Bath & Body Works, Inc. (NYSE: BBWI) today reported third
quarter 2023 results.
Gina Boswell, CEO of Bath & Body Works, commented, “The team
delivered third quarter net sales in line with the high end of our
expectations and earnings that exceeded our plans. Our performance
in the quarter was marked by strong merchandise margin improvement
and the ongoing benefits of our cost optimization initiatives. As
we close out the year, our team remains focused on delivering a
great Holiday assortment and omnichannel experience for customers
while leveraging our agility to chase demand. Amidst the ongoing
macroeconomic pressures affecting consumers, we continue to execute
against our strategic initiatives to drive growth and create
long-term value.”
Third Quarter 2023 Results
The company reported net sales of $1.562 billion for the third
quarter ended October 28, 2023, a decrease of 2.6% compared to net
sales of $1.604 billion for the third quarter ended October 29,
2022.
The company reported earnings per diluted share of $0.52 for the
third quarter of 2023, compared to $0.40 for the same period of the
prior year. Third quarter operating income was $221 million
compared to $202 million last year, and net income was $119 million
compared to $91 million last year.
Reported third quarter 2023 net income includes a $12 million
pre-tax gain ($9 million after-tax gain) associated with the early
extinguishment of debt, resulting from the open market repurchase
and retirement of $174 million principal amount of the company’s
senior notes during the third quarter.
Excluding the gain on the early extinguishment of debt, adjusted
third quarter 2023 earnings per diluted share were $0.48 and
adjusted net income was $110 million.
At the conclusion of this press release is a reconciliation of
reported‐to‐adjusted results.
2023 Outlook
The company has updated its full-year forecast to
reflect better-than-expected bottom line results in the third
quarter, the impact of debt and share repurchases in the third
quarter, and lower sales expectations for the fiscal year.
For fiscal 2023, the company expects net sales to
decline 2.5% to 4% compared to $7.560 billion in 2022. The company
now expects full-year 2023 earnings per diluted share to be between
$2.99 and $3.19, compared to $3.40 in 2022. The company expects
full-year 2023 adjusted earnings per diluted share to be between
$2.90 and $3.10. The company’s adjusted earnings per diluted share
forecast excludes the gain on the early extinguishment of debt
associated with the open market repurchase and retirement of $373
million principal amount of the company’s senior notes through the
end of the third quarter.
Fiscal 2023 will include a 53rd week, with the
fourth quarter of fiscal 2023 consisting of 14 weeks. The company’s
full-year outlook includes the impact of the 53rd week, estimated
at approximately $85 million of net sales and 5 cents of earnings
per diluted share.
The company expects fourth quarter net sales to
decline 1% to 5% compared to $2.889 billion in the fourth quarter
of 2022. Fourth quarter earnings per diluted share are expected to
be between $1.70 and $1.90, compared to $1.86 earnings per diluted
share in the fourth quarter of 2022.
The company’s fourth quarter and full-year outlook
exclude the impact of any future debt or share repurchase
activity.
Earnings Call and Additional Information
Bath & Body Works, Inc. will conduct its third
quarter earnings call at 9:00 a.m. Eastern Standard Time on Nov.
16. To listen, call 877-407-9219 (international dial‐in number:
201-689-8852). For an audio replay, call 877-660-6853
(international replay number: 201-612-7415); access code 13742352
or log onto www.BBWInc.com.
ABOUT BATH & BODY WORKS
Home of America’s Favorite Fragrances®, Bath &
Body Works is a global leader in personal care and home fragrance,
including top-selling collections for fine fragrance mist, body
lotion and body cream, 3-wick candles, home fragrance diffusers and
liquid hand soap. Powered by agility and innovation, the company’s
predominantly U.S.-based supply chain enables the company to
deliver quality, on-trend luxuries at affordable prices. Bath &
Body Works serves and delights customers however and wherever they
want to shop, from welcoming, in-store experiences at more than
1,840 company-operated Bath & Body Works locations in the U.S.
