Bath & Body Works (BBWI) Q4 2025 earnings summary

Executive summary

• Achieved strong Q4 2024 performance with net sales of $2.8B and EPS of $2.09, both surpassing guidance, driven by product innovation, marketing, and technology investments.

• Full-year 2024 net sales were $7.3B, down 1.6% year-over-year, with adjusted EPS of $3.29 and record loyalty engagement, with over 80% of U.S. sales from loyalty members.

• Delivered $155M in incremental cost savings in 2024 and exceeded $300M over two years through the Fuel for Growth program.

• Expanded adjacencies (men’s, hair, lip, laundry) and international business, with adjacencies now 10% of sales and international sales up nearly 10% on a calendar-adjusted basis.

• Everyday Luxuries and major collaborations (Netflix, Disney, Emily in Paris, Sweethearts) resonated with younger and new customers, driving brand awareness and traffic.

Financial highlights

• Q4 2024 net sales: $2.8B, down 4.3% year-over-year due to calendar shifts but above guidance; full-year net sales: $7.3B.

• Q4 earnings per diluted share: $2.09, exceeding guidance; full-year adjusted EPS: $3.29.

• Q4 gross profit rate: 46.7%, up 80 bps year-over-year; Q4 operating income: $678M (24.3% of net sales).

• Full-year operating cash flow: nearly $900M; adjusted free cash flow: $725M.

• Debt leverage ratio improved to 2.5x gross adjusted debt-to-EBITDAR at year-end.

Outlook and guidance

• 2025 net sales expected to grow 1%–3% year-over-year to $7.3B; diluted EPS guidance: $3.25–$3.60.

• Q1 2025 net sales outlook: 1%–3% growth; EPS: $0.36–$0.43.

• Full-year gross profit rate expected at ~44%; SG&A at ~27%; free cash flow $750M–$850M.

• Plan to repurchase ~$300M of shares and maintain $0.80/share annual dividend in FY 2025.

• Guidance includes China tariff impact but excludes other potential tariffs due to uncertainty.