Operating margins have significantly compressed to 16.8% in 2026Q1 from 24.3% in 2024Q4, reflecting the impact of persistent promotional intensity on profitability.
| Metric | TTM | Jan'26 | Jan'25 | Jan'24 | Jan'23 | Jan'22 | Jan'21 | Jan'20 | Jan'19 | Jan'18 | Jan'17 | Jan'16 | Jan'15 | Jan'14 | Jan'13 | Jan'12 | Jan'11 | Jan'10 | Jan'09 | Jan'08 | Jan'07 | Jan'06 | Jan'05 | Jan'04 | Jan'03 | Jan'02 | Jan'01 | Jan'00 | Jan'99 | Jan'98 | Jan'97 |
|---|
| Sales/Revenue | 7.25B | 7.29B | 7.31B | 7.43B | 7.56B | 7.88B | 6.43B | 5.41B | 13.24B | 12.63B | 12.57B | 12.15B | 11.45B | 10.77B | 10.46B | 10.36B | 9.61B | 8.63B | 9.04B | 10.13B | 10.67B | 9.7B | 9.41B | 8.93B | 8.45B | 8.42B | 9.08B | 9.77B | 9.36B | 9.19B | 8.64B |
| Revenue Growth % | -15.83% | -0.22% | -1.64% | -1.73% | -4.09% | 22.51% | 19.04% | -59.17% | 4.79% | 0.46% | 3.46% | 6.11% | 6.32% | 3% | 0.92% | 7.81% | 11.36% | -4.54% | -10.77% | -5.03% | 10.02% | 3.09% | 5.31% | 5.79% | 0.26% | -7.24% | -7.02% | 4.28% | 1.92% | 6.29% | 9.69% |
| Cost of Goods Sold | 4.12B | 4.1B | 4.07B | 4.19B | 4.3B | 4.03B | 3.34B | 3.02B | 8.34B | 7.67B | 7.45B | 6.95B | 6.65B | 6.34B | 6.07B | 6.31B | 5.98B | 5.6B | 6.04B | 6.63B | 6.66B | 6.22B | 6.03B | 5.68B | 5.35B | 5.41B | 5.89B | 6.17B | 6.14B | 6.06B | 5.86B |
| COGS % of Revenue | - | 56.26% | 55.74% | 56.44% | 56.94% | 51.09% | 51.88% | 55.84% | 62.99% | 60.74% | 59.24% | 57.18% | 58.02% | 58.89% | 58.06% | 60.85% | 62.23% | 64.92% | 66.76% | 65.37% | 62.39% | 64.12% | 64.09% | 63.61% | 63.36% | 64.19% | 64.92% | 63.19% | 65.55% | 65.92% | 67.77% |
| Gross Profit | 3.13B | 3.19B | 3.23B | 3.24B | 3.25B | 3.85B | 3.1B | 2.39B | 4.9B | 4.96B | 5.13B | 5.2B | 4.81B | 4.43B | 4.39B | 4.06B | 3.63B | 3.03B | 3.01B | 3.51B | 4.01B | 3.48B | 3.38B | 3.25B | 3.09B | 3.02B | 3.19B | 3.6B | 3.23B | 3.13B | 2.79B |
| Gross Margin % | 43.19% | 43.74% | 44.26% | 43.56% | 43.06% | 48.91% | 48.12% | 44.16% | 37.01% | 39.26% | 40.76% | 42.82% | 41.98% | 41.11% | 41.94% | 39.15% | 37.77% | 35.08% | 33.24% | 34.63% | 37.61% | 35.88% | 35.91% | 36.39% | 36.64% | 35.81% | 35.08% | 36.81% | 34.45% | 34.08% | 32.23% |
| Gross Profit Growth % | - | -1.39% | -0.06% | -0.58% | -15.56% | 24.52% | 29.7% | -51.28% | -1.21% | -3.24% | -1.52% | 8.24% | 8.56% | 0.98% | 8.11% | 11.73% | 19.91% | 0.73% | -14.33% | -12.56% | 15.32% | 3.02% | 3.91% | 5.07% | 2.59% | -5.31% | -11.4% | 11.43% | 3.03% | 12.39% | 17.39% |
| Operating Expenses | 1.98B | 2.06B | 1.97B | 1.95B | 1.88B | 1.85B | 1.49B | 1.35B | 3.66B | 3.23B | 3.12B | 3.01B | 2.85B | 2.69B | 2.81B | 2.82B | 2.34B | 2.16B | 2.29B | 2.4B | 2.84B | 2.49B | 2.35B | 2.29B | 2.26B | 2.12B | 2.35B | 2.69B | 2.54B | 2.44B | 2.14B |