and Canada and more than 450 international franchised locations to
an online storefront at bathandbodyworks.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
We caution that any forward-looking statements (as
such term is defined in the Private Securities Litigation Reform
Act of 1995) contained in this press release or made by our company
or our management involve risks and uncertainties and are subject
to change based on various factors, many of which are beyond our
control. Accordingly, our future performance and financial results
may differ materially from those expressed or implied in any such
forward-looking statements. Words such as “estimate,” “project,”
“plan,” “believe,” “expect,” “anticipate,” “intend,” “planned,”
“potential,” “target,” “goal” and any similar expressions may
identify forward-looking statements. Risks associated with the
following factors, among others, in some cases have affected and in
the future could affect our financial performance and actual
results and could cause actual results to differ materially from
those expressed or implied in any forward-looking statements
included in this press release or otherwise made by our company or
our management:
- general economic conditions, inflation
and deflation, consumer confidence, consumer spending patterns and
market disruptions including pandemics or significant health
hazards, severe weather conditions, natural disasters, terrorist
activities, financial crises, political crises or other major
events, or the prospect of these events;
- the seasonality of our business;
- the anticipated benefits from the
Victoria’s Secret & Co. spin-off may not be realized;
- the spin-off of Victoria’s Secret
& Co. may not be tax-free for U.S. federal income tax
purposes;
- our dependence on Victoria’s Secret
& Co. for information technology services and the transition of
such services to our own information technology systems or to those
of third-party technology service providers;
- our ability to attract, develop and
retain qualified associates and manage labor-related costs;
- difficulties arising from turnover in
company leadership or other key positions;
- the dependence on store traffic and
the availability of suitable store locations on appropriate
terms;
- our continued growth in part through
new store openings and existing store remodels and expansions;
- our ability to successfully operate
and expand internationally and related risks;
- our independent franchise, license and
wholesale partners;
- our direct channel business;
- our ability to protect our reputation
and our brand image;
- our ability to successfully complete
environmental, social and governance initiatives, and associated
costs thereof;
- our ability to successfully achieve
expected annual cost savings in connection with our profit
optimization efforts to reduce expenses and improve operating
efficiency in the business;
- our ability to attract customers with
marketing, advertising and promotional programs;
- our ability to maintain, enforce and
protect our trade names, trademarks and patents;
- the highly competitive nature of the
retail industry and the segments in which we operate;
- consumer acceptance of our products
and our ability to manage the life cycle of our brand, develop new
merchandise and launch new product lines successfully;
- our ability to source, distribute and
sell goods and materials on a global basis, including risks related
to:
- political instability, wars and
other armed conflicts, environmental hazards or natural
disasters;
- significant health hazards or
pandemics, such as the COVID-19 pandemic, which could result in
closed factories and/or stores, reduced workforces, scarcity of raw
materials, and scrutiny or embargoing of goods produced in impacted
areas;
- duties, taxes and other
charges;
- legal and regulatory matters;
- volatility in currency exchange
rates;
- local business practices and
political issues;
- delays or disruptions in shipping
and transportation and related pricing impacts;
- disruption due to labor disputes;
and
- changing expectations regarding
product safety due to new legislation;
- our geographic concentration of vendor
and distribution facilities in central Ohio;
- our reliance on a limited number of
suppliers to support a substantial portion of our inventory
purchasing needs;
- the ability of our vendors to deliver
products in a timely manner, meet quality standards and comply with
applicable laws and regulations;
- fluctuations in foreign currency
exchange rates;
- fluctuations in product input
costs;
- fluctuations in energy costs;
- our ability to adequately protect our
assets from loss and theft;
- increases in the costs of mailing,
paper, printing or other order fulfillment logistics;
- claims arising from our
self-insurance;
- our and our third-party service
providers’, including Victoria’s Secret & Co. during the term
of the Transition Services Agreement between us and Victoria’s
Secret & Co., ability to implement and maintain information
technology systems and to protect associated data;
- our ability to maintain the security
of customer, associate, third-party and company information;
- stock price volatility;
- our ability to pay dividends and make
share repurchases under share repurchase authorizations;
- shareholder activism matters;
- our ability to maintain our credit
ratings;
- our ability to service, repurchase or
refinance our debt and maintain compliance with our restrictive
covenants;
- our ability to comply with laws,
regulations and technology platform rules or other obligations
related to data privacy and security;
- our ability to comply with regulatory
requirements;
- legal and compliance matters; and
- tax, trade and other regulatory
matters.
We are not under any obligation and do not intend
to make publicly available any update or other revisions to any of
the forward-looking statements contained in this press release to
reflect circumstances existing after the date of this press release
or to reflect the occurrence of future events even if experience or
future events make it clear that any expected results expressed or
implied by those forward-looking statements will not be realized.
Additional information regarding these and other factors can be
found in “Item 1A. Risk Factors” in our 2022 Annual Report on Form
10-K, as filed with the Securities and Exchange Commission, and our
subsequent filings.
For further information, please contact:
Bath & Body Works, Inc.:Investor RelationsHeather
HollanderInvestorRelations@bbw.com
Media RelationsJamison PackCommunications@bbw.com
BATH & BODY WORKS, INC.
