Bath & Body Works (BBWI) Q4 2026 earnings summary

Executive summary

• Q4 net sales were $2.7 billion, down 2% year-over-year but above expectations, with adjusted EPS of $2.05 and strong holiday promotions; full-year 2025 net sales were $7.3 billion, flat year-over-year, reinforcing the urgency of the Consumer First Formula strategy.

• The Consumer First Formula, a multi-year transformation plan, focuses on innovation, brand elevation, marketplace expansion, operational efficiency, and team culture.

• Early progress includes successful product launches, improved digital and in-store experiences, international expansion, and a new Amazon launch.

Financial highlights

• Q4 adjusted operating income was $614 million (22.5% of net sales); adjusted EPS was $2.05, down 2% year-over-year; adjusted net income was $415 million, down 8.3%.

• Full-year 2025 adjusted operating income was $1.16 billion (15.9% margin); adjusted EPS was $3.21, down 2.4%; adjusted net income was $669 million, down 8.3%.

• Q4 adjusted gross profit rate was 45.7%, down 100 bps; full-year gross margin was 43.7%, down 60 bps.

• Free cash flow for 2025 was $865 million; 2026 forecasted at $600 million.

• Inventory ended Q4 down 5% year-over-year, with clean levels entering spring.

Outlook and guidance

• 2026 net sales expected to decline 4.5% to 2.5% year-over-year; adjusted EPS guidance: $2.40–$2.65.

• Gross profit rate expected at 42.4%, reflecting margin pressure from product investments and sales decline, partially offset by cost savings.

• Q1 2026 net sales expected down 6% to 4%; adjusted EPS $0.24–$0.30.

• International net sales projected to grow mid to high single digits.

• $175 million in cost savings targeted for 2026 via Fuel for Growth initiatives.