Bath & Body Works: A Hidden Gem in the Consumer Goods Sector

Bath & Body Works, Inc. (BBWI) is a specialty retailer of home fragrance, body care, and soaps and sanitizer products, operating under the Bath & Body Works, White Barn, and other brand names. With a market cap of $6.26 billion and an enterprise value of $10.36 billion, the company has shown consistent growth in revenue and earnings over the past few years. In this article, we will explore the key financial metrics, dividend history, and growth prospects of Bath & Body Works, and discuss why it might be an attractive investment opportunity for long-term investors.



Key Financial Metrics:

1. Revenue Growth: Bath & Body Works' revenue has grown at an average annual rate of approximately 19.04% from 2020 to 2024, reaching $7.44 billion in 2024. This growth is driven by the company's holiday season sales, onshoring initiatives, and product innovation.
2. Earnings per Share (EPS) Growth: The company's EPS has grown at an average annual rate of approximately 63.09% from 2020 to 2024, reaching $3.33 in 2024. This growth is a result of improved operational efficiency, cost savings, and increased profitability.
3. Forward Price-to-Earnings (Forward PE) Ratio: Bath & Body Works' forward PE ratio has decreased over time, from - in 2020 to 10.95 in 2025. This decrease suggests that the company's stock has become more undervalued over time, indicating potential long-term growth opportunities.

Dividend History and Yield:

1. Annual Dividend: Bath & Body Works pays an annual dividend of $0.63, which amounts to a dividend yield of 1.72%.
2. Dividend Growth: The company's dividend growth rate is -2.73% year-over-year, indicating a decrease in the dividend payout. This decrease may raise concerns about the company's financial health and its ability to maintain or grow its dividend in the future.
3. Payout Ratio: Bath & Body Works has a payout ratio of 19.37%, which is relatively low compared to its peers. A lower payout ratio suggests that the company is retaining more of its earnings for reinvestment, which could potentially lead to higher future growth.

Growth Prospects:

1. Sustainability: Bath & Body Works' growth prospects depend on its ability to adapt to changing consumer preferences and market dynamics. The company must continue to innovate and differentiate its products to remain competitive and navigate potential economic downturns and changes in consumer spending habits.
2. Long-term Potential: Despite the challenges posed by changing consumer preferences and market dynamics, Bath & Body Works' consistent revenue and EPS growth, decreasing forward PE ratio, and stable ROE suggest that the company has maintained a strong financial performance over time. This indicates potential long-term growth opportunities for investors.

In conclusion, Bath & Body Works' key financial metrics, dividend history, and growth prospects make it an attractive investment opportunity for long-term investors. While the company faces challenges from changing consumer preferences and market dynamics, its consistent financial performance and potential for reinvestment-driven growth suggest that it is well-positioned for long-term success. Investors should consider these factors when evaluating Bath & Body Works as an investment opportunity.