Bath Body Works 2026 Q3 Earnings Earnings Decline 22.4% as Revenue Slumps

Bath & Body Works reported third-quarter earnings that fell short of expectations, with both revenue and profits declining. The company’s strategic reset and cost-cutting measures aim to address underperformance, but guidance for the full year was slashed, reflecting ongoing consumer demand pressures and macroeconomic challenges.

Revenue

Bath & Body Works reported total revenue of $1.59 billion in Q3 2026, a 1.0% decline from $1.61 billion in the same period last year. The drop in revenue underscores weakening demand for its core fragrance and body care products, with the company attributing the shortfall to underinvestment in key categories and overreliance on promotional strategies.

Earnings/Net Income

The company’s earnings per share (EPS) fell 22.4% to $0.38 in Q3 2026, compared to $0.49 in Q3 2025. Net income also declined sharply, falling to $77 million from $106 million a year earlier. The EPS and net income declines reflect margin compression and operational inefficiencies, signaling a challenging operating environment.

Price Action

Post-earnings, Bath & Body Works’ stock price fell 0.25% in the latest trading day, while the weekly and monthly declines reached 28.06% and 40.01%, respectively. The steep price drop has pushed the stock to a five-year low, with investors reacting negatively to the weak results and revised guidance.

Post-Earnings Price Action Review

The stock’s sharp decline post-earnings highlights investor skepticism about the company’s ability to reverse its performance. Despite CEO Daniel Heaf’s emphasis on a strategic reset, the market remains unconvinced, with shares trading below $20 for the first time since 2020. The prolonged price slump reflects broader concerns about macroeconomic headwinds, including tariffs and shifting consumer spending patterns, which continue to weigh on the retailer’s outlook.

CEO Commentary

CEO Daniel Heaf acknowledged the disappointing results, citing underinvestment in core categories and operational inefficiencies as key issues. He outlined a four-pillar transformation plan focused on innovative core products, brand revitalization, marketplace expansion, and operational efficiency. The strategy includes exiting non-core categories like hair and men’s grooming, launching curated products on Amazon, and prioritizing consumer-centric initiatives.

Guidance

CFO Eva Boratto revised Q4 revenue guidance to a high-single-digit year-over-year decline, with EPS expected to reach at least $1.70. Full-year adjusted EPS was lowered to at least $2.87, down from the prior range of $3.35–$3.60. The company also anticipates $650 million in free cash flow for 2025, funded by $215 million in cost savings over two years, to support strategic investments in digital and product innovation.

Additional News

Bath & Body Works announced a comprehensive transformation plan to address declining sales, including exiting non-core categories and refocusing on core fragrance and body care products. The company also revised its annual forecast, projecting low-single-digit sales declines and significantly reduced profit expectations due to weak consumer demand and rising costs. CEO Daniel Heaf emphasized the need for long-term strategic shifts, including a stronger digital presence and operational streamlining, to regain market confidence.

The stock’s steep decline and revised guidance underscore the urgency of the company’s turnaround efforts. While management remains optimistic about the long-term potential of its strategic reset, investors are closely watching execution and progress in reversing declining consumer engagement.