BBWI - Earnings call transcript Q1 2025

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Operator

Good morning. My name is Donna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bath & Body Works First Quarter 2024 Earnings Conference Call. Please be advised that today's conference is being recorded. [Operator Instructions]

the Relations. to turn Head McGuire, now Investor of will call Mike over Interim I may you Mike, begin.

Michael McGuire

and Body XXXX Works morning, First Good welcome Quarter Earnings to Conference Bath & Call.

Executive call Boratto, Eva Financial Officer. Gina on Retail; Chief today me Rosen, President the Boswell, Joining Chief Officer; Julie and are

figures In this in related information the in and this prepared remarks call our morning's have some release, we regarding summarizes addition a website slide and expectations. statements and may that to performance to addition facts providing certain posted contain events presentation related and guidance. Today's press on operating our these future to call forward-looking

release factors please the in Form Bath For measures. important measure. differ statements, refer to to reconciliations non-GAAP Form results be & Body most financial this risk to factors Works' this XX-Q, contains release the call and on could which comparable as to report that XXXX the our press certain supplemental today. Today's morning's will end quarterly measures, actual Please GAAP well forward-looking including refer regarding materially of from such XX-K these and filed materials financial press the at cause morning's disclosures for as

XX XX, I'll May the X, over which are year ended XX know, ended the is call category a versus of are on to to As which X, a the selling comparable the during weeks turn discussed is ended share the basis, reported and the XXXX XX metrics May XXXX. All results, other the XX was X, fiscal on data now weeks results of XXXX. With discussed you the market the best sense XXXX May call sales versus provide April all weeks weeks Gina. XX-week health business, loyalty calendar that, ended XXXX, metrics basis, a

Gina Boswell

same we continued and to performance. the joining against better-than-expected our report Today, execution, you, anticipated and Through our priorities, are time, second QX the managing earnings sales building everyone. all sales We you profitability our us. toward strategic morning, appreciate in half. pleased strong Thank Mike, our at growth good we to progress and return

Before tireless possible our me who to dynamic a sales our pleased of service say our the of of outperformance deliver first first exceptional results. details, billion the year, above was end down consistently were be deliver prior while without in would $X.X QX to environment into X.X% into get from not We dedication delivers remaining I high to goals. Jumping quarter the team, that customers, the our nimble in let tremendous the our which guidance. net

First per earnings was diluted the up quarter which above was $X.XX guidance. EPS, prior from our share year's adjusted XX% of

we've end our lines, high midpoint and better-than-expected results the our full details in the our year mind are a remain first Keeping narrowed share in raising in will With dynamic and more consumer both bottom for Eva each. to that for approach top guidance. we the ranges the maintaining still it's early while environment, a we prudent in taking later. year, spending the guidance quarter,

QX shifting the to drove back what on me color let our performance. Now quarter, some provide

new Of customer compelling course, level the that marketing brought we to response product the it newness and the of them, starts and build their introductions with favorable brand. innovation to with and activities

we we're stores, out laundry such fall. all these roll to adjacencies and the business. We're contributing We lip North are of men's, to to newer in grow lip as fixtures more and our all all continue U.S. accelerating stores to American to see hair, to late excited and our laundry nearly continuing

hit starting new brand growth, Bridgerton. core collaboration with efforts part with their our of we As to series, a Netflix, our drive introduced

with of quarter, traffic by the conversion driven these manage with expectations, resonating our were with customers. see in of unit performance flat. At a versus retails candles, prior light with for for drive bit has year-over-year set the to luxury traffic of the that abundance to as fragrance Julie were are quarter's data, X% flat. quarter, up we wasn't market We category brand with delighted we declined demonstrated decline size. will customers Average of a Consistent consistent products. The viral some our in the transactions help everyday with with channel Together, expectation our continued. dual the generated which customers also the on carefully Overall collection, love buzz line spending, promotion which new touch leveraged their launched floor we by continuing in macro a later. performed basket home level beginning normalization external pressured that

