Bath & Body Works, Inc. (NYSE: BBWI) today reported third
quarter 2022 results.
Sarah Nash, Executive Chair and Interim Chief
Executive Officer, said “We are pleased to have delivered
better-than-anticipated bottom-line performance as the team
remained focused on innovation and newness, continued to leverage
our vertically integrated supply chain to chase into key winners,
and took aggressive action to control costs and improve overall
efficiencies. We are delighted with the pace and enrollment in our
recently launched loyalty program. We continue to be mindful of the
challenging environment and inflationary pressure affecting our
customers and our business.”
Nash continued, “Looking forward through the
remainder of the year and beyond, we are pleased with our
assortment – a great mix of returning holiday favorites and new
giftable offerings. We are continuing to stay close to our
customer, and we remain disciplined in our expense and inventory
management. Long-term, we are confident in the fundamentals and
potential of our business, and we are excited for Bath & Body
Works’ next growth chapter as we officially welcome global personal
care and beauty industry veteran, Gina Boswell, as the company’s
next Chief Executive Officer in December.”
Third Quarter 2022 ResultsThe
company reported net sales of $1.60 billion for the third quarter
ended Oct. 29, 2022, a decrease of 5% compared to net sales of
$1.68 billion for the third quarter ended Oct. 30, 2021, but an
increase of 46% compared to the third quarter of 2019.
The company reported earnings from continuing
operations per diluted share of $0.40 for the third quarter ended
Oct. 29, 2022, compared to $0.66 for the quarter ended Oct. 30,
2021. Third quarter operating income was $201.8 million compared to
$408.5 million last year, and net income from continuing operations
was $91.0 million compared to $177.1 million last year.
Reported 2021 results from continuing operations
include a pre-tax loss of $89.1 million ($67.7 million net of tax,
or $0.25 per diluted share) associated with the early
extinguishment of debt.
On an adjusted basis, which excludes the above
charge in 2021, third quarter 2022 earnings from continuing
operations per diluted share were $0.40 compared to $0.92 last
year, and net income from continuing operations was $91.0 million
compared to $244.8 million last year.
At the conclusion of this press release is a
reconciliation of reported-to-adjusted results, including a
description of the significant item.
2022 OutlookThe company is
committed to managing and forecasting the business prudently. The
company is forecasting fourth quarter earnings from continuing
operations per diluted share between $1.45 and $1.65. For fiscal
2022, the company is forecasting earnings from continuing
operations per diluted share between $3.00 and $3.20, compared to
its prior full year forecast of $2.70 to $3.00.
Earnings Call and Additional
InformationAdditional third quarter financial information,
including management commentary, is currently available
at www.BBWInc.com. Bath & Body Works, Inc. will
conduct its third quarter earnings call at 9:00
a.m. Eastern on Nov. 17. To listen, call 1.888.946.7609
(international dial-in number: 1.517.308.9411); conference ID
6362067. For an audio replay, call 1.800.841.8615
(international replay number: 1.203.369.3833); conference ID
6362067 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 the #1 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 1,785 company-operated Bath & Body Works locations in
the U.S. and Canada and more than 390 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” 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, 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 COVID-19 pandemic has had and may continue to have an
adverse effect on our business and results of operations;
- 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;
- difficulties arising from turnover in company leadership or
other key positions;
- our ability to attract, develop and retain qualified associates
and manage labor-related costs;
- 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 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 brands, 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, 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 or refinance our debt and maintain
compliance with our restrictive covenants;
- the impact of the transition from London Interbank Offered Rate
and our ability to adequately manage such transition;
- 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 2021 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 Relations
InvestorRelations@bbw.com
Media RelationsTammy Roberts MyersCommunications@bbw.com
BATH & BODY WORKS,
INC.THIRD QUARTER 2022
Total Sales from Continuing Operations
(Millions):
|
ThirdQuarter 2022 |
|
ThirdQuarter 2021 |
|
%Inc/(Dec) |
|
Year-to-Date 2022 |
|
Year-to-Date 2021 |
|
%Inc/(Dec) |
|
|
|
|
|
|
|
|
|
|
|
|
Stores – U.S. and Canada |
$ |
1,178.2 |
|
$ |
1,237.9 |
|
(4.8 |
%) |
|
$ |
3,397.7 |
|
$ |
3,517.9 |
|
(3.4 |
%) |
Direct –
U.S. and Canada |
|
345.5 |
|
|
369.3 |
|
(6.4 |
%) |
|
|
1,029.9 |
|
|
1,125.6 |
|
(8.5 |
%) |
International1 |
|
80.8 |
|
|
73.7 |
|
9.6 |
% |
|
|
244.3 |
|
|
210.6 |
|
16.0 |
% |
Total Bath & Body Works |
$ |
1,604.5 |
|
$ |
1,680.9 |
|
(4.5 |
%) |
|
$ |
4,671.9 |
|
$ |
4,854.1 |
|
(3.8 |
%) |
1 – Results include royalties associated with franchised stores
and wholesale sales.