Third Quarter
2023
Total Sales (In millions):
|
Third Quarter |
|
Year-to-Date |
|
2023 |
|
2022 |
|
%Inc/(Dec) |
|
2023 |
|
2022 |
|
%Inc/(Dec) |
Stores - U.S. and Canada |
$ |
1,168 |
|
$ |
1,178 |
|
(1 |
%) |
|
$ |
3,345 |
|
$ |
3,398 |
|
(2 |
%) |
Direct - U.S. and Canada |
|
317 |
|
|
345 |
|
(8 |
%) |
|
|
926 |
|
|
1,030 |
|
(10 |
%) |
International (a) |
|
77 |
|
|
81 |
|
(5 |
%) |
|
|
246 |
|
|
244 |
|
1 |
% |
Total Bath & Body
Works |
$ |
1,562 |
|
$ |
1,604 |
|
(3 |
%) |
|
$ |
4,517 |
|
$ |
4,672 |
|
(3 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Results include royalties associated
with franchised stores and wholesale sales.
Total Company-Operated Stores:
|
Stores |
|
|
|
|
|
Stores |
|
1/28/2023 |
|
Opened |
|
Closed |
|
10/28/2023 |
United States |
1,693 |
|
70 |
|
(31 |
) |
|
1,732 |
Canada |
109 |
|
2 |
|
— |
|
|
111 |
Total Bath & Body
Works |
1,802 |
|
72 |
|
(31 |
) |
|
1,843 |
|
|
|
|
|
|
|
|
|
Total Partner-Operated Stores:
|
Stores |
|
|
|
|
|
Stores |
|
1/28/2023 |
|
Opened |
|
Closed |
|
10/28/2023 |
International |
401 |
|
39 |
|
(10 |
) |
|
430 |
International - Travel
Retail |
26 |
|
2 |
|
— |
|
|
28 |
Total
International |
427 |
|
41 |
|
(10 |
) |
|
458 |
|
|
|
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
(In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Year-to-Date |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net Sales |
$ |
1,562 |
|
|
$ |
1,604 |
|
|
$ |
4,517 |
|
|
$ |
4,672 |
|
Costs of Goods Sold, Buying
and Occupancy |
|
(880 |
) |
|
|
(926 |
) |
|
|
(2,618 |
) |
|
|
(2,666 |
) |
Gross Profit |
|
682 |
|
|
|
678 |
|
|
|
1,899 |
|
|
|
2,006 |
|
General, Administrative and
Store Operating Expenses |
|
(461 |
) |
|
|
(476 |
) |
|
|
(1,310 |
) |
|
|
(1,282 |
) |
Operating Income |
|
221 |
|
|
|
202 |
|
|
|
589 |
|
|
|
724 |
|
Interest Expense |
|
(84 |
) |
|
|
(86 |
) |
|
|
(259 |
) |
|
|
(262 |
) |
Other Income |
|
22 |
|
|
|
3 |
|
|
|
68 |
|
|
|
7 |
|
Income Before Income
Taxes |
|
159 |
|
|
|
119 |
|
|
|
398 |
|
|
|
469 |
|
Provision for Income
Taxes |
|
40 |
|
|
|
28 |
|
|
|
99 |
|
|
|
103 |
|
Net Income |
$ |
119 |
|
|
$ |
91 |
|
|
$ |
299 |
|
|
$ |
366 |
|
|
|
|
|
|
|
|
|
Net Income per Diluted
Share |
$ |
0.52 |
|
|
$ |
0.40 |
|
|
$ |
1.31 |
|
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
Weighted Average Diluted
Shares Outstanding |
|
228 |
|
|
|
229 |
|
|
|
229 |
|
|
|
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
CONSOLIDATED CONDENSED BALANCE SHEETS |
(Unaudited) |
(In millions) |
|
|
October 28,2023 |
|
October 29,2022 |
ASSETS |
|
|
|
Current
Assets: |
|
|
|
Cash and Cash Equivalents |
$ |
412 |
|
|
$ |
295 |
|
Accounts Receivable, Net |
|
197 |
|
|
|
242 |
|
Inventories |
|
1,205 |
|
|
|
1,269 |
|
Other |
|
145 |
|
|
|
142 |
|
Total
Current Assets |
|
1,959 |
|
|
|
1,948 |
|
Property
and Equipment, Net |
|
1,244 |
|
|
|
1,121 |
|
Operating Lease Assets |
|
1,067 |
|
|
|
1,074 |
|
Goodwill |
|
628 |
|
|
|
628 |
|
Trade
Name |
|
165 |
|
|
|
165 |
|
Deferred
Income Taxes |
|
35 |
|
|
|
41 |
|
Other
Assets |
|
145 |
|
|
|
156 |
|
Total
Assets |
$ |
5,243 |
|
|
$ |
5,133 |
|
LIABILITIES AND EQUITY (DEFICIT) |
|
|
|
Current
Liabilities: |
|
|
|
Accounts Payable |
$ |
627 |
|
|
$ |
632 |
|
Accrued Expenses and Other |
|
590 |
|
|
|
645 |
|
Current Operating Lease Liabilities |
|
192 |
