Bath & Body Works (BBWI) Q2 FY25 Earnings call transcript Aug 28, 2024
AInvestThursday, Aug 29, 2024 11:56 am ET
1min read
BBWI --

Bath & Body Works, a leading retailer of personal care and home fragrance products, held its second quarter 2024 earnings call, revealing a mixed performance in the face of economic uncertainty and a consumer focus on value. The company reported a net sales decline of 2% compared to the previous year, with adjusted earnings per diluted share of $0.37 exceeding guidance by $0.01.

Strategic Priorities and Financial Performance

Bath & Body Works is focused on a five-pronged strategy to drive growth and optimize its business, including elevating the brand and product, extending reach, engaging customers, enabling a seamless omnichannel experience, and enhancing operational excellence and efficiency. Despite a challenging environment, the company remains confident in its strategy and is investing in initiatives to position itself for long-term sustainable growth.

The second quarter was marked by a semi-annual sale that fell short of expectations, which impacted net sales across all categories, particularly in body care. However, the outperformance in adjusted earnings per diluted share was driven by continued improvements in merchandise margin and solid execution on Fuel for Growth initiatives.

Market Expansion and Customer Engagement

Bath & Body Works is expanding its reach through new category adjacencies and international markets, with a focus on attracting new customers and enhancing customer engagement. The company's loyalty program, which boasts over 37 million active members, remains a key driver of sales, with loyalty members accounting for over 80% of U.S. sales.

Technology and Innovation

Innovation is at the heart of Bath & Body Works' strategy, with a focus on leveraging technology to enhance the customer experience and drive growth. The company is investing in a native mobile app, social commerce capabilities, and a generative AI fragrance finder to provide a more personalized shopping experience.

Cost Savings and Guidance

Bath & Body Works is implementing cost savings initiatives to support its top line growth, increasing its 2024 cost savings guidance to $130 million from $100 million. The company also announced a share repurchase program of $400 million, reflecting its confidence in its financial health and future prospects.

Looking Ahead

Despite the challenges faced in the first half of the year, Bath & Body Works remains optimistic about its future, with a focus on executing with precision, driving innovation, and expanding its reach through new categories and international markets. The company will continue to navigate the dynamic environment, leveraging its strong brand, loyal customer base, and strategic initiatives to position itself for long-term sustainable growth.

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