| OpEx % of Revenue | - | 28.3% | 26.93% | 26.26% | 24.85% | 23.42% | 23.19% | 24.92% | 27.66% | 25.58% | 24.83% | 24.78% | 24.93% | 24.93% | 26.9% | 27.2% | 24.35% | 24.99% | 25.3% | 23.67% | 26.59% | 25.71% | 24.99% | 25.61% | 26.71% | 25.17% | 25.91% | 27.52% | 27.15% | 26.53% | 24.73% |
| Selling, General & Admin | 1.98B | 2.06B | 1.97B | 1.95B | 1.88B | 1.85B | 1.49B | 1.35B | 3.56B | 3.23B | 3.12B | 3.01B | 2.85B | 2.69B | 2.72B | 2.7B | 2.34B | 2.17B | 2.31B | 2.62B | 2.84B | 2.49B | 2.35B | 2.29B | 2.22B | 2.29B | 2.34B | 2.42B | 2.26B | 2.12B | 1.85B |
| SG&A % of Revenue | - | 28.3% | 26.93% | 26.26% | 24.85% | 23.42% | 23.19% | 24.92% | 26.92% | 25.58% | 24.83% | 24.78% | 24.93% | 24.93% | 26.01% | 26.03% | 24.35% | 25.09% | 25.56% | 25.81% | 26.59% | 25.71% | 24.99% | 25.61% | 26.31% | 27.19% | 25.8% | 24.74% | 24.09% | 23.12% | 21.38% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 99M | 0 | 0 | 0 | 0 | 0 | 93M | 121M | 0 | -9M | -23M | -217M | 0 | 0 | 0 | 0 | 34M | -170M | 10M | 272M | 286M | 313.3M | 289.6M |
| Operating Income | 1.15B | 1.13B | 1.27B | 1.28B | 1.38B | 2.01B | 1.6B | 1.04B | 1.24B | 1.73B | 2B | 2.19B | 1.95B | 1.74B | 1.57B | 1.24B | 1.28B | 868M | 718M | 1.11B | 1.18B | 986M | 1.03B | 963M | 838M | 896M | 832M | 907M | 683.8M | 693.3M | 648.1M |
| Operating Margin % | 15.85% | 15.44% | 17.33% | 17.3% | 18.2% | 25.49% | 24.93% | 19.24% | 9.35% | 13.68% | 15.93% | 18.04% | 17.05% | 16.18% | 15.04% | 11.95% | 13.36% | 10.06% | 7.94% | 10.95% | 11.02% | 10.17% | 10.92% | 10.78% | 9.92% | 10.64% | 9.16% | 9.29% | 7.3% | 7.55% | 7.5% |
| Operating Income Growth % | - | -11.06% | -1.48% | -6.61% | -31.51% | 25.25% | 54.23% | -15.93% | -28.41% | -13.73% | -8.62% | 12.24% | 12.05% | 10.81% | 27.06% | -3.58% | 47.93% | 20.89% | -35.32% | -5.61% | 19.27% | -3.99% | 6.65% | 14.92% | -6.47% | 7.69% | -8.27% | 32.64% | -1.37% | 6.97% | 5.9% |
| EBITDA | 1.4B | 1.38B | 1.55B | 1.55B | 1.6B | 2.37B | 2.13B | 1.63B | 1.83B | 2.3B | 2.52B | 2.65B | 2.39B | 2.15B | 1.96B | 1.63B | 1.68B | 1.26B | 1.09B | 1.46B | 1.49B | 1.28B | 1.36B | 1.25B | 1.15B | 1.17B | 1.1B | 1.18B | 969.8M | 1.01B | 937.7M |
| EBITDA Margin % | 19.31% | 18.93% | 21.19% | 20.92% | 21.12% | 30.09% | 33.03% | 30.12% | 13.8% | 18.2% | 20.05% | 21.8% | 20.87% | 19.96% | 18.76% | 15.72% | 17.46% | 14.61% | 12.11% | 14.43% | 13.98% | 13.25% | 14.46% | 14% | 13.59% | 13.93% | 12.15% | 12.07% | 10.36% | 10.95% | 10.85% |
| EBITDA Growth % | -32.02% | -10.85% | -0.39% | -2.69% | -32.67% | 11.62% | 30.53% | -10.89% | -20.53% | -8.81% | -4.83% | 10.79% | 11.21% | 9.58% | 20.44% | -2.92% | 33.07% | 15.16% | -25.1% | -2.01% | 16.11% | -5.51% | 8.71% | 8.97% | -2.13% | 6.35% | -6.45% | 21.57% | -3.66% | 7.35% | 4.43% |
| D&A (Non-Cash Add-back) | 251M | 254M | 282M | 269M | 221M | 363M | 521M | 588M | 590M | 571M | 518M | 457M | 438M | 407M | 389M | 391M | 394M | 393M | 377M | 352M | 316M | 299M | 333M | 288M | 310M | 277M | 271M | 272M | 286M | 313.3M | 289.6M |