|
|
|
175 |
|
Total
Current Liabilities |
|
1,409 |
|
|
|
1,452 |
|
Deferred
Income Taxes |
|
167 |
|
|
|
158 |
|
Long-term Debt |
|
4,497 |
|
|
|
4,860 |
|
Long-term Operating Lease Liabilities |
|
1,020 |
|
|
|
1,039 |
|
Other
Long-term Liabilities |
|
274 |
|
|
|
232 |
|
Total
Equity (Deficit) |
|
(2,124 |
) |
|
|
(2,608 |
) |
Total
Liabilities and Equity (Deficit) |
$ |
5,243 |
|
|
$ |
5,133 |
|
|
|
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
(In millions) |
|
|
Year-to-Date |
|
|
2023 |
|
|
|
2022 |
|
Operating Activities: |
|
|
|
Net
Income |
$ |
299 |
|
|
$ |
366 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities: |
|
|
|
Depreciation of Long-lived Assets |
|
199 |
|
|
|
162 |
|
Share-based Compensation Expense |
|
29 |
|
|
|
26 |
|
Gain on Extinguishment of Debt |
|
(28 |
) |
|
|
— |
|
Changes
in Assets and Liabilities: |
|
|
|
Accounts Receivable |
|
29 |
|
|
|
(3 |
) |
Inventories |
|
(499 |
) |
|
|
(563 |
) |
Accounts Payable, Accrued Expenses and Other |
|
117 |
|
|
|
185 |
|
Income Taxes Payable |
|
(114 |
) |
|
|
(57 |
) |
Other Assets and Liabilities |
|
(4 |
) |
|
|
(49 |
) |
Net Cash
Provided by Operating Activities |
$ |
28 |
|
|
$ |
67 |
|
|
|
|
|
Investing Activities: |
|
|
|
Capital
Expenditures |
$ |
(250 |
) |
|
$ |
(252 |
) |
Other
Investing Activities |
|
11 |
|
|
|
— |
|
Net Cash
Used for Investing Activities |
$ |
(239 |
) |
|
$ |
(252 |
) |
|
|
|
|
Financing Activities: |
|
|
|
Payments
for Long-term Debt |
$ |
(343 |
) |
|
$ |
— |
|
Repurchases of Common Stock |
|
(99 |
) |
|
|
(1,312 |
) |
Dividends Paid |
|
(137 |
) |
|
|
(140 |
) |
Tax Payments related to
Share-based Awards |
|
(10 |
) |
|
|
(32 |
) |
Other
Financing Activities |
|
(20 |
) |
|
|
(15 |
) |
Net Cash
Used for Financing Activities |
$ |
(609 |
) |
|
$ |
(1,499 |
) |
|
|
|
|
Effects of Exchange Rate
Changes on Cash and Cash Equivalents |
$ |
— |
|
|
$ |
— |
|
Net
Decrease in Cash and Cash Equivalents |
|
(820 |
) |
|
|
(1,684 |
) |
Cash and
Cash Equivalents, Beginning of Year |
|
1,232 |
|
|
|
1,979 |
|
Cash and
Cash Equivalents, End of Period |
$ |
412 |
|
|
$ |
295 |
|
|
|
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
ADJUSTED FINANCIAL INFORMATION |
(Unaudited) |
(In millions, except per share amounts) |
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Year-to-Date |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Reconciliation of Reported Net Income to Adjusted Net
Income |
Reported Net Income |
$ |
119 |
|
|
$ |
91 |
|
$ |
299 |
|
|
$ |
366 |
Gain on Extinguishment of
Debt |
|
(12 |
) |
|
|
— |
|
|
(28 |
) |
|
|
— |
Tax Effect of Gain on
Extinguishment of Debt |
|
3 |
|
|
|
— |
|
|
7 |
|
|
|
— |
Adjusted Net Income |
$ |
110 |
|
|
$ |
91 |
|
$ |
278 |
|
|
$ |
366 |
|
|
|
|
|
|
|
|
Reconciliation of Reported Earnings Per Diluted Share to
Adjusted Earnings Per Diluted Share |
Reported Earnings Per Diluted
Share |
$ |
0.52 |
|
|
$ |
0.40 |
|
$ |
1.31 |
|
|
$ |
1.56 |
Gain on Extinguishment of
Debt |
|
(0.05 |
) |
|
|
— |
|
|
(0.12 |
) |
|
|
— |
Tax Effect of Gain on
Extinguishment of Debt |
|
0.01 |
|
|
|
— |
|
|
0.03 |
|
|
|
— |
Adjusted Earnings Per Diluted
Share |
$ |
0.48 |
|
|
$ |
0.40 |
|
$ |
1.21 |
|
|
$ |
1.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Reconciliation of GAAP Financial
Measures to Non-GAAP Financial Measures.
