is expected to weigh on international performance.

The gross profit margin for the fiscal second quarter is expected to be 40%. The anticipated margin pressure reflects higher store occupancy costs, deleverage associated with lower sales volumes and continued investments in product transformation initiatives.

The SG&A expense rate is expected to be 31.8%, reflecting sales deleverage, wage inflation, merit increases and continued investments in the Consumer First Formula. These headwinds are expected to be partially offset by savings generated through the company’s Fuel for Growth initiative.

Bath & Body Works expects fiscal second-quarter earnings per share of 20-25 cents, whereas it reported earnings of 30 cents and adjusted earnings of 37 cents in the prior-year quarter.

BBWI Reaffirms FY26 OutlookBath & Body Works reaffirmed all elements of its fiscal 2026 guidance despite continued macroeconomic uncertainty and value-focused consumer behavior. For fiscal 2026, the company expects net sales to decline 4.5-2.5% year over year from the fiscal 2025 reported sales of $7.291 billion. Management noted that the outlook assumes a macroeconomic backdrop similar to fiscal 2025, with consumers continuing to exhibit cautious, value-seeking spending behavior and promotional activity remaining at levels comparable to the prior year.

Underlying business trends are expected to fall 3% for the year. However, management believes that investments in innovation, improved marketing execution and expanded customer touchpoints will begin contributing more meaningfully over time, with stronger benefits anticipated during the back half of fiscal 2026 and into fiscal 2027.

Bath & Body Works expects its fiscal 2026 adjusted gross profit margin to be 42.4%. The company expects buying and occupancy deleverage tied to lower sales volumes, along with merchandise margin pressure from product investments, to weigh on profitability. These pressures are expected to be partially offset by Fuel for Growth initiatives.

Management noted that tariff-related costs, including product cost inflation, are expected to remain roughly neutral to year-over-year earnings for fiscal 2026. The outlook also assumes elevated energy prices throughout the remainder of the year.

The adjusted SG&A expense rate is expected to be 29.2%, reflecting wage inflation, Consumer First Formula investments and sales deleverage, partially offset by savings from the Fuel for Growth initiative. Bath & Body Works continues to target $250 million in cumulative savings over two years under its Fuel for Growth program, with $175 million expected to be realized in fiscal 2026. The savings are expected to be split roughly evenly between gross margin and SG&A benefits.

Bath & Body Works expects fiscal 2026 adjusted earnings per share of $2.40-$2.65, whereas it reported adjusted earnings of $3.21 in fiscal 2025. Earnings are projected between $3.00 and $3.25, whereas it reported EPS of $3.11 in fiscal 2025. The company emphasized that its guidance does not assume any share repurchases or potential tariff refunds during fiscal 2026.

Bath & Body Works expects $270 million in capital expenditure in fiscal 2026, primarily focused on strategic investments tied to product transformation, digital capabilities and operational initiatives.

The company also expects to maintain its annual dividend of 80 cents per share during fiscal 2026 while continuing to prioritize disciplined capital allocation and balance-sheet strength. The free cash flow for fiscal 2026 is projected to be $600 million, providing flexibility to support investments, dividends and debt management initiatives.

Management stated that fiscal 2026 will serve as a foundational investment year as the company works to reposition the business for sustainable, durable long-term growth. The company believes its leadership position in home fragrance, soaps & sanitizers and body care categories, combined with disciplined cost management and consistent free cash flow generation, provides a strong foundation to execute its long-term transformation strategy successfully.

How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.

The consensus estimate has shifted 9.3% due to these changes.

VGM ScoresAt this time, Bath & Body Works has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Bath & Body Works has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Bath & Body Works Inc (NYSE:BBWI) is preparing to launch a curated assortment of products at Ulta Beauty stores and online in July, a move that analysts at Jefferies said could broaden the retailer's distribution and customer discovery opportunities while facing limitations from store overlap and competition.

The partnership is scheduled to begin on July 12 and will bring more than 55 Bath & Body Works stock-keeping units, including select exclusive products such as Juniper Breeze, to more than 600 Ulta locations and Ulta's e-commerce platform. The rollout will cover roughly 40% of Ulta's store base.

Jefferies noted that the Ulta partnership is expected to contribute to Bath & Body Works' fiscal 2026 guidance for approximately $50 million in revenue from new distribution channels, although the firm expects Amazon to remain the larger contributor due to its broader product assortment.

The firm wrote that Bath & Body Works enters Ulta from a position of strength in several categories, citing the company's estimated 22.4% share of the roughly $2 billion U.S. mass fragrance market and a 21.5% share of the approximately $6 billion home air care market, including about 34% of the candle segment.

However, Jefferies wrote that Bath & Body Works will compete against established brands already sold at Ulta, including Sol de Janeiro, Snif, Saltair and Touchland.

The firm added that fragrance remains one of Ulta's strongest categories, posting high-teen comparable sales growth in the first quarter.

Jefferies also highlighted the potential for sales to shift between channels rather than generate entirely new demand. According to the firm's analysis, about 63% of Bath & Body Works stores are located within one mile of an Ulta store in urban areas or within five miles in rural markets. Bath & Body Works has been expanding its off-mall store footprint and aims to increase the proportion of off-mall locations to about 75%, up from roughly 60% currently.

"While the partnership broadens BBWI's discovery funnel, we anticipate much of the impact to be channel shift rather than true customer acquisition," Jefferies wrote.

The Ulta rollout is part of Bath & Body Works' strategy to expand beyond its traditionally company-operated retail model through wholesale partnerships and additional distribution channels. Jefferies wrote that the company is likely to focus on scaling categories and products that perform well at Ulta rather than significantly broadening its assortment in the near term.

For Ulta, the addition of Bath & Body Works products could help strengthen its body care and home fragrance offerings, categories where management has previously identified opportunities for expansion.

The analysts believe that Bath & Body Works' loyal customer base may help support traffic trends following softer growth in Ulta's body care business during the first quarter.