| EBIT | 1.17B | 1.16B | 1.34B | 1.37B | 1.39B | 1.81B | 1.55B | 978M | 1.24B | 1.72B | 2.09B | 2.27B | 1.95B | 1.76B | 1.6B | 1.47B | 1.46B | 887M | 630M | 880M | 1.2B | 1.05B | 1.17B | 963M | 838M | 896M | 832M | 907M | 683.8M | 693.3M | 648.1M |
| Net Interest Income | -274M | -276M | -312M | -345M | -348M | -388M | -432M | -370M | -385M | -406M | -394M | -334M | -324M | -314M | -316M | -246M | -181M | -235M | -163M | -131M | -77M | -32M | -28M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 2M | 2.37M | 18M | 18M | 25M | 62M | 30M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 274M | 276M | 312M | 345M | 348M | 388M | 432M | 370M | 385M | 406M | 394M | 334M | 324M | 314M | 316M | 246M | 183M | 237M | 181M | 149M | 102M | 94M | 58M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | -246M | -244M | -238M | -264M | -331M | -586M | -482M | -432M | -380M | -416M | -307M | -258M | -317M | -297M | -292M | -11M | -33M | -218M | -269M | 19M | -79M | -29M | 89M | 203M | -1M | -14M | -107M | -75M | 1.67B | -292.9M | 27.1M |
| Pretax Income | 902M | 882M | 1.03B | 1.02B | 1.04B | 1.42B | 1.12B | 608M | 857M | 1.31B | 1.7B | 1.93B | 1.64B | 1.45B | 1.28B | 1.23B | 1.25B | 650M | 449M | 1.13B | 1.1B | 957M | 1.12B | 1.17B | 837M | 882M | 725M | 832M | 2.35B | 400.4M | 675.2M |
| Pretax Margin % | 12.45% | 12.1% | 14.07% | 13.74% | 13.82% | 18.05% | 17.44% | 11.25% | 6.47% | 10.39% | 13.49% | 15.91% | 14.28% | 13.42% | 12.25% | 11.84% | 13.01% | 7.53% | 4.97% | 11.14% | 10.28% | 9.87% | 11.86% | 13.05% | 9.91% | 10.47% | 7.98% | 8.52% | 25.11% | 4.36% | 7.81% |
| Income Tax | 175M | 233M | 230M | 143M | 251M | 348M | 257M | 148M | 213M | 329M | 538M | 681M | 594M | 543M | 528M | 377M | 446M | 202M | 233M | 411M | 422M | 291M | 411M | 449M | 341M | 376M | 318M | 371M | 305M | 183M | 241M |
| Effective Tax Rate % | 19.4% | 26.42% | 22.37% | 14.01% | 24.02% | 24.46% | 22.91% | 24.34% | 24.85% | 25.08% | 31.72% | 35.21% | 36.31% | 37.55% | 41.22% | 30.73% | 35.65% | 31.08% | 51.89% | 36.4% | 38.47% | 30.41% | 36.83% | 38.51% | 40.74% | 42.63% | 43.86% | 44.59% | 12.97% | 45.7% | 35.69% |
| Net Income | 727M | 649M | 798M | 878M | 800M | 1.33B | 844M | -366M | 644M | 983M | 1.16B | 1.25B | 1.04B | 903M | 753M | 850M | 805M | 448M | 220M | 718M | 676M | 666M | 705M | 717M | 502M | 519M | 428M | 461M | 2.05B | 217.4M | 434.2M |
| Net Margin % | 10.03% | 8.9% | 10.92% | 11.82% | 10.58% | 16.91% | 13.12% | -6.77% | 4.87% | 7.78% | 9.21% | 10.31% | 9.1% | 8.38% | 7.2% | 8.2% | 8.37% | 5.19% | 2.43% | 7.09% | 6.33% | 6.87% | 7.49% | 8.03% | 5.94% | 6.16% | 4.71% | 4.72% | 21.85% | 2.37% | 5.02% |