we off share the we AURs eased quarter. achieve grew, which unit progressed flat quarter a the and to us market half overall. allowed in of perspective, promotions, maintained strong the demand From back our share As

near-term international Our of outside attractive pillar related strategy, and business our are to the remain in committed markets Despite was softness. this pressure, and growing international America. the we given war Middle pressured an North overall East

including in franchise store During opened our we opened with in new the partner, partners our in our week, London. South our stand-alone quarter, Korea. together And first markets, stores just first last store

markets year. is add stores plan XX at net international Our to least new this in

efforts year, experience extending customers, Bath enabling our and reach, been As XX%. progress established, Bath operational & our enhancing on seamless efforts past foundation Works that and driving know, our and the and product, to have with already centered sales Body engaging you strong positive efficiency. Building brand $XX our are margins Body billion over had a in our Works excellence path & the the elevating along upon team's of operating omnichannel

investments technology marketing our which to and fuel initiatives Last highlighted we're growth. several I making in quarter, important

experience. and on brand key more potential focus for sustained the would generate goal omnichannel fragrance work, is Simply customership. with among often our the to to love this current quarter, more to to of more demand the in This growth we customers amazing refers drive and like a business. I of essentially Customership our to success indicator put, customers call which assortment we and bring the

their seeing is with Body likelihood brand Brand Bath we're essential the and we the on awareness introduction beginning to by new With seen our last among the results And in Early to saw and first the new customer quarter XX% performance to more and trends customer driving efforts to the improved response count attracting compared of the first alike. were continue customership often generated be our their fragrance part These quarter most marketing such versus brand XX lead reactivated us innovation, quarter we within of of our on up also to engagement by consider year. of and net with us to marketing of fashionistas. to see to nearly XXXX, brand encouraged retention improvement self-expression, in our impressions our from recommend build. customers the fragrance shop been rise. Hand-in-hand customers quarter. Works a with have year, percentage prior equities on as more were have most love on improving trend extremely customers saw invested and loyalty. points The promising we per our focus segment, promising. QX the fulsome in in better when funnel top-of-mind and visiting efforts newness in trend supported key customers of an approximately We fueled evidenced identity and new which call our by brand. We existing, full approach greater approach customers average XX% in they're valued our Xx customers in existing year,

XX% end year-over-year of XX% sales. The As ratings quarter, and within had the membership. loyalty of they approximately we more to million, an XX satisfaction its active increased program boasted XX% drove our about by the our than also of first members outstanding U.S.

customer best and business. In While the XXXX, was since retention brings strong, are the program the high satisfaction brand. of for scale equal our is importance QX, rate was the watermark which the of the loyalty posted program a to our stickiness overall

new customership, XX% look loyalty in of in quarter. even we new point factor events, drive exclusive early we foster is level in to to a that QX more order program first in and to will offer customer enrollees purchase among of customers, with as in these particularly access future who XXXX, incenting the critical on a potential a see As additional strong introduced we up made drive the enrollment in to redemption our program, engagement along In accelerators. We reward built more loyalty behavior.

will our customership as potential grows, enhance as to As sustained performance it lifetime drive customer well short-term value. both

to our initiatives. briefly technology Turning

is map track, made toward road on progress Our our we've and tech goals.

omnichannel retail we an you & continues to systems Bath of to in required size. know, Body be our company, need be has work independent to standing As significant bring technology where Works leading and up been a them for the company's to as business there

support so. and We to in have do growth future the and with remain engaging systems foundational focused been investing to on world-class tools partners needed

for evolve to sharing look the customers, forward to the we continue big from year. in efforts these We later wins experience digital and our

With the that, Julie call turn I'll to overview. the to merchandising over provide

