Bath & Body Works Reports 1.6% Decline in Net Sales for Fiscal Year Ending February 1, 2025

Bath & Body Works, Inc. reported a slight decline in financial performance for the fiscal year ending February 1, 2025, with net sales decreasing by $122 million, or 1.6%, to $7.307 billion compared to the previous year. The decrease was attributed to the absence of a 53rd week that had benefited the prior fiscal year, as well as a decline in international sales, particularly due to reduced wholesale shipments linked to geopolitical tensions in the Middle East. Operating income also fell by $19 million, or 1%, to $1.266 billion, maintaining an operating income rate of 17.3%. The gross profit rate improved to 44.3%, driven by better merchandise margins, although this was offset by increased general and administrative expenses.

In terms of strategic developments, Bath & Body Works focused on enhancing its operational foundation and expanding its product offerings. The company launched a new line of fine fragrance mists called "Everyday Luxuries" and continued to grow its active loyalty program, which reached approximately 39 million members by the end of the fiscal year. The loyalty program has proven effective, with nearly 80% of U.S. sales coming from loyalty members. The company also expanded its store footprint, opening 106 new locations while closing 61, resulting in a total of 1,895 company-operated stores as of February 1, 2025.

Operationally, Bath & Body Works reported a total employee headcount of approximately 59,200, with 94% of associates working in stores. The company has shifted its focus towards off-mall locations, with 57% of its North American store fleet now situated in these areas, a strategy aimed at reducing reliance on traditional mall traffic. The company also emphasized its digital presence, enhancing its e-commerce capabilities and integrating technology to improve customer engagement and personalization.

Looking ahead, Bath & Body Works anticipates continued macroeconomic pressures and does not expect significant improvements in consumer sentiment in 2025. However, the company remains optimistic about its growth strategy, which includes ongoing product innovation and international expansion. The management is committed to maintaining a continuous improvement mindset to manage costs and enhance operational efficiencies, with plans to invest savings back into marketing and technology to drive long-term growth. The company expects to achieve a modest increase in North American square footage in the coming year, projecting growth of 2% to 3%.