Bath & Body Works Inc
Q2 2027 Earnings
Adjusted results exclude $9 million pre-tax ($7 million after tax) in business transformation costs. Additionally, reported and adjusted results include approximately $80 million in tariff refunds received in the quarter.
Market Reaction
Did BBWI Beat Earnings? Q2 2027 Results
Bath & Body Works delivered a standout second quarter, posting adjusted EPS of $0.62 against a Wall Street consensus of $0.24, a beat of 154.93% that sent a clear signal the retailer's turnaround narrative is gaining traction. The single largest driver of that outperformance was approximately $80 million in tariff refunds received during the period, a timing benefit that meaningfully lifted profitability even as net sales slipped 2.3% year-over-year to $1.51 billion, edging past the $1.50 billion consensus by 1.16%. Gross profit climbed to $692 million from $640 million a year ago, and operating income advanced to $216 million from $157 million, underscoring that margin progress is real even without the tariff windfall. Options traders had braced for a roughly 12% swing heading into the print, and the results justified their caution. Looking ahead, the company raised full-year adjusted EPS guidance to $2.60 to $2.80 while narrowing its net sales decline range to 4% to 2.5%, though Q3 guidance of $0.07 to $0.12 in adjusted EPS signals that tariff headwinds will weigh on the back half.
- Sequential improvement in Body Care category performance
- Stronger average unit retail (AUR) on new product innovation
- Improved brand discoverability
- Continued momentum across marketplace partnerships (Amazon, Ulta Beauty)
- First direct net sales growth since 2021
- Approximately $80 million in tariff refunds received in the quarter boosted profitability
- Gross margin expansion despite lower sales
“Our second-quarter results exceeded our sales and earnings per share guidance. Underlying business trends remain pressured, but we are seeing further evidence that elements of the Consumer First Formula are beginning to work. We delivered sequential improvement in Body Care, stronger AUR on new product innovation, improved brand discoverability, and continued momentum across our marketplace partnerships.”
Bath & Body Works CEO, on the earnings call
Forward Guidance & Outlook
The company raised full-year 2026 GAAP EPS guidance to $3.13–$3.33 and adjusted EPS guidance to $2.60–$2.80. Full-year net sales guidance was narrowed to a decline of 4% to 2.5% versus fiscal 2025's $7,291 million. Full-year free cash flow is expected at approximately $650 million (operating cash flow of ~$890 million less ~$240 million in capital expenditures). For Q3 2026, the company expects net sales to decline 5% to 2.5% versus $1,594 million in Q3 2025, with GAAP EPS of $0.05–$0.10 and adjusted EPS of $0.07–$0.12. No share repurchases are assumed in the outlook.
BBWI YoY Financials
BBWI Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.