Julie Rosen

want I continuing experience deliver for to work teams our a our thank too to you, exceptional Gina. customers. for to Thank their special and

and We are positioned strong pleased with for we're a summer. as a of performance well their result quarter efforts, our first

response customer stories our launch millions to fragrance. Through response the and the we bring power As fans model and Netflix most with of the through to a viewing products power our on announced represented on by scenes. This of transform Netflix. X% In them the The Bridgerton our shop. The storytelling their partnership to us experience briefly, terrific. life our over Gina into transport first touched to with and of into selling with success to allowed quarter. and chase fragrances in of forms. of for Netflix favorite one expectations, exceeded started newness we resonated popular collection the help partnership, Bridgerton, drove the core strong year-long And March, allowing aim the agile period, fragrance we programs the was

digits men's, Turning category. sales travel and the as in to we category outperforming the Body highlights. in mist, lip performance. fragrance share Care unit shop grew were the quarter, single Fine maintained low our particular

launch of everyday collection luxury mist we quarter, had product. of the success fragrance spurred on the limited virality by During fine a the with our organic of

diverse shop sprays period. demand mist outperforming was demand by fine slightly more of As went younger and customers. media, the viral The on during increased social the that with a set driven fragrance

test limited of a this As stores. in was U.S. launch I about our said, X/X

Given the The the as line channels introduced media including benefit quarter. customer will of date, one men's we awareness in to to this drive from we've grooming fleet American well success, in for and categories continues last fastest-growing we the Notwithstanding across be see forms our business year, to relaunch North as the seen care remains antiperspirant you invest in the full body continue newness and new growth in new fall. us low, the first collection into infused men's as to and deodorant core in men's, relatively awareness growth. we the

market quarter only assortment share we We of market while We decline continued candles mid-single market last increased candles. digits believe drive the fragrance visibility as opportunity but the we down maintained outpaced impacted to our be we we a in saw sales leadership. sales narrowed continue mindset. we our significant last yet mentioned, in not expansion as have of unit our to Travel, Candle unit travel in I advantage were the slight slightly. increased share declined this category. normalization, shop year, from take year and and of to single-wick we Home as trial to candle also by

or wallflowers the unit fresheners air share Our grew quarter. in

our sanitizers period enhancing by performed such with sanitizers category. PocketBac been our current single and leadership. form less in refills. versus in continued last positive increased adding assortment the we Meanwhile, digits unit driven Our moisturizing customer despite by received overall full-size last We've a forms market the category We've the the normalization our expanded declining have feedback decision slightly to launch. in low the same year. this, of maintained year refills, the nicely We've since as up the slightly due share, XX% PocketBac. market of soaps exit to Within pleased which soaps to the declined, make our growing strong compared driven quarter, soap performance business. been than and decreased

a drove Finally, in customers quarter. to as to gift continue look destination, which sets in an increase us important X% the gifting

products ahead the As to forward, will that we innovation planned newness have we our continue for across drivers key seasons continued look merchandising. be and and

North summer expanded American floor such summer to the stores. and glow and our all compelling fresh almost and expanded of assortment new our shop and continue we out fixture scents we as to assortment our set, level new For roll protection. Lip delivered SPS as our products skin outperformed we collection,

fixture. Our and lip customers which doubling brand, sales younger the new lip new customers lip fixture with is play, attracting linger the to in stores encouraging of new our to is

We're to North American rollout on track July. our of to stores nearly complete the all by

customer to assortment continued and in are our U.S. all fall. rollout supply and now maintain As be late we've demand, our the optimize laundry stores expect it of to we accelerating line meet to by

turn I'll it to that, With Eva. over

Eva Boratto

you, Julie. morning, Good Thank everyone.

provide I our and results allocation. first capital will guidance, on review an I Before quarter fiscal fiscal XXXX update

during Our and technology. In sustainable $XXX driving business, back our profitable the expectation total stores our in for through deleveraging. first the free this, million full to million top repurchases our long-term and and priorities $XX remains After we'll and growth year put in dividends, in To million plan investments to between flow quarter, the was investment our in investments for priorities capital debt continue support the year million of priority we and towards share cash capital projects $XXX business. remains investment $XXX remain $XXX generation million. brick-and-mortar

we the dividends. in per this quarter, payable out we ago, quarterly $XX month. later share During Subsequently, paid of few $X.XX million dividend announced a a weeks

