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Bath & Body Works Inc - Stock Quote BBWI

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Morningstar's Bath & Body Works Inc Stock Analysis

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Is it the right time to buy or sell?

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Economic Moat

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Transitory Costs Hit Near-Term Profitability at Bath and Body Works, but Long Term Remains Promising

Jaime M. Katz, CFA Senior Equity Analyst

Business Strategy and Outlook

| Jaime M. Katz, CFA |

We believe Bath & Body Works has carved out a solid competitive edge in the sizable addressable markets it operates in. The company’s strong brand intangible asset is supported by its leadership position across the bath and shower and candle air freshener industries in recent years, which has been bolstered by BBW’s quick response to consumer trends. Quantitatively, the narrow moat is reinforced by a 66% average return on invested capital excluding goodwill that we expect the business to generate over the next decade, well ahead of our 8% weighted average cost of capital estimate.

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Bath & Body Works Inc's Company Profile

Business Description

Bath & Body Works is a specialty home fragrance and fragrant body care retailer operating under the Bath & Body Works, C.O. Bigelow, and White Barn brands. The company generates most of its business in North America, with less than 5% of sales from international markets in fiscal 2021. For fiscal 2021, 72% of sales stemmed from the brick-and-mortar network (which is composed of more than 1,700 retail stores), up from 65% in 2020, as consumer shopping patterns began to return to normal. Future growth is expected from store reformatting, digital and international channels, as well as new category expansion.

Contact
Three Limited Parkway
Columbus, OH, 43230
T +1 614 415-7000
Sector Consumer Cyclical
Industry Specialty Retail
Most Recent Earnings Apr 30, 2022
Fiscal Year End Jan 29, 2023
Stock Type Cyclical
Employees 56,900

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