Bath & Body Works shares traded 5% higher on Wednesday afternoon, while Ulta Beauty stock was up almost 4%. 

COLUMBUS, Ohio, June 23, 2026 (GLOBE NEWSWIRE) -- Bath & Body Works today announced a strategic partnership with Ulta Beauty, bringing a curated selection of its most-loved body care and home fragrance products to more than 600 Ulta Beauty stores nationwide and Ulta.com. The collaboration reflects the company’s focus on building the foundation to reposition Bath & Body Works from a specialty retailer into a category-leading global brand. It also marks an important step in its Consumer First Formula, expanding access to the brand in one of the country’s leading beauty discovery destinations.

Beginning July 12, 2026, Ulta Beauty guests can explore a curated selection of Bath & Body Works products across home fragrance and body care. This assortment includes iconic signature scents in fine fragrance mist, body cream, hand soap and more, along with a collection of the brand’s high-quality 3-wick candles and Wallflowers. It also features the return of a nostalgic favorite, Juniper Breeze, available exclusively at Ulta Beauty.

The strategic partnership reflects Bath & Body Works’ broader marketplace strategy: expanding beyond its owned stores and digital channels to meet consumers in the places they already discover, browse and buy beauty, fragrance and self-care products.

As the largest specialty beauty retailer in the U.S. and a leading destination for brand discovery, Ulta Beauty offers access to highly engaged consumers who actively shop across categories, frequently test and explore new products, and seek high-quality, ingredient-led beauty brands. Bath & Body Works designed its assortment with this consumer at the center.

“We’re continuing to expand our reach by bringing the best of Bath & Body Works to fragrance fans at Ulta Beauty,” said Maly Bernstein, Bath & Body Works chief commercial officer. “This strategic partnership introduces our brand to new, highly engaged consumers who love to discover and explore, with a curated selection of thoughtfully crafted scents that showcase our fragrance leadership and expertise.”

Bath & Body Works and Ulta Beauty are emotionally driven brands that combine beauty and self-care to bring joy, inspire confidence, and foster self-expression. Together, they transform everyday routines into meaningful experiences—Bath & Body Works through fragrance and personal care, and Ulta Beauty through expansive, inclusive beauty offerings designed for everyone at any stage of their beauty journey.

At the core, both brands are in the business of creating feel-good moments for all through accessible, fun, and engaging experiences that invite discovery and celebrate self-care.

For Ulta Beauty guests, the launch creates a new way to introduce and experience Bath & Body Works, whether through trial-size fragrance discovery, iconic body care favorites or elevated home fragrance from White Barn.

“Ulta Beauty is built on the power of discovery, and we are thrilled to welcome Bath & Body Works to select stores and Ulta.com as we expand the ways guests experience fragrance, bath, body and self-care,” said Lauren Brindley, chief merchandising and digital officer, Ulta Beauty. “We see a meaningful whitespace opportunity to better serve guests across high-quality home fragrance, hand soaps, lotions and body care, categories that beautifully complement our assortment and meet guests across all ages, stages and price points. Through this strategic partnership, we are bringing Ulta Beauty guests greater access to Bath & Body Works’ most-loved products, with a portion of the assortment exclusive to Ulta Beauty, including the return of Juniper Breeze, one of the brand’s most treasured classic fragrances. This launch expands our assortment into incremental categories our guests are excited to discover and reinforces Ulta Beauty as a destination for accessible, elevated beauty and self-care experiences.”

The launch assortment was curated to encourage discovery, trial and cross category exploration, with a mix of iconic fragrances, Ulta Beauty exclusives, body care favorites and home fragrance products including:

Juniper Breeze (Ulta Beauty Exclusive): Juniper Breeze returns for a limited time as an Ulta Beauty exclusive, with notes of juniper leaves, green apple, fresh woods and dewy musk. The fragrance will be available in fine fragrance mist and ultimate hydration body cream. Mini Fine Fragrance Mist Set (Ulta Beauty Exclusive): Perfect for discovery and trial, this mini set features five iconic and best-selling Bath & Body Works’ fragrances: Japanese Cherry Blossom, In the Stars, Warm Vanilla Sugar, Butterfly and Champagne Toast.White Barn Neutrals candle collection: Made with a premium soy wax base and a rich blend of fragrance oils, the White Barn Neutrals 3-wick candle collection is sophisticated, modern, and thoughtfully designed for a luxurious home fragrance experience. Featuring scents like Sweet Orange & Agave, Pistachio Milk & Honey and Mahogany Coconut offered in sleek, elevated packaging, these indulgent fragrances fit seamlessly into any décor style.
Bath & Body Works has already seen encouraging early results from selective and strategic marketplace expansion, reinforcing demand for the brand in new shopping environments. The Ulta Beauty launch builds on those learnings with a curated assortment, elevated in-store storytelling and a discovery-led consumer experience.

Bath & Body Works will be available to shop in more than 600 Ulta Beauty stores nationwide and Ulta.com starting July 12, 2026.  

See the full product assortment at ulta.com/brand/bath-body-works.

ABOUT BATH & BODY WORKS
Bath & Body Works is a global leader in personal care and home fragrance, driven by the belief that everybody deserves to feel good.

The brand’s beloved and iconic scents are expertly crafted for exceptional performance and a luxury fragrance experience. Formulated with thoughtfully chosen ingredients, Bath & Body Works’ body care products are available in multiple forms including fine fragrance mist, body cream, lotion, eau de parfum, body wash, hand soap, sanitizer and more. The brand’s famous 3-wick candles are made with rich, high quality fragrance oils layered throughout a premium soy wax base, for up to 45 hours of room-filling fragrance.

Consumers can shop Bath & Body Works anytime and anywhere they choose, from welcoming, in-store experiences at more than 1,900 stores in the U.S. and Canada, 500-plus international locations, online at bathandbodyworks.com, on Amazon and at Ulta Beauty.