Total Company-Operated Stores:
|
Stores 1/29/22 |
Opened |
Closed |
Stores 10/29/22 |
|
|
|
|
|
|
|
|
|
|
United States |
1,651 |
64 |
(34 |
) |
1,681 |
Canada |
104 |
2 |
- |
|
106 |
Total Bath & Body
Works |
1,755 |
66 |
(34 |
) |
1,787 |
Total Partner-Operated Stores:
|
Stores 1/29/22 |
Opened |
Closed |
Stores 10/29/22 |
|
|
|
|
|
International |
317 |
59 |
(3 |
) |
373 |
International – Travel Retail |
21 |
1 |
(1 |
) |
21 |
Total International |
338 |
60 |
(4 |
) |
394 |
|
|
|
|
|
BATH & BODY WORKS, INC. |
CONSOLIDATED STATEMENTS OF INCOME |
THIRTEEN WEEKS ENDED OCTOBER 29, 2022 AND OCTOBER 30,
2021 |
(Unaudited) |
(In thousands except per share amounts) |
|
|
|
|
|
|
|
|
2022 |
|
|
|
2021 |
|
Net Sales |
$ |
1,604,461 |
|
|
$ |
1,680,905 |
|
Costs of Goods Sold, Buying and Occupancy |
|
(926,870 |
) |
|
|
(842,149 |
) |
Gross Profit |
|
677,591 |
|
|
|
838,756 |
|
General, Administrative and Store Operating Expenses |
|
(475,816 |
) |
|
|
(430,258 |
) |
Operating Income |
|
201,775 |
|
|
|
408,498 |
|
Interest Expense |
|
(86,484 |
) |
|
|
(90,761 |
) |
Other Income (Loss) |
|
3,442 |
|
|
|
(90,773 |
) |
|
|
|
|
|
Income from Continuing Operations before Income Taxes |
|
118,733 |
|
|
|
226,964 |
|
Provision for Income Taxes |
|
27,708 |
|
|
|
49,910 |
|
Net Income from Continuing Operations |
|
91,025 |
|
|
|
177,054 |
|
Loss from Discontinued Operations, Net of Tax |
|
- |
|
|
|
(89,249 |
) |
|
|
|
|
|
Net Income |
$ |
91,025 |
|
|
$ |
87,805 |
|
|
|
|
|
|
Net Income (Loss) Per Diluted Share |
|
|
|
|
Continuing Operations |
$ |
0.40 |
|
|
$ |
0.66 |
|
|
Discontinued Operations |
|
- |
|
|
|
(0.33 |
) |
Total Net Income Per Diluted Share |
$ |
0.40 |
|
|
$ |
0.33 |
|
|
|
|
|
|
Weighted Average Diluted Shares Outstanding |
|
229,144 |
|
|
|
266,994 |
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
CONSOLIDATED STATEMENTS OF INCOME |
THIRTY-NINE WEEKS ENDED OCTOBER 29, 2022 AND OCTOBER 30,
2021 |
(Unaudited) |
(In thousands except per share amounts) |
|
|
|
|
|
|
|
|
2022 |
|
|
|
2021 |
|
Net Sales |
$ |
4,671,874 |
|
|
$ |
4,854,110 |
|
Costs of Goods Sold, Buying and Occupancy |
|
(2,666,343 |
) |
|
|
(2,445,187 |
) |
Gross Profit |
|
2,005,531 |
|
|
|
2,408,923 |
|
General, Administrative and Store Operating Expenses |
|
(1,281,927 |
) |
|
|
(1,279,009 |
) |
Operating Income |
|
723,604 |
|
|
|
1,129,914 |
|
Interest Expense |
|
(261,588 |
) |
|
|
(301,146 |
) |
Other Income (Loss) |
|
6,603 |
|
|
|
(196,191 |
) |
|
|
|
|
|
Income from Continuing Operations before Income Taxes |
|
468,619 |
|
|
|
632,577 |
|
Provision for Income Taxes |
|
102,677 |
|
|
|
149,910 |
|
Net Income from Continuing Operations |
|
365,942 |
|
|
|
482,667 |
|
Income from Discontinued Operations, Net of Tax |
|
- |
|
|
|
255,945 |
|
|
|
|
|
|
Net Income |
$ |
365,942 |
|
|
$ |
738,612 |
|
|
|
|
|
|
Net Income Per Diluted Share |
|
|
|
|
Continuing Operations |
