Bath & Body Works (NYSE:BBWI) Shares Gap Up on Strong Earnings

Bath & Body Works, Inc. (NYSE:BBWI) gapped up prior to trading on Wednesday following a stronger than expected earnings report. The stock had previously closed at $17.58, but opened at $18.26. Bath & Body Works shares last traded at $18.1230, with a volume of 2,822,618 shares trading hands.

The company reported $0.62 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $0.24 by $0.38. Bath & Body Works had a net margin of 10.03% and a negative return on equity of 45.34%. The firm had revenue of $1.51 billion during the quarter, compared to the consensus estimate of $1.50 billion. During the same quarter in the previous year, the firm posted $0.30 EPS. The business’s revenue for the quarter was down 2.3% compared to the same quarter last year. Bath & Body Works has set its Q3 2026 guidance at 0.070-0.120 EPS and its FY 2026 guidance at 2.600-2.800 EPS.

Bath & Body Works Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Friday, September 4th. Shareholders of record on Friday, August 21st will be paid a dividend of $0.20 per share. This represents a $0.80 dividend on an annualized basis and a yield of 4.4%. The ex-dividend date is Friday, August 21st. Bath & Body Works’s dividend payout ratio (DPR) is 22.47%.

Key Headlines Impacting Bath & Body Works

Here are the key news stories impacting Bath & Body Works this week:

• Positive Sentiment: Adjusted earnings per share were $0.62, well above the $0.24 analyst consensus and up from $0.37 a year earlier. Revenue of approximately $1.51 billion also slightly exceeded expectations. Bath & Body Works Q2 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Management raised full-year 2026 adjusted EPS guidance to $2.60-$2.80 from $2.40-$2.65, above the roughly $2.56 consensus. The company also forecast full-year revenue of $7.5-$7.6 billion, higher than the cited $7.0 billion consensus. Bath & Body Works Raises Earnings Outlook on Higher Profit
• Positive Sentiment: Digital and direct-channel sales grew as improvements to the online shopping experience helped offset softer physical-store traffic, suggesting the company’s transformation efforts are gaining traction. Bath & Body Works lifts annual profit forecast
• Neutral Sentiment: The company narrowed its full-year sales outlook to a decline of 4% to 2.5%, indicating that profitability improvements are occurring despite still-challenging top-line trends.
• Negative Sentiment: Third-quarter adjusted EPS guidance of $0.07-$0.12 was substantially below the $0.27 consensus, creating a near-term earnings concern. Second-quarter sales also fell 2.3% year over year, while weak store traffic remains a risk. Bath & Body Works Reports Second Quarter Results
• Negative Sentiment: Unusually heavy put-option buying before earnings signals elevated bearish hedging and could add volatility, though it does not by itself establish the stock’s direction.

Analyst Upgrades and Downgrades

Several research firms have recently issued reports on BBWI. Jefferies Financial Group increased their target price on Bath & Body Works from $22.00 to $23.00 and gave the stock a “hold” rating in a report on Tuesday, July 28th. Wells Fargo & Company upped their price objective on shares of Bath & Body Works from $25.00 to $26.00 and gave the stock an “overweight” rating in a research report on Tuesday, June 23rd. Piper Sandler began coverage on shares of Bath & Body Works in a research note on Friday, May 15th. They set a “neutral” rating and a $20.00 price objective on the stock. Weiss Ratings raised shares of Bath & Body Works from a “sell (d+)” rating to a “hold (c-)” rating in a report on Thursday, July 9th. Finally, Raymond James Financial restated a “market perform” rating on shares of Bath & Body Works in a research report on Wednesday, May 27th. Four equities research analysts have rated the stock with a Buy rating, thirteen have assigned a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $22.57.

Institutional Trading of Bath & Body Works

Institutional investors and hedge funds have recently modified their holdings of the business. Royal Bank of Canada raised its stake in Bath & Body Works by 92.8% during the first quarter. Royal Bank of Canada now owns 59,877 shares of the company’s stock worth $1,815,000 after acquiring an additional 28,815 shares in the last quarter. Goldman Sachs Group Inc. boosted its stake in shares of Bath & Body Works by 15.7% in the 1st quarter. Goldman Sachs Group Inc. now owns 645,970 shares of the company’s stock valued at $19,586,000 after purchasing an additional 87,529 shares in the last quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC grew its holdings in shares of Bath & Body Works by 7.0% during the 1st quarter. UBS AM A Distinct Business Unit of UBS Asset Management Americas LLC now owns 562,757 shares of the company’s stock valued at $17,063,000 after purchasing an additional 36,684 shares during the last quarter. Intech Investment Management LLC bought a new stake in shares of Bath & Body Works during the 1st quarter valued at approximately $1,155,000. Finally, Geneos Wealth Management Inc. increased its position in Bath & Body Works by 217.7% during the 1st quarter. Geneos Wealth Management Inc. now owns 1,169 shares of the company’s stock worth $35,000 after purchasing an additional 801 shares in the last quarter. 95.14% of the stock is currently owned by institutional investors.

Bath & Body Works Trading Up 2.8%

The firm has a market capitalization of $3.64 billion, a price-to-earnings ratio of 5.07, a PEG ratio of 1.89 and a beta of 1.38. The stock’s 50-day moving average is $20.39 and its 200-day moving average is $20.03.

About Bath & Body Works

Bath & Body Works, Inc is a leading specialty retailer focused on personal care, home fragrance and complementary products. Through its flagship Bath & Body Works brand, the company offers a diverse assortment of shower gels, lotions, fragrance mists, candles and home fragrance items. Its product portfolio also includes the White Barn Candle Co range of premium scented candles and diffusers. Bath & Body Works serves consumers through a combination of brick-and-mortar stores and e-commerce platforms, delivering seasonal collections, limited-edition releases and signature scent lines.

Founded in 1990 as part of Limited Brands (now L Brands), Bath & Body Works opened its first store in New Albany, Ohio, and quickly expanded across the United States.