Bubble Over, Competition! Bath & Body Works Ups The Ante In Profitability Game

Telsey Advisory Group analyst Dana Telsey reiterated an Outperform rating on the shares of Bath & Body Works Inc BBWI with a price target of $52.
BBWI reported 1Q23 EPS of $0.33 versus $0.64 last year, coming in ahead of the consensus of $0.26 and guidance of $0.17-$0.27.
The analysts said that the earnings upside was largely driven by better-than-expected gross margin deleverage, while sales also came ahead of the consensus.
Below the topline, ongoing work to improve merchandise margins helped drive the stronger gross margin, while expenses remain well-controlled, added the analyst.
Following a strong Q1, BBWI raised its annual EPS outlook, an encouraging sign given ongoing macro challenges, particularly when compared to many retail peers that have recently reported.
While Q2 EPS guidance appears conservative, touching consensus at the high-end, the analyst views this approach as prudent given near-term uncertainties.
Overall, the analyst continues to see BBWI as an established brand with a loyal customer base within an increasingly attractive consumer space characterized by strong purchase frequency of a consumable category.
With the recent rollout of its new loyalty program, increased investments in infrastructure and systems, and efforts to streamline operations and the organization, the analyst thinks the company can build a stronger foundation to drive incremental growth and profitability longer term.
Price Action: BBWI shares are trading higher by 8.88% at $37.04 on the last check Thursday.

Market News and Data brought to you by Benzinga APIs

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Comments