ABOUT ULTA BEAUTY
Ulta Beauty is the largest specialty beauty retailer in the U.S. and a leading destination for cosmetics, fragrance, skin care, hair care, wellness, and salon services. Since opening its first store in 1990, Ulta Beauty has grown to more than 1,500 stores across the U.S. and redefined beauty retail by bringing together All Things Beauty. All in One Place®. With an expansive product assortment, professional salon services, and its beloved Ulta Beauty Rewards loyalty program, the company delivers seamless, personalized experiences across stores, Ulta.com, and the Ulta Beauty App – where the possibilities are truly beautiful. Ulta Beauty is also expanding its presence internationally through its subsidiary, Space NK, a luxury beauty retailer operating in the U.K. and Ireland, its joint venture in Mexico, and its franchise in the Middle East. For more information, visit www.ulta.com.

MEDIA CONTACT:
Emmy Beach
[email protected]

Key Takeaways BBWI posted 9% growth in international and other net sales to $70 million in Q1'26.BBWI ended Q1 with 579 partner-operated international stores after eight net additions.BBWI expects low-double-digit international retail sales growth for Q2. Bath & Body Works, Inc. (BBWI - Free Report) continues to gain traction internationally, with its global business emerging as an increasingly important contributor to long-term growth. As the company executes its Consumer First Formula strategy, international markets are providing a valuable avenue for expansion, supported by strong brand recognition, growing consumer demand and a scalable franchise model.

The company delivered another solid quarter internationally in first-quarter fiscal 2026. International and other net sales increased 9% year over year to $70 million, while international net sales rose 5%. More notably, system-wide international retail sales climbed 11%, highlighting healthy demand across global markets despite ongoing macroeconomic challenges in certain regions. The performance reinforces the growing relevance of Bath & Body Works outside its core North American business.

The expansion of the company’s international footprint remains a key growth driver. Bath & Body Works ended the quarter with 579 partner-operated international stores, adding eight net new locations during the period. The company’s asset-light franchise model enables rapid expansion with limited capital investment, allowing it to generate attractive returns while leveraging local market expertise and established retail partners.

Management continues to view international markets as a compelling long-term opportunity. Compared with its extensive North American presence, Bath & Body Works remains relatively underpenetrated globally, creating significant runway for store expansion, royalty growth and market share gains. The strength of the brand’s fragrance and personal care portfolio further supports its ability to attract consumers across diverse geographies.

Management expects international retail sales to increase in the low-double-digit rate in the fiscal second quarter, reflecting continued momentum. With expanding global reach, strong franchise partnerships and rising consumer awareness, the international business is poised to play an increasingly meaningful role in Bath & Body Works’ long-term growth story.

BBWI’s Price Performance, Valuation & EstimatesShares of Bath & Body Works have inched up 0.9% in the past six months against the industry’s decline of 17.1%.

Image Source: Zacks Investment Research

From a valuation standpoint, BBWI trades at a forward price-to-earnings ratio of 7.15X, down from the industry’s average of 14.66X. It has a Value Score of A.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Bath & Body Works’ fiscal 2026 earnings implies a year-over-year decline of 18.4%, whereas the same for fiscal 2027 indicates an uptick of 10.9%. Earnings estimates for fiscal 2026 and 2027 have been revised upward by 2 cents and 3 cents, respectively, in the past 30 days.

Image Source: Zacks Investment Research

BBWI currently carries a Zacks Rank #3 (Hold).

Key PicksWe have highlighted three better-ranked stocks in the retail space, namely, Genesco Inc. (GCO - Free Report) , Tapestry, Inc. (TPR - Free Report) and Fossil Group, Inc. (FOSL - Free Report) .

Genesco is a specialty retail and branded company that sells footwear and accessories in retail stores. The company flaunts a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Genesco’s current fiscal-year earnings implies growth of 55.2% from the year-ago actual. GCO delivered a trailing four-quarter average earnings surprise of 3.8%.

Tapestry offers lifestyle products, which include handbags, women’s and men’s accessories, footwear, jewelry, seasonal apparel collections, sunwear, travel bags, fragrance and watches. It currently sports a Zacks Rank of 1.

The Zacks Consensus Estimate for Tapestry’s current fiscal-year earnings and sales suggests growth of 36.3% and 13.8%, respectively, from the year-ago actuals. TPR delivered a trailing four-quarter average earnings surprise of 15.6%.

Fossil Group is involved in designing, marketing and distributing consumer fashion accessories. The company has a Zacks Rank #2 (Buy) at present.

The Zacks Consensus Estimate for Fossil Group’s current financial-year earnings and sales indicates growth of 87.6% and a decline of 4.9%, respectively, from the year-ago actuals.

The upcoming report from Bath & Body Works (BBWI - Free Report) is expected to reveal quarterly earnings of $0.29 per share, indicating a decline of 40.8% compared to the year-ago period. Analysts forecast revenues of $1.36 billion, representing a decline of 4.2% year over year.

The consensus EPS estimate for the quarter has been revised 3.8% higher over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial estimates during this timeframe.

Before a company announces its earnings, it is essential to take into account any changes made to earnings estimates. This is a valuable factor in predicting the potential reactions of investors toward the stock. Empirical research has consistently shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock.

While investors typically rely on consensus earnings and revenue estimates to gauge how the business may have fared during the quarter, examining analysts' projections for some of the company's key metrics often helps gain a deeper insight.

Bearing this in mind, let's now explore the average estimates of specific Bath & Body Works metrics that are commonly monitored and projected by Wall Street analysts.

Analysts expect 'Geographic Net Sales- Stores - U.S. and Canada' to come in at $1.07 billion. The estimate indicates a year-over-year change of -4%.

The consensus among analysts is that 'Geographic Net Sales- International' will reach $68.08 million. The estimate indicates a change of +6.4% from the prior-year quarter.

The average prediction of analysts places 'Geographic Net Sales- Direct - U.S. and Canada' at $228.33 million. The estimate indicates a change of -8.7% from the prior-year quarter.

