Bath & Body Works Reports 3% Sales Increase and Decline in Net Income for Q3 2024

Bath & Body Works, Inc. reported a net sales increase of 3.0% for the third quarter of 2024, reaching $1.610 billion compared to $1.562 billion in the same period last year. The company's gross profit for the quarter was $700 million, up from $682 million in the prior year, although the gross profit margin slightly decreased to 43.5% from 43.6%. Net income for the quarter was $106 million, or $0.49 per diluted share, down from $119 million, or $0.52 per diluted share, in the third quarter of 2023. Year-to-date, the company reported net sales of $4.520 billion, nearly flat compared to $4.517 billion in the previous year, with net income increasing to $345 million from $299 million.

The company experienced a decline in international sales, which fell by $8 million, or 11.1%, primarily due to reduced wholesale shipments to franchise partners affected by geopolitical tensions. In contrast, North American sales benefited from new store openings and a favorable shift in the fiscal calendar, which added approximately 200 basis points to sales growth. Bath & Body Works has also focused on cost optimization, targeting $300 million in annual savings, with approximately $150 million already achieved in fiscal 2023 and an additional $150 million expected in fiscal 2024.

Operationally, Bath & Body Works expanded its store count, with 1,773 stores in the U.S. and Canada as of November 2, 2024, up from 1,739 at the beginning of the fiscal year. The company also reported a total of 510 international stores, reflecting a net increase of 41 stores year-to-date. The average store size and sales per square foot metrics indicate stable performance, although direct sales through e-commerce channels saw a decline, attributed to customers opting for in-store pickup options.

The company’s balance sheet showed total assets of $4.984 billion, down from $5.463 billion at the beginning of the fiscal year, primarily due to a decrease in cash and cash equivalents, which fell to $191 million from $1.084 billion. Long-term debt decreased to $3.883 billion from $4.388 billion, reflecting the company's strategy to repurchase and extinguish outstanding senior notes. Bath & Body Works continues to maintain a strong liquidity position, supported by its asset-backed revolving credit facility, which had $740 million available as of the reporting date.

Looking ahead, Bath & Body Works aims to drive revenue growth through product innovation and expansion into new categories, including men’s and hair care products. The company plans to enhance customer engagement through marketing investments and loyalty programs while continuing its focus on operational efficiency. The competitive retail environment and changing consumer behaviors remain challenges, but the company is optimistic about its strategic initiatives and cost-saving measures to support future growth.