Bath & Body Works, Inc. (BBWI)

Bath & Body Works reported second-quarter net sales of $1,514 million, down 2.3 percent, on 26 August 2026 1. Earnings were $0.58 per diluted share, and about $80 million of tariff refunds received in the quarter helped the result 1.

The refunds followed a February 2026 Supreme Court decision that invalidated tariffs imposed under the International Emergency Economic Powers Act 2. The company said that without the refunds, adjusted earnings per share would have been $0.31 1.

Online orders in the U.S. and Canada, which the company calls Direct, grew 3.0 percent, while stores there fell 5.4 percent 1. Chief executive Daniel Heaf called it the first direct net sales growth since 2021 1.

Heaf said underlying business trends remain pressured and that the company is in the early stages of the transformation 1. The company raised its full-year earnings per share guidance and narrowed its sales guidance to a decline of 2.5 to 4 percent 1.

The company was founded in 1963 in Columbus, Ohio, and grew from an apparel-based specialty retailer into a leader in home fragrance, body care and soaps and sanitizer 4. On 2 August 2021 it spun off Victoria's Secret into its own public company 4.

At the spin-off the company changed its name from L Brands to Bath & Body Works, and on 3 August 2021 its common stock began trading under the symbol BBWI 4.

Sales were $6.434 billion in 2020, when pandemic closures hit stores, and rose 22 percent to $7.882 billion in 2021 as stores reopened 4. Soap and sanitizer sales, which had jumped in 2020, declined in 2021 4.

In 2023, a 53-week year, net sales fell 2 percent to $7.429 billion, as the company saw pressure on basket size and a post-pandemic fade in candles and sanitizer 5. The company cut about $150 million of costs that year and reached about 37 million active loyalty members 5.

Net sales were $7,307 million in 2024 and $7,291 million in 2025, a dip of 0.2 percent in 2025 3. Operating income fell 11 percent in 2025 to $1,126 million 3.

The annual report ties the fall in operating income to a lower gross profit rate, mainly from tariffs, and to higher payroll and healthcare costs 3.

Daniel Heaf, who had held senior roles at Nike, became chief executive on 16 May 2025, replacing Gina Boswell 7. The company launched the Consumer First Formula, a multi-year transformation plan, in the third quarter of 2025 3.

The annual report says the company's 2025 performance did not meet its own expectations 3.

Stores

Bath & Body Works makes body care in forms such as fragrance mist, body cream, lotion, eau de parfum, body wash, hand soap and sanitizer, and home fragrance including 3-wick candles 3.

Stores in the U.S. and Canada brought in $1,131 million of second-quarter sales, and the company ran 1,937 stores of its own at quarter end 1.

About 60 percent of the North American fleet was off-mall at last year end, and the company aims for 75 percent over time 3. Sales per selling square foot were $1,026 in 2025, down 2 percent 3.

Direct, Amazon and Ulta

Direct sales were $275 million in the second quarter, up 3.0 percent 1. The company launched on Amazon in the U.S. in February 2026 3.

International and Other sales rose 24.9 percent to $108 million, helped by wholesale sales that include Ulta and Amazon 12.

International and loyalty

Partners run international stores under franchise, license and wholesale arrangements, and the company sets assortment, pricing and store designs 3. Partners operated 596 stores at quarter end, in more than 45 countries 13.

The loyalty program has 40 million active members 3.

People and places

Tom Javitch became interim chief financial officer on 12 June 2026, after Eva Boratto resigned to pursue another opportunity 6.

The company employed over 60,700 associates at last year end, and about 94 percent of them work in stores 3.

It owns five office, distribution and shipping facilities near Columbus, Ohio, of about 4 million square feet, and leases a direct fulfillment center of about 1 million square feet there 3.

Rivals, debt and problems

The annual report names individual and chain specialty stores, department stores, online retailers and discount retailers as competitors 3. North American sales fell $57 million in the second quarter on fewer transactions and lower average dollar sales 2.

Long-term debt was $3,366 million at quarter end, and the company reported a total equity deficit of $1,054 million 1. In the first half it paid down $289 million of long-term debt 1.

The company redeemed $250 million of its 7.500% senior notes due 2029 for $253 million 29. The 10-Q cites the conflict between the U.S. and Iran as a source of added economic uncertainty 2.

The umbrella, in words

The brand is Bath & Body Works; an earlier annual report also named White Barn among its brand names 4. Exhibit 21 lists subsidiaries including Bath & Body Works Direct, Inc., Canada Brands Holdings LP in Alberta and PCAB Switzerland GmbH, and leaves smaller ones unnamed 8.

The company owns land and other investments in Easton, a planned community in Columbus, Ohio, and shows $81 million of Easton assets as held for sale 12.

By contract, the company remains contingently liable for $205 million of lease payments tied to Victoria's Secret & Co. 2.

The company expects full-year net sales to decline between 2.5 and 4 percent from $7,291 million in fiscal 2025 1. It also expects free cash flow of approximately $650 million 1.

It guided full-year earnings per diluted share to between $3.13 and $3.33 and adjusted earnings per share to between $2.60 and $2.80, with no share repurchases assumed 1.

For the third quarter the company guided net sales down between 2.5 and 5 percent from $1,594 million a year earlier, with earnings per diluted share of $0.05 to $0.10 1.

The company has plans to deliver $250 million in cost savings over two years, with $175 million expected in fiscal 2026, to be reinvested in product and brand 3.

In 2026 the company expects North American square footage growth of approximately 1 percent 3. It also describes a multi-year project to modernize its digital and IT systems, which it says remains on track 3.

Heaf said the priority is improving the trajectory of the business to position the company for sustainable growth in 2027 1.