Bath & Body Works expects tariffs to hurt gross profit by ~$85M

Bath & Body Works expects tariffs to hurt gross profit by ~$85M

Bath & Body Works (NYSE: BBWI) reported its second-quarter 2025 results, which included a significant update on the expected impact of tariffs on its gross profit. The company expects tariffs to reduce its gross profit by approximately $85 million for the full year 2025. This adjustment reflects the ongoing impact of tariff rates currently in effect and levied by the U.S. government and other countries.

The company's net sales for the second quarter of 2025 totaled $1.549 billion, an increase of 1.5% compared to the same period last year. However, earnings per diluted share were $0.30, down from $0.68 in the second quarter of 2024. The company narrowed its full-year 2025 net sales guidance from 1% to 3% growth to 1.5% to 2.7% growth, compared to $7,307 million in fiscal 2024. Full-year 2025 earnings per diluted share are now expected to be between $3.28 to $3.53, compared to earnings per diluted share of $3.61 in fiscal 2024.

The company's guidance also includes the anticipated impact of $400 million of cash deployed towards share repurchases, which is an increase from the prior expectation of $300 million. Management is focusing on three strategic initiatives: enhancing the digital experience, improving product efficacy, and expanding distribution channels.

The company expects third-quarter 2025 net sales to be up 1% to 3%, compared to $1,610 million in the third quarter of 2024. Third-quarter 2025 earnings per diluted share are expected to be between $0.37 and $0.45, compared to $0.49 in the third quarter of 2024.

References:
[1] https://seekingalpha.com/news/4489987-bath-body-works-misses-q2-estimates-narrows-fy-guidance
[2] https://www.stocktitan.net/news/BBWI/bath-body-works-reports-2025-second-quarter-results-and-updates-s7ffiy7o9qq5.html