increase dividend annual intention our $X.XX share the earnings sustained growth. over to time continue with per dividend of the to expect We with

common During per $XX.XX average million an shares quarter, of share. repurchased we of the X.X million for stock $XX price at

to expectation approximately to full year continues the opportunistically of XXXX. guidance throughout $XXX include fiscal million Our shares repurchase

notes principal the our we our We of ratio million ratio basis. senior reducing on a X.Xx quarter, remain at leverage debt-to-EBITDAR. adjusted growth to held X.Xx our also approximately and steady to amount $XXX X-quarter trailing committed of goal repurchased In first

$X.XX moving the our statement. earnings diluted exceeding reported income the per quarter, Now we to In to share. of share of diluted first $X.XX, per $X.XX guidance

compared billion floor was driven the March, by occupancy driven a newness in and better-than-expected $X.X cost. the and, quarter the reflecting declined quarter better-than-expected for sales sales outperformance Our prior of by that in Net extent, the to strong outperformance year. to X.X% net sales in described. buying lesser was The Julie a net sets

approximately a from benefit in sale As resulting by ship decrease XXX customer by basis weaker-than-expected carefully the change the extra expected, year-over-year XXXX. manage their in sales the week benefited dollar see from we in The as calendar, the was and international sales net shifted offset continue fiscal to points spending. average

and are Direct year. continued year-over-year, a compared and decline grow it XX% X% store as customers mind, XX% of to net net BOPIS totaled convenience in of in for in X% U.S. prior in offers. discussed, our line quarter driven the direct appreciate our stores, our flat. Keep and up sales sales represents $XXX by of approximately BOPIS Transactions X% demand the were of of quarter, million, is Canadian approximately $X.X previously delivered BOPIS on XXXX Gina as increase basis. were decreased to last demand. sales recognized net we versus the In expectation and growth a billion, As comparable AURs performance the in versus now QX an conversion. sales net year. This with calendar

were and adjusted direct to $XX we inventory were by BOPIS when face to system-wide by from international Note, year's XXX which manage levels basis driven from generated collect affected retail which roughly subdued in of decline negatively rollout by our first we U.S. in sales Middle of net the flat comparable. change are last net due product as international royalties to points. We continue stores those So East markets was war the BOPIS, partners the the the the their shipments wholesale year more the forecast. Total of year. outside affected of partners sales quarter, areas period, prior mid-teens a decline growth up during the consolidated war improved in million the sales, the prior for the generated by the the while The sales Compared decrease revenue war. impacted national by XX% East, impacted in quarter. Middle by sequentially areas to to sales the in year-over-year franchise lap in

the driver of an growth. believe and opportunity, continue in it to is international important We long-term

was rate prior included modest profit last flat gross mix margin gross percent optimization outperformance transportation onetime of work the an year-over-year and lower by XXX increase operations. in year. Merchandise The cost, a expenses SG&A. sales our benefits to deleveraged expectations, profit recognized of points with in driven driven by spans a rate cost basis of by to year. strong expense which as occupancy our last corporate AUR execution Buying fulfillment decline. discrete compared of First quarter basis net offset year. The year, by points international Total the SG&A XX improved and XXX across line quarter of lower basis first and sales both was XX.X%, partially points first quarter last the lapping in versus was

to additional continue XXXX delivered savings the than for million. We annual with benefits year approximately $XX fiscal cost being we In earlier in million approximately expect realized $XXX quarter, expected. first

income by sales. million First quarter $XXX total X.X% or of XX.X% operating to increased net

inventory. dollars line quarter is The Moving compared additional support inventory inventory up in product ended our We and total on last first X% new the year, launches to with stores. expectations. increase in to to with

As our appropriately second inventory we levels into head the are quarter, positioned.