The consensus estimate for 'Total Company-Operated Stores - Total Bath & Body Works - Total - Stores (EOP)' stands at 1,931 . The estimate compares to the year-ago value of 1,900 .

Based on the collective assessment of analysts, 'Total Company-Operated Stores - Total Bath & Body Works - Canada - Stores (EOP)' should arrive at 113 . The estimate is in contrast to the year-ago figure of 113 .

Analysts predict that the 'Company-operated U.S. Store Data - Average Store Size (selling square feet)' will reach 2.85 million. Compared to the present estimate, the company reported 2.85 million in the same quarter last year.

According to the collective judgment of analysts, 'Company-operated U.S. Store Data - Total Selling Square Feet' should come in at 5.17 million. Compared to the current estimate, the company reported 5.08 million in the same quarter of the previous year.

The combined assessment of analysts suggests that 'Total Company-Operated Stores - Total Bath & Body Works - United States - Stores (EOP)' will likely reach 1,819 . The estimate is in contrast to the year-ago figure of 1,787 .

Analysts forecast 'Total Partner-Operated Stores - Total International - International - Stores (EOP)' to reach 549 . Compared to the current estimate, the company reported 489 in the same quarter of the previous year.

Analysts' assessment points toward 'Total Partner-Operated Stores - Total International - Total - Stores (EOP)' reaching 586 . The estimate compares to the year-ago value of 524 .

The collective assessment of analysts points to an estimated 'Total Partner-Operated Stores - Total International - International - Travel Retail - Stores (EOP)' of 37 . Compared to the current estimate, the company reported 35 in the same quarter of the previous year.

View all Key Company Metrics for Bath & Body Works here>>>

Bath & Body Works shares have witnessed a change of -17.8% in the past month, in contrast to the Zacks S&P 500 composite's +4.6% move. With a Zacks Rank #4 (Sell), BBWI is expected underperform the overall market performance in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Delivers Q1 net sales and adjusted earnings per share results above guidanceFirst quarter net sales of $1.4 billion, down 3%. Earnings per diluted share of $0.90; Adjusted earnings per diluted share of $0.32Reaffirms full-year 2026 guidance of net sales down 4.5% to down 2.5%, earnings per diluted share of $3.00 to $3.25; and adjusted earnings per diluted share of $2.40 to $2.65 Chief Financial Officer Eva Boratto to step down June 12; Company appoints interim CFO with active search in progress COLUMBUS, Ohio, May 27, 2026 (GLOBE NEWSWIRE) -- Bath & Body Works, Inc. (NYSE: BBWI) today reported first quarter 2026 results.

Daniel Heaf, chief executive officer of Bath & Body Works, commented, “Our first-quarter results exceeded guidance, but remain below the standard our brand is capable of delivering. That reality reinforces the urgency with which we are executing the Consumer First Formula. Our efforts to strengthen our hero categories, modernize the brand, and expand our reach are beginning to resonate with consumers, and we are encouraged by the early proof points we are seeing.”

“We believe that the foundation we are building will drive improved performance over time, with the impact expected to build through the balance of 2026 and more meaningfully into 2027, as we position the company to return to sustainable, durable growth.”

First Quarter 2026 Results

The company reported net sales of $1,378 million for the quarter ended May 2, 2026, a decrease of 3% compared to net sales of $1,424 million for the quarter ended May 3, 2025.

Earnings per diluted share were $0.90 for the first quarter of 2026, compared to $0.49 last year. First quarter operating income was $231 million compared to $209 million last year, and net income was $183 million compared to $105 million last year.

Reported first quarter 2026 results included an $88 million pre-tax gain ($66 million after tax), net of legal fees, related to favorable settlements of payment card interchange fee litigation, aggregate pre-tax costs of $8 million ($6 million after tax) associated with business transformation activities, an $8 million pre-tax loss ($6 million after tax) related to the extinguishment of outstanding debt, a $3 million pre-tax gain ($3 million after tax) related to the sale of a non-core asset and a $62 million tax benefit due to the resolution of certain tax matters. Excluding these items, adjusted earnings per diluted share for the first quarter of 2026 was $0.32, adjusted operating income was $151 million and adjusted net income was $65 million.

At the conclusion of this press release is a reconciliation of reported‐to‐adjusted results, including a description of the adjusted items.

2026 Guidance

The company is maintaining its full-year 2026 guidance of net sales to decline between 4.5% to 2.5% compared to $7,291 million in fiscal 2025. The company is also maintaining its full-year 2026 earnings per diluted share guidance of between $3.00 and $3.25 compared to $3.11 in fiscal 2025 and full-year 2026 adjusted earnings per diluted share guidance of between $2.40 and $2.65, compared to adjusted earnings per diluted share of $3.21 in 2025. There are no share repurchases or tariff refunds assumed in our outlook. In fiscal 2026, we expect to generate free cash flow of approximately $600 million.

For the second quarter of 2026, the company is forecasting net sales to decline between 5% to 3% compared to $1,549 million in the second quarter of 2025. Second quarter 2026 earnings per diluted share is expected to be between $0.20 and $0.25, compared to earnings per diluted share of $0.30 and adjusted earnings per diluted share of $0.37 in the second quarter of 2025.

At the conclusion of this press release is a reconciliation of our guidance-to-adjusted guidance, including a description of the adjusted items.

For a reconciliation of our reported GAAP to adjusted non-GAAP earnings per diluted share for fiscal 2025 and the second quarter of 2025, refer to our Annual Report on Form 10-K, filed with the SEC on March 12, 2026, and our Quarterly Report on Form 10-Q, filed with the SEC on August 28, 2025, respectively.

Chief Financial Officer Transition

Chief Financial Officer Eva Boratto will step down from her role effective June 12 to pursue another professional opportunity. The company has initiated a comprehensive search process, supported by a leading executive search firm, to identify its next Chief Financial Officer.