$ |
1.56 |
|
|
$ |
1.74 |
|
|
Discontinued Operations |
|
- |
|
|
|
0.92 |
|
Total Net Income Per Diluted Share |
$ |
1.56 |
|
|
$ |
2.67 |
|
|
|
|
|
|
Weighted Average Diluted Shares Outstanding |
|
234,483 |
|
|
|
277,153 |
|
|
|
|
|
|
|
BATH & BODY WORKS, INC. |
|
ADJUSTED FINANCIAL INFORMATION FROM CONTINUING
OPERATIONS |
|
(Unaudited) |
|
(In thousands except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Year-to-Date |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
2021 |
|
|
Reconciliation of Reported Net Income from Continuing
Operations to Adjusted Net Income from Continuing
Operations |
|
|
|
|
|
|
|
|
Reported Net Income from Continuing Operations |
|
$ |
91,025 |
|
|
$ |
177,054 |
|
|
$ |
365,942 |
|
$ |
482,667 |
|
|
Loss on Extinguishment of Debt |
|
|
- |
|
|
|
89,146 |
|
|
|
- |
|
|
194,610 |
|
|
Tax Benefit of Loss on Extinguishment of Debt |
|
|
- |
|
|
|
(21,417 |
) |
|
|
- |
|
|
(46,754 |
) |
|
Adjusted Net Income from Continuing Operations |
|
$ |
91,025 |
|
|
$ |
244,783 |
|
|
$ |
365,942 |
|
$ |
630,523 |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Reported Earnings from Continuing
Operations Per Diluted Share to Adjusted Earnings from Continuing
Operations Per Diluted Share |
|
|
|
|
|
Reported Earnings from Continuing Operations Per Diluted Share |
|
$ |
0.40 |
|
|
$ |
0.66 |
|
|
$ |
1.56 |
|
$ |
1.74 |
|
|
Loss on Extinguishment of Debt |
|
|
- |
|
|
|
0.25 |
|
|
|
- |
|
|
0.53 |
|
|
Adjusted Earnings from Continuing Operations Per Diluted Share |
|
$ |
0.40 |
|
|
$ |
0.92 |
|
|
$ |
1.56 |
|
$ |
2.28 |
|
|
|
|
|
|
|
|
|
|
|
|
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 from Continuing Operations”
provided in the attached reflects the following non-GAAP financial
measures:
Fiscal 2022
In the first, second and third quarters of 2022, there were no
adjustments to results.
Fiscal 2021
In the third quarter of 2021, adjusted results exclude the
following:
- An $89.1 million pre-tax loss ($67.7 million net of tax of
$21.4 million), included in other income (loss), associated with
the early extinguishment of outstanding notes.
In the second quarter of 2021, there were no adjustments to
results.
In the first quarter of 2021, adjusted results exclude the
following:
- A $105.5 million pre-tax loss ($80.1 million net of tax of
$25.4 million), included in other income (loss), associated with
the early extinguishment of outstanding notes.
The Adjusted Financial Information from
Continuing Operations should not be construed as an alternative to
the reported 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 ongoing 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 of results of operations for the purpose of evaluating
performance internally. The Adjusted Financial Information from
Continuing Operations 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.
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