estate. real to Turning

in penetration stores more quarter malls. the partners portfolio our locations. American XXX first off-mall quarter, North to and In increase Our our Internationally, than opening healthy we in permanently off-mall ended XX extremely with new XX [ off-mall half continued closing our with the stores, stores. remains fleet ] primarily

guidance. our XXXX to financial fiscal Turning now

full guidance maintaining bottom with million for and to the top share. added the for guidance year and to sales that to while earnings As comparisons diluted lines, that XXXX $XX both included narrowing midpoint background, a net each. raising $X.XX With per reminder, providing high end we which are about we the the our week are as ranges XXrd

to to net to result our between to to XXrd down XXXX week growth. with XXXX, now full X.X% down points X% a in XXX and between sales the of we flat representing up Adjusting approximately year-over-year. expect for the net results headwind year, For expect X.X% range basis range week sales extra the we

basis, net in at comparable continue both are of high and We on marketing scale. positive to initiatives sales product growth expect the the We our our half in cost be the launches The XX.X%. midpoint split week XX%, adjacencies turn year a be second profit our expect the gross and SG&A and end now profit are and approximately at gross now to weighted more rate to to previously, be than our SG&A XX.X% and expected rate approximately work approximately of benefits mentioned to XX% of optimization respectively. a as

Our guidance diluted call. guidance earnings for per updated we full inputs, $X.XX remain between on to net unchanged share the Considering the $X.XX. last guidance provided nonoperating all for of is expenses our earnings from our year

As in prudent approach are the a guidance, keeping it's our environment. explained, mind remain still a and consumer in we Gina to year, taking dynamic we spending early in

Turning guidance. now quarter to our XXXX second

sales second forecasting versus of end reflecting prior the range, We of X% quarter. are a over a quarter down sequential year flat prior the high with range improvement the to

in rate XX% to merchandise in quarter expansion profit we margin the with lap be QX In prior quarter, second expect to line the gross year. begin We approximately second will XXXX. of rate

buying as real percent margin moderate of reflects store rate, in investments in net a forecast expense sales estate. deleverage by year-over-year improvement Our by driven merch and occupancy offset in

to expected second are roughly AURs be flat. in the quarter

prior rate to largely with inflation, be cost net of increase initiatives. by offset higher versus investment quarter sales year, by second expect rate XX% marketing reduction and our the wage driven SG&A our partially approximately We the

tax diluted Considering of are $X.XX million. diluted $XX weighted net of quarter share we per of of second nonoperating with XXX inputs, rate and outstanding expect these quarter all XX% average approximately between $X.XX. approximately shares forecasting of We second earnings a million, expense approximately

to the And call remarks. for now turn Gina some I'll closing back

Gina Boswell

you, In growth are anticipated of step half like I'd a line pleased the our Thank again to our top return the in how year, Eva. the toward closing, better-than-expected back with to emphasize year. we to start convincing

continue efficiencies We more are our is our which to our and cash to return shareholders. and to on creating initiatives effectively us debt executing further allowing strategic in reduce business,

about excited the ahead. opportunities continue We to be

to questions. I'll now operator for call the turn the over

Operator

[Operator Instructions] BMO is Our Siegel Markets. from Simeon first coming of question Capital

Simeon Siegel

Nice job.

you it then what Is on marketing through collaborations, the mean, just you're you about better your benefits how thinking these Is it incremental these nuanced. more are customers? -- initiatives? about new how incremental learning visits? reflecting So categories, campaigns, seeing it little I the pricing? a are bit initiatives? And Is you're thinking the from Just product

B&O You on held the sales decline.

forward? but off about going you're estate, I to Just guess, right You're as in also point I lowering mall. the I leverage you're guiding if the for And understand investments wonder way now? making move real the deleverage what's leverage points you think

would So be as helpful any well. there color

Gina Boswell

from the you, and ask It's B&O to nice hear leverage. speak first take Simeon. Thank you. the to I'll Eva part

as products the investing and certainly awareness. been brand funnel full far driving and colabs, As marketing in it's top approach, a we've and new the of