| Net Income Growth % | -34.91% | -18.67% | -9.11% | 9.75% | -39.98% | 57.94% | 330.6% | -156.83% | -34.49% | -15.11% | -7.58% | 20.25% | 15.39% | 19.92% | -11.41% | 5.59% | 79.69% | 103.64% | -69.36% | 6.21% | 1.5% | -5.53% | -1.67% | 42.83% | -3.28% | 21.26% | -7.16% | -77.47% | 841.35% | -49.93% | -54.84% |
| Net Income (Continuing) | 727M | 649M | 798M | 878M | 794M | 1.07B | 865M | 460M | 644M | 983M | 1.16B | 1.25B | 1.04B | 903M | 753M | 850M | 805M | 448M | 216M | 718M | 675M | 666M | 705M | 717M | 496M | 506M | 407M | 461M | 2.05B | 217.4M | 434.2M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 6M | 258M | -21M | -826M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 2M | 2M | 2M | 1M | 1M | 1M | 1M | 4M | 4M | 2M | 2M | 1M | 1M | 1M | 1M | 1M | 1M | 1M | 1M | 55M | 71M | 33M | 33M | 0 | 0 | 177M | 143.09M | 119.01M | 110.9M | 102.1M | 67.3M |
| EPS (Diluted) | 3.60 | 3.07 | 3.61 | 3.83 | 3.43 | 4.88 | 3.00 | -1.33 | 2.31 | 3.42 | 3.98 | 4.22 | 3.50 | 3.05 | 2.54 | 2.70 | 2.42 | 1.37 | 0.65 | 1.89 | 1.68 | 1.66 | 1.47 | 1.36 | 0.96 | 1.16 | 0.91 | 0.93 | 4.15 | 0.39 | 0.77 |
| EPS Growth % | -32.62% | -14.96% | -5.74% | 11.66% | -29.71% | 62.67% | 325.56% | -157.58% | -32.46% | -14.07% | -5.69% | 20.57% | 14.75% | 20.08% | -5.93% | 11.57% | 76.64% | 110.77% | -65.61% | 12.5% | 1.2% | 12.93% | 8.09% | 41.67% | -17.24% | 27.47% | -2.15% | -77.59% | 964.1% | -49.35% | -42.54% |
| EPS (Basic) | - | 3.07 | 3.62 | 3.89 | 3.45 | 4.96 | 3.04 | -1.33 | 2.33 | 3.46 | 4.05 | 4.32 | 3.57 | 3.05 | 2.54 | 2.88 | 2.51 | 1.39 | 0.66 | 1.91 | 1.71 | 1.70 | 1.50 | 1.38 | 0.98 | 1.18 | 0.95 | 0.98 | 4.25 | 0.39 | 0.78 |
| Diluted Shares Outstanding | 202M | 211.61M | 221M | 229M | 233M | 273M | 281M | 276M | 276.16M | 287.42M | 291.06M | 296.79M | 297.96M | 296.07M | 296.77M | 314.31M | 332.87M | 326.76M | 337M | 380M | 402.38M | 411.45M | 479M | 527.21M | 522M | 447.41M | 470.33M | 495.7M | 493.13M | 557.44M | 563.9M |
| Basic Shares Outstanding | 202.01M | 211.61M | 220M | 225.94M | 232M | 269M | 278M | 276M | 276M | 287.06M | 286M | 290M | 292M | 296.06M | 296.46M | 295M | 321M | 322M | 335M | 375M | 395.32M | 401.76M | 470M | 519.57M | 510M | 439.83M | 450.53M | 470.41M | 481.53M | 557.44M | 556.67M |
| Dividend Payout Ratio | - | 25.73% | 22.18% | 20.73% | 23.25% | 9% | 9.83% | - | 103.42% | 69.79% | 109.5% | 93.46% | 66.31% | 38.65% | 192.43% | 134.59% | 184.84% | 43.08% | 91.36% | 31.62% | 35.21% | 36.34% | 102.7% | 29.01% | 29.88% | 24.86% | 29.8% | 28.2% | 6.07% | 60.03% | 24.94% |
Promotional margin erosion
According to recent quarterly filings, BBWI's revenue growth has trended into negative territory, with the most recent period showing a 3.2% year-over-year decline, suggesting that the post-pandemic demand surge for home fragrance and personal care products has largely normalized across the company's core North American markets.
