Home fragrance and body care retailer Bath & Body Works, Inc. (BBWI) in Columbus, Ohio, sells its products under Bath & Body Works, White Barn, C.O. Bigelow, and other brand names online and at retail stores. The shares of this specialty retailer have gained 18.3% in price over the past year to close yesterday’s trading session at $53.35. However, the stock has slumped 23.6% year-to-date. Adding to bearish investors’ sentiments was the company’s announcement last week that Chief Executive Officer Andrew Meslow will step down for health reasons, effective May 12.
BBWI’s guidance also disappointed investors amid its warning of inflationary pressures. Also, the escalating Russia-Ukraine war is placing further pressure on BBWI stock. BBWI plans $400 million in capital expenditures, which is double the amount spent last year. The company is facing increased inflationary costs in raw materials, transportation, and wages, which it is offsetting with price increases. But the rising expenses could squeeze its margins because BBWI intends to set up a new fulfillment center and new stores. Its gross margins could thus be 3 to 4 percentage points lower this year than the recent year’s 49%, while its sales could be flat to 4% up versus 2021.