Julie XXX the those the and had heard all impressions. million so that mention luxuries viral -- You everyday impressions from Bridgerton,

into colabs, is for it's customers engaging it's inserting whether relevant all that as cultural the as other them. activities we're So well monitoring and today, we're equity us our most whether metrics. reach media key are that new conversations This

it's with like So working. to to we say. It's customers, more for more us to working more often exciting it's love, that see gain really

in early as enter still store for we fall. like we've but we and we see, what our in journey, the more the it's So excitement customers got

Eva Boratto

So Gina. thanks,

and we X% square we in leverage in to operations gross Rents leverage Turning to our to improvements, fulfillment execution sales flat in overall with would great continue B&O. some look X% to Simeon, about is say And you I say, had on really pleased centers. foot our that growth. and we're Overall, able B&O, lower. you would margin the make I per slightly it's continue driving we off-mall really saw What as there at progress to are to were B&O QX, B&O QX. the

ahead push So to continue we'll drive and improvements.

Operator

Stanley. Straton next The question Alex Morgan is from of coming

Alexandra Straton

Perfect.

a here. couple Just

at to on your us provide well that evolves international, quarter in could you as at pressure. the about be how First, driven front your that also look that taking assumptions represents expansion gross the offset margin of the the like seems the in would second year And guidance, on full a fall ability how compared quarter half. in the if looking that would first outcome, that helpful. you you're a forward, quarter as embedding And Can Middle as guidance, much to back talk maybe all? half second percentage to then East it

So can about you talk to just us there. assumptions the

Gina Boswell

you. Great. on want think and start in. Thank I just zoom think chime to will Eva I will I I then second out for international. a

you the this in As out, pointed East. is affected Middle war the directly by

you quite by war. healthy first quarter. the retail If the in business in growing remove the teens regions affected It's system-wide a the sales with

but got the East near-term track. all is So Middle in pressure on else we've the

so markets. and with of in new We do Korea only of store that but XX South to in -- opening some the standing not the can existing in international. the we And to also London, speak free net store mentioned also first offsets have stores -- the

other Our partners markets for as example, QX. in expanding, are as in Mexico well

affected plans. are even big expecting, picture beyond East the and offset the then -- expansion on think, the that the remarks, is markets So long-term will quarter-by-quarter. so we that, that Middle has be in not pressure ability to I our I mentioned in as that expect international moderating that the that Eva international that, changed her And is

Eva Boratto

here. question Gina, a Thanks, add to and many few Alex. I'll Yes. your There's parts things,

did at the QX, expectations. we our our that underperform -- guidance provided today, in look you As international

we from at low of to the mid would and in a are the high the wide improve, scenarios -- guidance. you the range QX, and assumes there and high expect to say international the expect international guidance to Our beginning expectations in I

margin comparable for margin margin driving for XXXX. XXXX. I expecting QX would gross and year throughout we of the with last year, remind of began continued year terms gross merch In the we're you, improvements of

investments margin improvements So given B&O deleverage for we're year, the by XX estate. Merch to them about and offset real continue, points our basis those but that as improved the we get obviously, wrapping that's in mid-year. --

Operator

coming is question from next Citi. Lejuez of The Paul

Kelly Crago

This is Kelly on for Paul.

the at [ guidance. curious coming ] X on AURs Just in versus down

you we the already knew Given reported in of early about quarter. of the we when quarter, -- fourth misses the product some sort

relative of March, in played Just curious you kind question. of on AUR to on promos plan were more kind April? we got back but out said I flat, you half That's as of of the my how into has a know pullback expecting quarter? first the

how your in pure transportation curious just product trended cost ex savings XQ. secondly, And

So an raw just absolute and just turning whether are materials merch of we're expectations how margins about your in you benefit the the relative to on costs they rest to -- basis year? thinking saw for product and how

Gina Boswell

Thank you, Kelly.

in AUR to it our It AUR, in relates first was foreshadowed the we very as of So pressure that last call. under the actually something start quarter. was earnings

set had we February that recall You resonating. in wasn't a floor

we and quickly when that's So the pulled to we pivoted on strategic promotion lever build traffic.

to back achieve strong the floor and newness us the in part flat quarter. that As we we AUR sets moved through enabled had with quarter, the of

AUR. flat with exited we So

then of expand AUR AUR we guide for full full to costs, So we ask year, the our plan is to is other were on And to And in. chime part flat the for last we're here Eva and more on were than year back reminder the then first QX, than no year. I'll the modestly promotional product expectations.