Tom Javitch has been appointed Interim Chief Financial Officer effective upon Boratto’s departure. Javitch has been with Bath & Body Works for more than 16 years and L Brands for 25 years. He has held a number of senior finance leadership roles across the organization, including Executive Vice President of Brand Finance of Bath & Body Works.

Daniel Heaf said, “We are grateful to Eva for her leadership and many contributions to Bath & Body Works during an important period for the company. We thank her for her partnership and wish her continued success in her next chapter. While we search for a successor, I’m confident in Tom Javitch’s interim leadership, deep understanding of Bath & Body Works and expertise across the business—from product to store operations to supply chain.”

Boratto said, “It has been a pleasure to serve on the leadership team at Bath & Body Works, and I would like to thank Daniel, my colleagues in the finance organization, the Board and all of our associates for the support during my time at this remarkable company. I leave with confidence in Daniel’s leadership and the strategy he has put in place, and I look forward to watching as Bath & Body Works continues to regain momentum in the marketplace.”  

Earnings Call and Additional Information

Bath & Body Works, Inc. will conduct its first quarter earnings call at 8:30 a.m. ET on May 27th. To listen, call 877-407-9219 (international dial-in number: 412-652-1274). For an audio replay, call 877-660-6853 (international replay number: 201-612-7415); access code 13760165 or log onto www.BBWInc.com. A slide presentation has been posted on the company’s Investor Relations website that summarizes certain information in the company‘s prepared remarks from the earnings call as well as some additional facts and figures regarding the company’s operating performance and guidance.

ABOUT BATH & BODY WORKS
Bath & Body Works is a global leader in personal care and home fragrance, driven by the belief that everybody deserves to feel good.

The brand’s beloved and iconic scents are expertly crafted for exceptional performance and a luxury fragrance experience. Formulated with thoughtfully chosen ingredients, Bath & Body Works’ body care products are available in multiple forms including fine fragrance mist, body cream, lotion, eau de parfum, body wash, hand soap, sanitizer and more. The brand’s famous 3-wick candles are made with rich, high quality fragrance oils layered throughout a premium soy wax base, for up to 45 hours of room-filling fragrance.

Consumers can shop Bath & Body Works anytime and anywhere they choose, from welcoming, in-store experiences at more than 1,900 stores in the U.S. and Canada, 500-plus international locations, online at bathandbodyworks.com and on Amazon.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this press release or made by our Company or our management involve risks and uncertainties and are subject to change based on various factors, many of which are beyond our control. Accordingly, our future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Words such as “estimate,” “project,” “plan,” “believe,” “expect,” “anticipate,” “intend,” “potential,” “target,” “goal” and any similar expressions may identify forward-looking statements. There are risks, uncertainties and other factors that in some cases have affected and, in the future, could affect our financial performance and actual results and could cause actual results to differ materially from those expressed or implied in any forward-looking statements included in this report or otherwise made by the Company or our management. These factors can be found in Item 1A. Risk Factors in our 2025 Annual Report on Form 10-K and our subsequent filings.

We are not under any obligation and do not intend to make publicly available any update or other revisions to any of the forward-looking statements contained in this press release to reflect circumstances existing after the date of this press release or to reflect the occurrence of future events even if experience or future events make it clear that any expected results expressed or implied by those forward-looking statements will not be realized.

We announce material financial and operational information using our investor relations website, press releases, SEC filings and public conference calls and webcasts. Information about the Company, our business and our results of operations may also be announced by posts on our accounts on social media channels, including the following: Facebook, Instagram, X, LinkedIn, Pinterest, TikTok and YouTube.  The information that we post through these social media channels and on our website may be deemed material. As a result, we encourage investors, the media and others interested in the Company to monitor these social media channels in addition to following our investor relations website, press releases, SEC filings and public conference calls and webcasts. The list of social media channels we use may be updated from time to time on our investor relations website. 

For further information, please contact:

Bath & Body Works, Inc.:
Luke Long
[email protected]

Media Relations
Emmy Beach
[email protected]

BATH & BODY WORKS, INC.
First Quarter 2026 Total Sales (In millions):
  First Quarter  2026  2025 % ChangeStores - U.S. and Canada (a)$1,062 $1,110 (4.3%)Direct - U.S. and Canada 246  250 (1.5%)International and Other (b) 70  64 9.0%Total Bath & Body Works$1,378 $1,424 (3.2%)__________        (a) Results include fulfilled buy online pick up in store orders.(b) Results include royalties associated with franchised stores, as well as international and domestic wholesale sales.  Total Company-operated Stores:

 Stores     Stores 1/31/2026 Opened Closed 5/2/2026United States1,814 13 (17) 1,810Canada113 — —  113Total Bath & Body Works1,927 13 (17) 1,923          Total Partner-operated Stores:

