Bath & Body Works’ first quarter results received a positive market reaction, reflecting stronger-than-expected profitability despite a decline in sales. Management attributed the quarter’s performance to early wins from its consumer-first formula, with CEO Daniel Heaf highlighting “strong product acceptance” in new hand soap launches and increased productivity in hero categories. However, body care underperformed due to planned changes in assortment and a heavier focus on accessories within collaborations. The company’s ongoing transformation efforts, including new product introductions and streamlined assortment, are beginning to show incremental improvements, even as broader business trends remain pressured.
Is now the time to buy BBWI? Find out in our full research report (it’s free for active Edge members).
Bath and Body Works (BBWI) Q1 CY2026 Highlights:
- Revenue: $1.38 billion vs analyst estimates of $1.36 billion (3.2% year-on-year decline, 1.2% beat)
- EPS (GAAP): $0.91 vs analyst estimates of $0.29 (significant beat)
- Revenue Guidance for Q2 CY2026 is $1.49 billion at the midpoint, roughly in line with what analysts were expecting
- EPS (GAAP) guidance for the full year is $3.13 at the midpoint, beating analyst estimates by 20.9%
- Operating Margin: 16.8%, up from 14.7% in the same quarter last year
- Locations: 2,502 at quarter end, up from 2,424 in the same quarter last year
- Same-Store Sales fell 3.8% year on year (0.2% in the same quarter last year)
- Market Capitalization: $3.77 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Bath and Body Works’s Q1 Earnings Call
- Irwin Boruchow (Wells Fargo) asked about the turnaround in body care and whether the category’s issues were resolved; CEO Daniel Heaf described corrective actions taken and said early Q2 results are encouraging, but long-term growth will depend on innovation and assortment.
- Matthew Boss (JPMorgan) inquired about lessons from the Amazon launch and channel balancing; Heaf emphasized Amazon’s effectiveness in acquiring new, younger customers and stated the owned channel will always have the broadest assortment.
- Simeon Siegel (Guggenheim Securities) pushed for an explanation of declining sales—unit versus price—and customer frequency; Heaf and CFO Eva Boratto explained loyal customers are spending more, but growth depends on winning younger consumers and increasing units via innovation.
- Lorraine Hutchinson (Bank of America) questioned the timing of a return to positive sales growth; Heaf replied that the company is not yet calling an inflection point, but expects a more visible impact from new launches in the second half.
- Mark Altschwager (Baird) asked about maintaining promotional discipline amid a value-seeking customer base; Heaf indicated promotions will remain consistent year-over-year, prioritizing product-driven events over deeper discounts.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will closely monitor (1) the response to new product launches and the impact of body care assortment changes, (2) progress in digital channel upgrades and Amazon expansion, and (3) the effectiveness of store navigation improvements in driving conversion. Continued inflation and tariff trends will also be important to watch for their effect on margins.
Bath and Body Works currently trades at $18.59, up from $17.73 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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