First-Quarter Performance Exceeds Guidance but Signals Conservative Path Forward
Bath & Body Works (BBWI) outperformed its own expectations in the first quarter of 2026, delivering net sales of $1.38 billion—down 3.2% from the prior year—but still above its guidance. Reported earnings per diluted share surged to $0.90, nearly doubling the $0.49 reported a year prior, driven by several one-time gains. Adjusted for these items, earnings per diluted share came in at $0.32.
Key Q1 Figures Highlight Adjusted Performance
| Metric | Q1 2026 | Q1 2025 | % Change |
|---|---|---|---|
| Net Sales ($M) | 1,378 | 1,424 | -3.2% |
| Reported EPS | 0.90 | 0.49 | +83.67% |
| Adjusted EPS | 0.32 | 0.49 | -34.69% |
| Operating Income ($M, Adj.) | 151 | 209 | -27.75% |
| Net Income ($M, Adj.) | 65 | 105 | -38.10% |
Guidance Reaffirmed with Emphasis on Stabilization, Not Growth
Despite the beat, Bath & Body Works maintained its full-year 2026 guidance for net sales to decline between 4.5% and 2.5%, and adjusted earnings per share between $2.40 and $2.65—both below prior-year levels. The company forecasts free cash flow for 2026 at around $600 million, with no share repurchases or tariff refunds built into the outlook.
| 2026 Guidance | Low End | High End | 2025 Actual |
|---|---|---|---|
| Sales Growth | -4.5% | -2.5% | - |
| Adj. EPS | 2.40 | 2.65 | 3.21 |
| Free Cash Flow ($M) | 600 | 600 | - |
Leadership Transition Adds an Element of Uncertainty
The exit of CFO Eva Boratto, effective June 12, injects some uncertainty into the near-term outlook. Tom Javitch, a 16-year Bath & Body Works veteran, will step in as interim CFO while the board seeks a permanent replacement. Leadership continuity will be important as the company continues its Consumer First Formula strategy to reignite sales and brand momentum.
Cash Remains Strong, Store Count Stable
Cash and cash equivalents finished the quarter at $820 million, up $184 million from a year ago. Total company-operated stores in the U.S. and Canada decreased modestly to 1,923 from 1,927, reflecting ongoing optimization in its physical footprint. International partner-operated stores grew slightly.
| Store Type | 1/31/2026 | Opened | Closed | 5/2/2026 |
|---|---|---|---|---|
| U.S. | 1,814 | 13 | 17 | 1,810 |
| Canada | 113 | 0 | 0 | 113 |
| International | 573 | 8 | 2 | 579 |
Takeaway: Proof of Progress but Path Remains Challenging
The first quarter’s results validate some early success of management’s efforts to modernize and optimize the business, as confirmed by CEO Daniel Heaf. Yet, the outlook shows that the road to sustainable growth remains steep. The departure of the CFO and flat guidance for the rest of 2026 underscores the company’s cautious stance.
Investors watching BBWI can look for further updates on execution of the Consumer First Formula and any signs of accelerated growth, particularly as leadership transitions settle. With a robust cash position and disciplined expense management, Bath & Body Works appears well-equipped to weather ongoing challenges, but the outlook remains measured, not exuberant.
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