 Stores     Stores 1/31/2026 Opened Closed 5/2/2026International536 8 (2) 542International - Travel Retail37 — —  37Total International (a)573 8 (2) 579__________        (a) Includes store locations only and does not include kiosks, shop-in-shops, gondola or beauty counter locations.  BATH & BODY WORKS, INC.CONSOLIDATED STATEMENTS OF INCOME(Unaudited)(In millions, except per share amounts)     First Quarter  2026   2025 Net Sales$1,378  $1,424 Costs of Goods Sold, Buying and Occupancy (791)  (778)Gross Profit 587   646 General, Administrative and Store Operating Expenses (356)  (437)Operating Income 231   209 Interest Expense (69)  (71)Other Income, Net 4   8 Income Before Income Taxes 166   146 Benefit (Provision) for Income Taxes 17   (41)Net Income$183  $105     Net Income per Diluted Share$0.90  $0.49     Weighted Average Diluted Shares Outstanding 202   215          BATH & BODY WORKS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
(In millions)  May 2,
2026 May 3,
2025ASSETS   Current Assets:   Cash and Cash Equivalents$820  $636 Accounts Receivable, Net 98   103 Inventories 782   869 Easton Assets Held for Sale 81   97 Other 118   115 Total Current Assets 1,899   1,820 Property and Equipment, Net 1,106   1,111 Operating Lease Assets 974   970 Goodwill 628   628 Trade Name 165   165 Deferred Income Taxes 110   133 Other Assets 81   54 Total Assets$4,963  $4,881 LIABILITIES AND EQUITY (DEFICIT)   Current Liabilities:   Accounts Payable$557  $452 Accrued Expenses and Other 513   495 Current Operating Lease Liabilities 206   201 Income Taxes 101   146 Total Current Liabilities 1,377   1,294 Deferred Income Taxes 115   23 Long-term Debt 3,613   3,886 Long-term Operating Lease Liabilities 894   895 Other Long-term Liabilities 95   233 Total Equity (Deficit) (1,131)  (1,450)Total Liabilities and Equity (Deficit)$4,963  $4,881          BATH & BODY WORKS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)  First Quarter  2026   2025 Operating Activities:   Net Income$183  $105 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:   Depreciation of Long-lived Assets 61   64 Share-based Compensation Expense 8   10 Gain on Sale of Non-core Asset (3)  — Loss on Extinguishment of Debt 8   — Tax Benefit from Resolution of Certain Tax Matters (62)  — Changes in Assets and Liabilities:   Accounts Receivable 82   103 Inventories (83)  (134)Accounts Payable, Accrued Expenses and Other 34   14 Income Taxes Payable 29   34 Other Assets and Liabilities (13)  (8)Net Cash Provided by (Used for) Operating Activities 244   188     Investing Activities:   Capital Expenditures (49)  (37)Proceeds from Sale of Non-core Asset 8   — Other Investing Activities (1)  (2)Net Cash Used for Investing Activities (42)  (39)    Financing Activities:   Payments for Long-term Debt (289)  — Repurchases of Common Stock —   (136)Dividends Paid (40)  (43)Tax Payments related to Share-based Awards (3)  (4)Other Financing Activities (3)  (5)Net Cash Used for Financing Activities (335)  (188)    Effects of Exchange Rate Changes on Cash and Cash Equivalents —   1 Net Decrease in Cash and Cash Equivalents (133)  (38)Cash and Cash Equivalents, Beginning of Year 953   674 Cash and Cash Equivalents, End of Period$820  $636          BATH & BODY WORKS, INC.ADJUSTED FINANCIAL INFORMATION(Unaudited)(Dollars in millions, except per share amounts)     First Quarter  2026   2025Reconciliation of Reported Operating Income to Adjusted Operating IncomeReported Operating Income$231  $209Interchange Fee Settlements (88)  —Business Transformation Activities 8   —Adjusted Operating Income$151  $209    Reconciliation of Reported Net Income to Adjusted Net IncomeReported Net Income$183  $105Interchange Fee Settlements (88)  —Business Transformation Activities 8   —Loss on Extinguishment of Debt 8   —Gain on Sale of Non-core Asset (3)  —Tax Effect of Adjustments 19   —Tax Benefit from Resolution of Certain Tax Matters (62)  —Adjusted Net Income$65  $105    Reconciliation of Reported Net Income per Diluted Share to Adjusted Net Income per Diluted ShareReported Net Income per Diluted Share$0.90  $0.49Interchange Fee Settlements (0.43)  —Business Transformation Activities 0.04   —Loss on Extinguishment of Debt 0.04   —Gain on Sale of Non-core Asset (0.02)  —Tax Effect of Adjustments 0.09   —Tax Benefit from Resolution of Certain Tax Matters (0.31)  —Adjusted Net Income per Diluted Share$0.32  $0.49        See Notes to Adjusted Financial Information.

BATH & BODY WORKS, INC.FORECASTED ADJUSTED FINANCIAL INFORMATION(Unaudited)(In millions, except per share amounts)     Full-Year  2026 Reconciliation of Forecasted Net Income Per Diluted Share to Forecasted Adjusted Net Income per Diluted Share Low HighForecasted Net Income per Diluted Share$3.00  $3.25 Interchange Fee Settlements (0.43)  (0.43)Business Transformation Activities 0.04   0.04 Loss on Extinguishment of Debt 0.04   0.04 Gain on Sale of Non-core Asset (0.02)  (0.02)Tax Effect of Adjustments 0.09   0.09 Tax Benefit from Resolution of Certain Tax Matters (0.31)  (0.31)Forecasted Adjusted Net Income Per Diluted Share$2.40  $2.65        Full-YearReconciliation of Forecasted Net Cash Provided by Operating Activities to Forecasted Free Cash Flow  2026 Forecasted Net Cash Provided by Operating Activities  $870 Forecasted Capital Expenditures   (270)Forecasted Free Cash Flow  $600        See Notes to Adjusted Financial Information.

BATH & BODY WORKS, INC.
NOTES TO ADJUSTED FINANCIAL INFORMATION
(Unaudited)

The adjusted financial information should not be construed as an alternative to the results determined in accordance with generally accepted accounting principles. Further, the company’s definitions of adjusted income information may differ from similarly titled measures used by other companies. Management believes that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. While it is not possible to predict future results, management believes the adjusted financial information is useful for the assessment of the operations of the company because the adjusted items are not indicative of the company’s ongoing operations due to their size and nature. Additionally, management uses adjusted financial information as key performance measures for the purpose of evaluating performance internally. The adjusted financial information should be read in conjunction with the company’s historical financial statements and notes thereto contained in the company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

The “Adjusted Financial Information” provided in the attached reflects the following non-GAAP financial measures:

Fiscal 2026

In the first quarter of 2026, adjusted results exclude the following:

An $88 million pre-tax gain ($66 million after tax), included as a reduction to General, Administrative and Store Operating Expenses, related to cash proceeds received, net of legal fees, for favorable settlements of payment card interchange fee litigation;Aggregate pre-tax costs of $8 million ($6 million after tax), primarily included in General, Administrative and Store Operating Expenses, resulting from business transformation activities in connection with the Consumer First Formula;An $8 million pre-tax loss ($6 million after tax), included in Other Income, Net, related to the repurchase and early extinguishment of outstanding debt;A $3 million pre-tax gain ($3 million after tax), included in Other Income, Net, related to the sale of a non-core asset; andA $62 million tax benefit associated with the resolution of certain tax matters.
Full-year 2026 Forecasted Adjusted Net Income per Diluted Share excludes the adjustments referenced above.