BATH & BODY WORKS, INC. |
ADJUSTED FORECASTED FINANCIAL INFORMATION |
(Unaudited) |
|
|
|
|
|
Full-Year |
|
|
2023 |
|
Reconciliation of Forecasted Earnings Per Diluted Share to
Adjusted Forecasted Earnings Per Diluted Share |
|
Low |
|
High |
Forecasted Earnings Per Diluted Share |
$ |
2.99 |
|
|
$ |
3.19 |
|
Gain on Extinguishment of
Debt |
|
(0.12 |
) |
|
|
(0.12 |
) |
Tax Effect of Gain on
Extinguishment of Debt |
|
0.03 |
|
|
|
0.03 |
|
Adjusted Forecasted Earnings
Per Diluted Share |
$ |
2.90 |
|
|
$ |
3.10 |
|
|
|
|
|
|
|
|
|
The company’s forecast excludes the impact of any
future debt or share repurchase activity.
See Notes to Reconciliation of GAAP Financial
Measures to Non-GAAP Financial Measures.
|
BATH & BODY WORKS, INC. |
NOTES TO RECONCILIATION OF GAAP FINANCIAL
MEASURES |
TO
NON-GAAP FINANCIAL MEASURES |
(Unaudited) |
|
The “Adjusted Financial Information” provided in
the attached reflects the following non-GAAP financial
measures:
Fiscal 2023
In the third quarter of 2023, adjusted results exclude a:
- $12 million pre-tax
gain ($9 million net of tax of $3 million), included in other
income, associated with the early extinguishment of outstanding
notes.
In the second quarter of 2023, adjusted results exclude a:
- $9 million pre-tax
gain ($7 million net of tax of $2 million), included in other
income, associated with the early extinguishment of outstanding
notes.
In the first quarter of 2023, adjusted results exclude a:
- $7 million pre-tax
gain ($5 million net of tax of $2 million), included in other
income, associated with the early extinguishment of outstanding
notes.
Forecasted full-year 2023 adjusted results exclude the
following:
- A $28 million
pre-tax gain ($21 million net of tax of $7 million), included in
other income year-to-date through the third quarter of 2023,
associated with the early extinguishment of outstanding notes.
- The impact of any
future debt or share repurchase activity.
Fiscal 2022
In the first, second and third quarters of 2022, there were no
adjustments to results.
The adjusted financial information should not be construed as an
alternative to the results determined in accordance with generally
accepted accounting principles. Further, the company’s definitions
of adjusted income information may differ from similarly titled
measures used by other companies. Management believes that the
presentation of adjusted financial information provides additional
information to investors to facilitate the comparison of past and
present operations. While it is not possible to predict future
results, management believes the adjusted financial information is
useful for the assessment of the operations of the company because
the adjusted items are not indicative of the company’s ongoing
operations due to their size and nature. Additionally, management
uses adjusted financial information as key performance measures for
the purpose of evaluating performance internally. The adjusted
financial information should be read in conjunction with the
company’s historical financial statements and notes thereto
contained in the company’s Quarterly Reports on Form 10-Q and
Annual Report on Form 10-K.
“Total international system-wide retail sales” means the net
sales of all Bath & Body Works stores and digital channels
located outside North America and owned and/or operated by the
company’s franchise, license and wholesale partners. While total
international system-wide retail sales are not recorded as net
sales by the company, management believes the information is
important in understanding the company’s financial performance
because these sales are the basis on which the company calculates
and records certain net sales for its International business and
are indicative of the financial health of the company’s franchise,
license and wholesale partners and the prospects for growth of the
company’s International business.
Bath & Body Works (NYSE:BBWI)
Gráfico Histórico do Ativo
De Mai 2024 até Jun 2024
Bath & Body Works (NYSE:BBWI)
Gráfico Histórico do Ativo
De Jun 2023 até Jun 2024