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Bath & Body Works, Inc. (BBWI) is a specialty retailer in the personal care and home fragrance industry, with a market cap of $7.2 billion. Based in Columbus, Ohio, the company offers a range of body care, home fragrance, and hygiene products under brands like Bath & Body Works and White Barn through retail and e-commerce channels.
Companies valued at less than $10 billion are generally considered "mid-cap" stocks, and Bath & Body Works fits this criterion perfectly. BBWI is renowned for its innovative and exclusive fragrance collections for body care and home, consistently creating customer loyalty through its signature scents and immersive retail experience.
However, the soaps and sundries company has slipped 38.9% from its 52-week high of $52.99, recorded in June. Shares of Bath & Body Works dipped 17% over the past three months, underperforming the broader Dow Jones Industrials Average's ($DOWI) 8% gains over the same time frame.
Longer term, BBWI is down nearly 25% on a YTD basis, lagging behind DOWI's 12.3% rise. Moreover, shares of Bath & Body Works have risen marginally over the past 52 weeks, compared to Dow Jones' 26.1% returns over the same time frame.
To confirm the bearish price trend, BBWI stock has been trading below its 50-day and 200-day moving averages since June.
Bath & Body Works stock tumbled 12.8% on Jun. 4, primarily due to management's guidance, which indicated a 13% decline in earnings for 2024 despite beating Q1 expectations. Investors were concerned about the forecast of flat or slightly declining sales and the anticipated profit drop, leading to the sell-off. Moreover, despite beating adjusted EPS estimates, the stock fell 7% on Aug. 28 as the company reported weaker-than-expected Q2 revenue of $1.5 billion and lowered its full-year revenue forecast to a decline of 4% to 2% year-over-year. The weaker outlook concerned investors, driven by a "choppier macroeconomic environment" and soft first-half sales trends.
In comparison, rival Ulta Beauty, Inc. (ULTA) is outperforming BBWI. Shares of Bath & Body Works have gained nearly 3% over the past 52 weeks and are down 17.6% on a YTD basis.
Despite BBWI’s underperformance, analysts remain moderately optimistic about the stock’s prospects. The stock has a consensus rating of "Moderate Buy" from the 18 analysts in coverage, and the mean price target of $41 is a premium of 26.6% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