Fiscal 2025

There were no adjustments to results in the first quarter of 2025.

Forecasted Free Cash Flow

Our Forecasted Free Cash Flow is defined as Forecasted Net Cash Provided by Operating Activities less our Forecasted Capital Expenditures. Our Forecasted Free Cash Flow is a non-GAAP financial measure which we believe is useful to analyze our anticipated ability to generate cash. Our Forecasted Free Cash Flow calculation may not be comparable to similarly-titled measures reported by other companies. Our Forecasted Free Cash Flow should be evaluated in addition to, and not considered a substitute for, other GAAP financial measures.

Bath & Body Works (BBWI - Free Report) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.29 per share. This compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of +10.80%. A quarter ago, it was expected that this owner of Victoria's Secret, Bath & Body Works and other chain stores would post earnings of $1.77 per share when it actually produced earnings of $2.05, delivering a surprise of +15.82%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Bath & Body Works, which belongs to the Zacks Retail - Miscellaneous industry, posted revenues of $1.38 billion for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 1.01%. This compares to year-ago revenues of $1.42 billion. The company has topped consensus revenue estimates two times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Bath & Body Works shares have lost about 11.7% since the beginning of the year versus the S&P 500's gain of 9.8%.

What's Next for Bath & Body Works?While Bath & Body Works has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Bath & Body Works was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.22 on $1.49 billion in revenues for the coming quarter and $2.61 on $7.09 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Retail - Miscellaneous is currently in the bottom 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Another stock from the same industry, Build-A-Bear (BBW - Free Report) , has yet to report results for the quarter ended April 2026. The results are expected to be released on May 28.

This toy retailer is expected to post quarterly earnings of $0.76 per share in its upcoming report, which represents a year-over-year change of -35%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Build-A-Bear's revenues are expected to be $130.11 million, up 1.3% from the year-ago quarter.

Bath & Body Works, Inc. just reported its Q1, and the results came in ahead of expectations. The struggling personal-care retailer is in the midst of an operational turnaround in an effort to return the business to growth. Today's BBWI results show progress, though there is clearly still a journey ahead.

For the quarter ended April 2026, Bath & Body Works (BBWI - Free Report) reported revenue of $1.38 billion, down 3.2% over the same period last year. EPS came in at $0.32, compared to $0.49 in the year-ago quarter.

The reported revenue represents a surprise of +1.01% over the Zacks Consensus Estimate of $1.36 billion. With the consensus EPS estimate being $0.29, the EPS surprise was +10.8%.

While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.

As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.

Here is how Bath & Body Works performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:

Total Company-Operated Stores - Total Bath & Body Works - Total - Stores (EOP): 1,923 compared to the 1,931 average estimate based on four analysts.Total Company-Operated Stores - Total Bath & Body Works - United States - Stores (EOP): 1,810 versus the three-analyst average estimate of 1,819.Total Company-Operated Stores - Total Bath & Body Works - Canada - Stores (EOP): 113 versus the three-analyst average estimate of 113.Total Partner-Operated Stores - Total International - International - Travel Retail - Stores (EOP): 37 compared to the 37 average estimate based on two analysts.Total Partner-Operated Stores - Total International - Total - Stores (EOP): 579 compared to the 586 average estimate based on two analysts.Total Partner-Operated Stores - Total International - International - Stores (EOP): 542 versus the two-analyst average estimate of 549.Geographic Net Sales- Stores - U.S. and Canada: $1.06 billion compared to the $1.07 billion average estimate based on three analysts. The reported number represents a change of -4.3% year over year.Geographic Net Sales- International: $70 million versus $68.08 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +9.4% change.Geographic Net Sales- Direct - U.S. and Canada: $246 million compared to the $228.33 million average estimate based on three analysts. The reported number represents a change of -1.6% year over year.View all Key Company Metrics for Bath & Body Works here>>>

Shares of Bath & Body Works have returned -7.9% over the past month versus the Zacks S&P 500 composite's +5.1% change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.

Bath & Body Works Inc (NYSE:BBWI) jumped 12.8% in Wednesday morning trading after the retailer posted first-quarter results above both its own guidance and Wall Street estimates, while reaffirming its full-year outlook, easing concerns about the trajectory of the business.

Adjusted EPS of $0.32 beat consensus of $0.29 and topped the guided range of $0.24 to $0.30. Net sales of $1.38 billion, down 3.2% year-over-year, came in ahead of the $1.36 billion consensus and the company's guided range of down 4% to 6%. Adjusted operating income of $151 million significantly topped estimates of $141 million.

The company reaffirmed full-year 2026 guidance for net sales down 4.5% to 2.5%, adjusted EPS of $2.40 to $2.65, and free cash flow of approximately $600 million.

For Q2, it guided net sales down 5% to 3% and adjusted EPS of $0.20 to $0.25, with the midpoint coming in ahead of the $0.21 consensus.

CEO Daniel Heaf said the results exceeded guidance but remained below the standard the brand is capable of delivering. "That reality reinforces the urgency with which we are executing the Consumer First Formula," he said. "Our efforts to strengthen our hero categories, modernize the brand, and expand our reach are beginning to resonate with consumers."

By segment, US and Canada store sales fell 4% year-over-year, international rose 9%, and e-commerce declined 2%.

Jefferies called the quarter a beat on both sales and earnings and said it would be listening on the call for updates on strategic initiatives, the $250 million cost savings plan, and early reads on the company's Amazon launch.