Eva Boratto

for the I'd Yes. question. overall Thanks say quarter the essentially expected. were flat we as AUCs in

Operator

Boss is The question coming of next JPMorgan. from Matthew

Amanda Douglas

for It's Amanda Douglas on Matt.

on year? XQ's versus you Eva, the on savings May? And think to you've And that into identified changes traffic elaborate we outlook drivers consumer behavior cost of plan you could just of margin goods on in as progressed just you've could category. as within support sold by cost then your the your outperformance gross improved any elaborate or the sales about Gina, net maybe initial So

Gina Boswell

category. start We'll question. X-part a That's Okay. Julie with the on

Julie Rosen

performance Yes. the the really growing as year, and down everyday prior was driven by fine candle this fragrance continuing share, Body to with luxury. men's lip including digits our and digits, that along driven categories up new was in was really was mist normalization. Care unit by Home such fragrance low and single and growing mid-single while

the of to candles, was the candles to leadership. single-wick declined market our continued due largely did that decline, So we the but and assortment narrowing of maintain which

Our QX our XX% by perspective, we about business. that consistent our line wallflowers. great and soap to soaps in business. in partake of of customer refills. less than did for shop, grow were candles we friendly slightly unit sanitizer actually and digits, down soap above with decline the really in low business our a was love which It's soap with way in was driven And refills, and environmentally make up our single the our and share was From shop a performance

declined, sanitizers that by really performed and normalization by category. in continued and exit period quarter, introducing full-sized finally, same the last in PocketBac decision driven innovated versus growing our form the quite moisturizing year, the nicely was here PocketBac. to really we our to And really due the

Eva Boratto

that's operations, transportation efficient. The And to than and savings. about a our the It's margin gross I'll year. the We've Thanks, of office more are SG&A. in efficiencies store well us on exit cost of executing how question tracking That's than we're with key SG&A to Julie. our back is indirect XX% a It come our are in cost little and savings centers incremental sourcing the we last annual $XXX of and pleased to we're more more had to Overall, $XXX toward home the with your cost in spend. the drivers the traffic. skewed one a fulfillment skewed savings Great. quarter. gross start XX% plan margin, million little in million equation. be really side of this with deliver X-year remaining enabling

we're progress again, with there. we're making really pleased So that the

quarter. to Now Overall, traffic. traffic coming was flat the back for

up think we transactions I were As by said driven conversion. previously,

little stores, I'll second and quarter. a stronger in overall, largely the in the traffic was While we was an say, target our half the of this experience,

we -- in we're business. to us And execute said, Julie the against really overall, the continue delivered newness quarter. So as for the

Operator

Next question is from of America. Hutchinson of coming Lorraine Bank

Lorraine Maikis

raising back I value for back you do moving AUR Are the new Or pieces to wanted the give for the you're you outlook investments? to through of some customer behind to to or some on into dig ticket your that price of paid promotion? plan half. ensure formulation the

Julie Rosen

need QX widespread and in the to best are and or did really our know Julie. right? but luxury We actions lapping these forms in we to agile everyday question. test get came pricing use elevated launches And and us increases increase packaging where keep for levels we allows So did engagement take we very that the some really outcomes. We from operating selective take Bridgerton, I'll with to our storytelling balance the Lorraine, pricing, traffic It can way from that of like increases to we promotional Yes. paid. strong It's ticket 'XX. meaningful a decrease our increase continue model. we 'XX, certain product to and not due in take desire

Gina Boswell

I'll to pre-pandemic also still relative this are And healthy. the XXXX materially quite AUR increases add is up that from

for you thank So the question.

