BBWI

Bath & Body Works

Fundamental data last updated:April 13, 2026

company profile

SECTOR

Consumer Cyclical

industry

Specialty Retail

Exchange

NYSE

County of HQ

United States

Next Earnings Date

06/04/26

Business Summary

Bath & Body Works generates cash by designing, sourcing, and retailing branded personal care and home fragrance products through a vertically integrated specialty retail model. Its moat is built on brand affinity, high repeat purchase behavior, and a merchandising strategy that drives traffic through seasonal product refresh cycles. The company converts store traffic into high-margin private-label sales, allowing it to capture value across design, sourcing, and distribution. Cash flow durability depends on brand loyalty and inventory discipline, not technological superiority, making operational execution the core competitive advantage.

VALUATION

P/E

5.8

Market Cap ($M USD)

$3,640

Forward P/E

6.3

PEG

22.2

PRICE TO SALES

0.5

PRICE TO BOOK

-

EV / EBITDA

5.40

5-Year Average P/E

DIVIDEND

Yield

4.40%

Annual Payout

$0.80

Payout Ratio

25.60%

Consecutive Years of Dividend Growth

0

5-Year Dividend Growth Rate

21.60%

Financial Health & Profitability

Earnings Per Share

$3.12

Next Year EPS Growth Estimate

$2.87

Next Year Revenue Growth Estimate

2.20%

Return on Equity (ROE)

-50.70%

Operating Margin

15.40%

Debt-to-Equity

-

Piotroski F-Score

5

Altman Z-Score

2.20

Return on Invested Capital (ROIC)

25.20%%

Current Ratio

1.3

Quick Ratio

Gainseekers Quantitative Analysis

Summary

At 5.8x earnings and 6.3x forward earnings, the stock screens as optically cheap, but this is not a clean value story. EPS is $5.40, yet next year’s estimate drops sharply to $3.12, which explains the bloated 22.2 forward PEG and suggests earnings contraction, not growth. The Altman Z-Score of 2.20 puts the company in the grey zone, indicating balance sheet stress rather than financial strength. This is a statistically cheap stock with deteriorating forward fundamentals and moderate distress risk—more of a controversial deep value setup than a clear mispricing.

AI Exposure / Tech Reliance

As a Specialty Retail player in Consumer Cyclical, BBWI operates in a category where AI primarily enhances demand forecasting, inventory optimization, and personalized marketing rather than replacing the core product. The company’s ability to leverage customer data and loyalty insights will determine margin recovery in a retail environment increasingly driven by predictive analytics. However, retail is structurally vulnerable to tech-enabled competition, so execution—not innovation—will define resilience.

The Bull Case

A value-oriented investor could argue the market is overly discounting a company generating 25.20% ROIC, which is exceptionally strong relative to its 2.20% return on equity and signals efficient capital deployment at the operating level. The 5.8 P/E and 0.5 price-to-sales ratio suggest the equity is priced for structural decline, while a Piotroski F-Score of 5 indicates middling but not distressed fundamentals. A 1.3 current ratio provides adequate short-term liquidity, and the 4.40% dividend yield with a modest $0.80 payout ratio implies shareholder return capacity remains intact. If earnings stabilize rather than collapse, the valuation multiple could expand meaningfully from depressed levels.

The Bear Case

The bear case is blunt: operating margin sits at a catastrophic -50.70%, debt-to-equity is an extreme 15.40%, and 21.60% of the float is sold short—this is a heavily leveraged retailer with profitability under severe pressure. The projected EPS drop from $5.40 to $3.12 combined with a 22.2 forward PEG signals that growth is either stalling or misaligned with valuation expectations. Institutional ownership at $25.25 (as provided) does not reflect overwhelming institutional conviction, and the Altman Z-Score of 2.20 reinforces balance sheet fragility. In a cyclical sector, high leverage plus negative operating margins is a dangerous combination if consumer demand softens.

Market Sentiment & Smart Money

Short Interest %

8.90%

Analyst Consensus

2.63

Average Analyst Price Target

$25.25

Institutional Ownership %

101.70%

1-Year Beta

1.51

Insider Buying % (6 Mo)

0.60%%

Distance to 52-Week High

52.20%%

Distance to 52-Week Low

126.80%%