Bath & Body Works also said CFO Eva Boratto will step down on June 12 to pursue another opportunity. Tom Javitch, who has more than 16 years at the company, has been named interim CFO while a permanent search gets underway.

Shares of Bath & Body Works (BBWI +3.86%) rebounded on Wednesday after the purveyor of personal care and home fragrance products reported higher-than-expected profits.

Image source: Getty Images.

Strengthening the foundation Bath & Body Works' net sales declined 3% year over year to $1.4 billion in its fiscal first quarter, which ended on May 2.

The specialty retailer closed 17 underperforming company-operated stores in the U.S. during the quarter and opened 13 new locations. That brought its total company-operated store count to 1,923.

During the same time, Bath & Body Works opened eight partner-operated stores in international markets and closed two, bringing its total to 579.

Today's Change

(

3.86

%) $

0.70

Current Price

$

18.82

All told, Bath & Body Works generated $195 million in free cash flow, up from $151 million in the year-ago period.

"We are simplifying the business, removing unnecessary complexity, and reallocating resources toward the areas that most directly impact the consumer," CEO Daniel Heaf said during a conference call with analysts. "These efforts are helping fund investment in product innovation, brand relevance, and digital acceleration while maintaining a strong financial foundation."

Value territory Looking ahead, management reaffirmed its full-year free cash flow target of about $600 million in fiscal 2026.

"We believe that the foundation we are building will drive improved performance over time, with the impact expected to build through the balance of 2026 and more meaningfully into 2027, as we position the company to return to sustainable, durable growth," Heaf said.

Even after today's gains, if Bath & Body Works can return to growth, its current price to forecasted free cash flow of roughly 6.5 could prove to be a bargain.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Bath & Body Works Inc. NYSE: BBWI posted another quarter of declining sales in its Q1 2026 earnings report—and investors cheered anyway.

Bath & Body Works Today

BBWI

Bath & Body Works

$18.78 +0.66 (+3.64%)

As of 06/11/2026 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$14.27▼

$33.96Dividend Yield4.26%

P/E Ratio5.28

Price Target$21.93

The cheers came courtesy of a double beat and the fact that the company maintained its full-year guidance. BBWI surged over 16% in early trading after the report, closing the day up about 10%. That price action came on about twice the stock’s normal volume.

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Bath & Body Works earnings report was more of the same story that’s been viewed skeptically by investors.

That is, declining year-over-year revenue, particularly in same-store sales. But, as the post-earnings lift in BBWI seems to show, it's likely that the worst is already priced in.

Why Bath & Body Works Is Winning in the MarketplaceIf investors want to be cautious about Bath & Body Works earnings report, here’s the data point to consider. In the quarter, the company generated 77% of its revenue from in-store sales in the United States and Canada. That includes buy-online-pick-up-in-store (BOPIS). Specifically, that meant $1.1 billion. However, the number was down 4.3% year over year.

The news was only slightly better regarding online sales. The company reported $246 million in revenue from that channel. That was “only” down about 1.5% year-over-year.

It’s important to understand how BOPIS figures into these channels. BOPIS represents about 20% of total online sales. However, these are recorded as store net sales.

BOPIS is core to the company’s "Win in the Marketplace" pillar—making Bath & Body Works accessible "anytime and anywhere." The fact that approximately 20% of digital demand is fulfilled in-store also drives store traffic, reduces shipping costs, and can prompt incremental in-store purchases.

Support for that thesis came when management normalized for a free shipping threshold change. During the quarter, Bath & Body Works lowered its minimum from $100 to $50—digital and store channels performed comparably, suggesting the underlying omnichannel strategy is gaining traction.

The Amazon Effect Makes the Rally SustainableThe third bucket in which Bath & Body Works attributes revenue is labeled International and Other. The category only accounted for $70 million in revenue, but that was up 9% YOY. A big reason for that is the company’s new partnership with Amazon.com Inc. NASDAQ: AMZN that launched in February 2026.

Consumers can now order BBWI products on Amazon.com. Bath & Body Works records only the wholesale revenue (what Amazon pays them), not the full retail price the consumer pays. That's why CFO Boratto noted they "do not record full retail sales as revenue." This is the same accounting model the company would use selling into a retailer like Ulta Beauty NASDAQ: ULTA or Target NYSE: TGT—it's a distribution play, not a digital one, and it won't show up in the company's direct channel figures.

That said, the company is citing strong week-over-week sales from Amazon. How big could it get? Here’s where investors should be patient.

On the earnings call, management noted that expanded distribution (of which Amazon is one part) is expected to contribute about $50 million within its full-year 2026 revenue outlook. That’s a fraction of the forecasted $7.3 billion in full-year revenue. CEO Daniel Heaf described the Amazon launch as still in the early days but expects it to have a "meaningful financial impact" as the channel ramps, leaving room for upward estimate revisions if momentum builds.

Has BBWI Reversed Course?The post-earnings rally has pushed BBWI near its consensus price target of $21.21. But even if the stock were to reach the consensus price target, it would still be trading in the middle of its 52-week range, which could signal more upside.

What could be notable is that the rally arrested the drop in BBWI and took the 52-week low made in November 2025 off the table. In that case, investors may find it constructive to start building, or adding to, a position.

Investors See Value in BBWIIf investors now believe the worst is over for Bath & Body Works, it means they could start to focus on valuation. That’s where BBWI makes a strong case. The stock is trading for around 6x forward earnings. That’s a significant discount to the S&P 500, the broad retail and secondary retail averages, and the company’s own historical average.

Plus, Bath & Body Works pays an attractive, stable dividend with a yield of 4.1%. That’s well above the rate of inflation, even if it remains persistent or even inches higher.

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Bath & Body Works, Inc. (BBWI) Q1 2027 Earnings Call Transcript

Kuehn Law Encourages Investors of Bath and Body Works, Inc. to Contact Law Firm PR Newswire NEW YORK, June 1, 20