Bath & Body Works Posts Strong Q3 Results; Street Says Buy

Specialty retailer Bath & Body Works, Inc. (BBWI) has reported stronger-than-expected results for the third quarter ended October 30, 2021. The robust results were on the back of revenue and earnings surpassing estimates.

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Following the results, shares of the company rose 2.9% to close at $76.75 in Wednesday’s extended trade.

Revenue & Earnings

Quarterly net sales during the quarter declined 1.3% year-over-year to $1.68 billion but surpassed the consensus estimate of $1.41 billion. A year-over-year increase of 3% and 36.7% in Stores sales and International sales, respectively, was offset by a decline of 17.3% in Direct sales.

The company reported quarterly earnings per share (EPS) of $0.92, up 10.8% year-over-year. Moreover, the figure comfortably surpassed the consensus estimate of $0.52 per share.

Other Operating Metrics

In other operating metrics, the count of company-operated stores at the end of the quarter stood at 1,775. Partner-operated stores at the end of the quarter stood at 312.

Guidance

For the fourth quarter, the company expects EPS to be between $2.10 and $2.25 against the consensus estimate of $1.90 per share.

Management Commentary

The CEO of Bath & Body Works, Andrew Meslow, said, “This performance was driven by ongoing strong customer response to our merchandise assortment, a growing, loyal customer base and the exceptional efforts of our associates. As we head into the important Holiday season, our mostly domestic supply chain and market leadership in key categories position us well to deliver continued growth.”

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Price Target

On November 17, B.Riley Financial analyst Susan Anderson reiterated a Buy rating on the stock. The analyst, however, raised the price target from $78 to $86, which implies upside potential of 15.3% from current levels.

Consensus among analysts is a Strong Buy based on 11 Buys and 1 Hold. The average Bath & Body Works price target of $83.92 implies upside potential of 12.5% from current levels. Shares have gained 174.7% over the past year.

TipRanks Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Bath & Body Works’ performance this quarter.

According to the tool, the website of Bath & Body Works recorded a 19.29% monthly fall in global visits in October.