Bath & Body Works, Inc.: Q3 FY2025 earnings call

What management said about Q3 FY2025, from the documents filed with the SEC on 20 November 2025: press release. Guidance figures: 5 lowered, 2 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net sales fell 1% in quarter: Third-quarter net sales were $1,594 million, down 1% from $1,610 million a year earlier. Source
• Diluted EPS fell to $0.37: Reported diluted EPS was $0.37, against $0.49 a year earlier. Source
• Q4 and full-year guidance lowered: Management lowered fourth-quarter and full-year guidance, citing current business trends and recent macro consumer pressures. Source
• Direct sales fell 7%: Direct U.S. and Canada sales were $299 million, down 7.0% from $321 million; year-to-date direct sales fell 7.3%. Source
• Consumer First Formula launched: Four priorities: product innovation, brand reignition, winning in the marketplace, and operating with speed and efficiency. Source
• Savings to fund growth investment: Management said the cost savings will fund revenue-generating initiatives across product and brand. Source

“Our third quarter results were below expectations, and we are lowering our outlook for the remainder of the year reflecting current business trends and continuation of recent macro consumer pressures.”

Daniel Heaf, chief executive officer of Bath & Body Works

Guidance

What changed from last quarter

• Guidance lowered: Full-year net sales guidance moved from 1.5% to 2.7% growth to a decline of low single digits. Source
• Guidance lowered: Full-year diluted EPS guidance moved from $3.28 to $3.53 to at least $2.83. Source
• Guidance lowered: Full-year adjusted diluted EPS guidance moved from $3.35 to $3.60 to at least $2.87. Source
• Guidance lowered: Full-year free cash flow guidance moved from $750 million to $850 million to approximately $650 million. Source
• New guidance: Fourth-quarter guidance given for net sales and diluted EPS, which the prior release did not include. Source
• Guidance kept: Share repurchase assumption of $400 million kept from the prior release. Source
• New: Consumer First Formula transformation plan announced across brand, product and marketplace. Source
• New: Sale of a non-core asset produced an $8 million pre-tax gain in the quarter. Source

Results and growth drivers

• Net sales fell 1% in quarter: Third-quarter net sales were $1,594 million, down 1% from $1,610 million a year earlier. Source
• Operating income fell to $161M: Operating income was $161 million, against $218 million; net income was $77 million, against $106 million. Source
• Diluted EPS fell to $0.37: Reported diluted EPS was $0.37, against $0.49 a year earlier. Source
• Adjusted EPS of $0.35: Adjusted diluted EPS was $0.35 after excluding an $8 million pre-tax gain from a non-core asset sale; adjusted net income was $71 million. Source
• Q4 and full-year guidance lowered: Management lowered fourth-quarter and full-year guidance, citing current business trends and recent macro consumer pressures. Source

Segments, channels and stores

• Company-operated store sales up 0.2%: U.S. and Canada company-operated store sales were $1,222 million, up 0.2% from $1,220 million; year-to-date sales rose 3.0%. Source
• Direct sales fell 7%: Direct U.S. and Canada sales were $299 million, down 7.0% from $321 million; year-to-date direct sales fell 7.3%. Source
• International sales up 6.1%: International sales, including franchise royalties and wholesale, were $73 million, up 6.1% from $69 million. Source
• Company-operated stores reached 1,934: Company-operated U.S. and Canada stores rose from 1,895 at the start of the year to 1,934, with 73 openings and 34 closings year to date. Source

“I remain as confident as I was on my first day that Bath & Body Works possesses unique enduring strengths”

Daniel Heaf, chief executive officer of Bath & Body Works

Products and customers

• Core categories anchor product plan: The plan centers product work on body care, home fragrance, soaps and sanitizers. Source
• Assortment to be simplified: Product work is guided by consumer insight, aiming at sensorial excellence and a simpler assortment built on trend-right innovation. Source
• Reaching new consumers through discovery: Management aims to acquire new consumers by meeting them where they are, with discovery made effortless. Source

Costs, margins and gross profit

• Gross profit fell on higher costs: Cost of goods sold, buying and occupancy rose to $936 million from $910 million, and gross profit fell to $658 million from $700 million. Source
• Operating expenses rose to $497M: General, administrative and store operating expenses were $497 million, against $482 million a year earlier. Source
• Interest expense down, other income up: Interest expense fell to $68 million from $77 million, and other income, net was $10 million against $4 million. Source
• Reported tax rate lower: The reported tax rate for the quarter was 25.3%, against 26.7% a year earlier. Source

“While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth.”

Daniel Heaf, chief executive officer of Bath & Body Works

Demand and inventory

• Inventory build used operating cash: Year-to-date inventory change used $516 million of operating cash, against $470 million a year earlier; payables and accruals added $390 million. Source
• Payables rose to $781M: Accounts payable were $781 million at quarter end, against $510 million a year earlier. Source
• Year-to-date net sales up 1.1%: Year-to-date net sales were $4,567 million, up 1.1% from $4,520 million. Source

Capital, cash and shareholder returns

• Operating cash flow positive year to date: Year-to-date operating cash flow was $225 million, against negative $69 million a year earlier. Source
• Buybacks and dividends year to date: Year-to-date share repurchases were $344 million and dividends paid were $126 million, against $349 million and $134 million a year earlier. Source
• Capital spending slightly higher: Year-to-date capital expenditures were $174 million, against $166 million; non-core asset sale proceeds were $9 million. Source
• Cash balance rose year over year: Cash and cash equivalents were $236 million at quarter end, against $191 million a year earlier. Source

Strategy and investment

• Consumer First Formula launched: Four priorities: product innovation, brand reignition, winning in the marketplace, and operating with speed and efficiency. Source
• Savings to fund growth investment: Management said the cost savings will fund revenue-generating initiatives across product and brand. Source
• Reignite the brand with creators: Plan includes bolder brand moments, deeper creator advocacy and fragrance franchises built around iconic scents. Source

People and leadership

• CEO immersed in the business: Chief executive Daniel Heaf said he has spent the past six months deeply immersed in the business. Source
• Faster, more efficient organization: Management plans to transform the company to be faster and more efficient, breaking down silos and speeding decisions. Source
• Leadership transition costs recorded: Second-quarter pre-tax costs of $15 million, mainly severance, related to transitioning certain leadership team members; excluded from adjusted results. Source

Balance sheet and other items

• Easton assets held for sale: Easton assets of $81 million are shown as held for sale, the same amount as at August 2, 2025. Source
• Long-term debt steady: Long-term debt was $3,890 million, against $3,883 million a year earlier. Source
• Equity deficit narrowed: Total equity was a deficit of $1,592 million, against $1,748 million a year earlier; total assets were $4,989 million. Source

Coming up, as management said on 20 November 2025

• Benefits seen in coming quarters: Management said consumers will see the changes' benefits in coming quarters, with financial impact taking longer to show. Source
• Digital and wholesale expansion continues: Management plans to keep enhancing digital and in-store experiences and expand into new wholesale channels and marketplaces. Source

Figures management reported

Risks management discussed

• Demand: Management cited negative consumer sentiment weighing on purchase intent as a factor in fourth-quarter guidance. Source
• External: Fourth-quarter guidance includes all tariff rates currently in effect and levied by the U.S. government and other countries. Source

Earlier plans management reported on

• Missed: Management said third-quarter results were below expectations. Source
• Not stated: Management said work on faster decisions and fewer silos had already begun. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.