The consistent negative revenue growth over the last several quarters indicates that the company is struggling to find organic expansion levers outside of its established customer base. Investors should monitor whether this deceleration reflects a permanent shift in consumer discretionary spending or merely a temporary lull in the fragrance innovation cycle.
As reported in financial statements, gross margins have fluctuated between 41% and 46%, reflecting a reliance on promotional activity to sustain volume, which warrants further investigation into whether the company's pricing power is being structurally compromised by the need to clear inventory through deep-discount sales events.
The volatility in gross margins suggests that the company's private-label model is highly sensitive to input cost fluctuations and the effectiveness of its promotional calendar. If margins fail to stabilize above the 45% threshold, it may imply that the brand's premium positioning is eroding in favor of volume-driven discounting.
Based on the provided income statement data, operating margins have compressed significantly from 24.3% in 2024Q4 to 16.8% in 2026Q1, indicating that the company is currently unable to scale its operating expenses efficiently in the face of declining top-line revenue and persistent inflationary cost pressures.
The inability to maintain operating leverage suggests that fixed costs, such as store occupancy and labor, are becoming a larger burden as sales volume softens. This trend implies that management's current strategy of shifting to off-mall locations has yet to yield the expected efficiency gains in operating profitability.
Analysis of the income statement reveals that stock-based compensation remains a recurring expense, with $8 million recorded in 2026Q1, which may indicate that reported net income figures are slightly inflated when compared to cash-based operational performance metrics that exclude non-cash equity-based compensation charges.
While the absolute dollar amount of stock-based compensation appears manageable, its persistence suggests that management is utilizing equity to incentivize performance during a period of top-line stagnation. Investors should scrutinize the impact of these non-cash charges on the long-term dilution of shareholder value and the true underlying earnings power.
Short-sellers may focus on the company's reliance on high-frequency promotional cycles, as the data shows a clear correlation between heavy discounting periods and margin compression, raising concerns about whether the brand can maintain its current market share without sacrificing long-term profitability through unsustainable price-based customer acquisition.
The persistent need for promotional activity to drive traffic suggests that the brand's 'fragrance moat' may be less durable than management claims. If the company cannot transition its loyalty program members into full-price purchasers, the current income statement trajectory may indicate a long-term structural decline in brand equity.
Quick answers to the most common questions about buying BBWI stock.
For fiscal year 2025, Bath & Body Works, Inc. (BBWI) reported total revenue of $7.29B. This represents a 15.7% decline compared to $8.64B in 1996.
Bath & Body Works, Inc. (BBWI) is profitable, generating $649.0M in net income for the fiscal year ending 2025 with a net profit margin of 8.9%.
Bath & Body Works, Inc. (BBWI) reported an operating income of $1.13B, resulting in an operating profit margin of 15.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Bath & Body Works, Inc. (BBWI) generated $3.19B in gross profit for the year, representing a gross profit margin of 43.7%. This demonstrates the company's core pricing power and production efficiency.