Bath & Body Works (BBWI) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 2025 rose 2.9% year-over-year to $1.42 billion, at the high end of guidance, driven by innovation, dual-channel traffic, and a successful Disney collaboration.

• Earnings per diluted share increased 29% year-over-year to $0.49, exceeding expectations and guidance.

• Operating income reached $209 million (14.7% of net sales), up 11.7% year-over-year, with net income at $105 million.

• Daniel Heaf appointed CEO effective May 16, 2025, outlining a consumer-centric growth strategy focused on digital, packaging, distribution, and international expansion.

• Loyalty program reached 39 million active members, up 4% year-over-year, driving higher spend and retention.

Financial highlights

• Gross profit was $646 million (45.4% of sales), up 6.6% year-over-year, with margin expanding 160 bps due to improved merchandise margin and cost management.

• Operating margin improved to 14.7% from 13.5% year-over-year.

• SG&A was 30.7% of net sales, slightly above expectations due to wage inflation and higher marketing spend.

• Free cash flow for FY 2025 expected at $750-$850 million.

• Cash and cash equivalents at quarter-end were $636 million.

Outlook and guidance

• Full-year 2025 guidance maintained: net sales growth of 1-3% and EPS of $3.25-$3.60, absorbing current tariffs.

• Q2 2025 net sales expected flat to up 2% year-over-year; EPS forecasted at $0.33-$0.38.

• Guidance excludes estimated $0.05 EPS impact from CEO transition.

• Inventory expected to remain elevated in the first half due to tariffs and holiday builds.

• $300 million in share repurchases anticipated in 2025.