Operator

The Sachs. McShane Goldman question of from next is Kate coming

Katharine McShane

QX, in and few comment is all could and if second which versus We just quarter a Mother's like with more wondered you, in Easter events the many buying you about a at as of occasion are QX. buying period, shoulder for occasions I there the -- Day during the not think

could dynamic us view playing maybe bit to again, think So how QX out that and how little about given a you we you about, it? talk should

Julie Rosen

QX, a great Yes. gifting business. Kate, actually we -- had

quarter. X% QX, sets And gifting gift X have up for were the periods, Valentine's great we We in right? Day. Our have

We the then have Easter Mother's have of and beginning we Day.

think our is us you of big all sale. as QX I portion, for semiannual The know, other

said, sets things up I the with Day, and gift that beginning of drive our are those with Easter being pleased were QX. And we X%. Mother's as Valentine's So really the very Day,

Operator

The Boruchow from next coming of Wells question Ike is Fargo.

Irwin Boruchow

seems -- guided hoped AUR it you. improved on believe the but degree on was question the AUR, it that When came couple it of quarter, I a is, flat and you gave different guys had the to X know last [indiscernible]. exit it guidance on asked in you which upside. has on that the call, but something I Again, a mean of wasn't think my I saying the dead like horse guys are the ways. you don't at to just you beat Eva, I been for had

trying that just understand could parse to out. you I'm So if

then terms in quick there us kind the a and the through headwind retailer XXX in in like is benefits big calendar the And quarter. XQ? in how first of benefit like you feel expect, XQ? on quarters, model, next I like of was then X points on walk And Eva. wacky Could the the I think, follow-up depending from in basis little to it's the a coming the what XQ calendar I know

Eva Boratto

Thanks on for shift. Yes. the second the question question, the start Ike. calendar -- I'll your first with

QX, there's benefits points. fourth first we to reverse. expect I'd the in comparable, we impact positive QX. those by another level the to would would us. calendar say, basis QX, in negligible As quarter, a said, And obviously quarter shift, calendar benefited XXX

out conversion back the And March and were traffic redundant, of floor the at of terms and through was use the I'll we at was on of first last we started say, as risk quarter In and being while Gina's in to that the agile our drive the quarter, our we we to leveraged set half the to exiting also flattish. model our as strong, quarter And we soft. our said around AUR, margin pull AUR, progress rate. promotion balancing comment quarter right, able

drove. again, is to overall drive our We results right, from the the that look So as to we But drive decisions you're made the the at quarter it we business -- the business at forward. believe of AUR, our the pressured we right quality guidance.

Gina Boswell

And where or to if that customer I down may meet add, we're they're and always up at. doing the

top new where and to elasticities as the model including, feel of almost margin, the still the guide to line. is get weeks actually quality being use a to if agility, the relatively way, strategic by this have I we everything our need long flat within we you that as a So can else intact, can measure to of we gross promotion the so optimize lever

can to we're sure be sometimes be point the at. as a where down. most make good to flat, trying quarter, that just were up customers fourth important want is get I we can So the guide the in we meeting to sometimes that that and clear we're we But we when they're quality view and

Operator

coming question next is Raymond from James. of Tong The Olivia

Olivia Tong Cheang

to a of that comments heard you, being might impacting wanted lot of how the things, them your a on better be I competition we've one few and obviously retail understand view they're more within off-price Amazon your through how from just some of categories. impacting and that be in the not Ulta, business? direct in may terms know thinking I competitors, activity but these

And the then apologies half that about potentially could May AUR, that give could initiatives and a the for bit what if then little you second talking expecting? another us on you're saw in on improvement of drive but color just you question

Julie Rosen

It's question. I'll the take competition Julie.

we're the of So right? for we our top performed standards always participate us. that think offering segments, It's why We competition well doorstep. in very is customers. focused on that against attractive products innovative market really high mind right The of on always our they're

innovation sets that stand It still, as us apart ahead. literally from our So lifeblood. is competition. really they know don't the to and team we stay a hard We work

best-in-class to advantages I quickly that into really would advantage is found second than in We is model. back environment, with fragrances, breath do integrated X speed. best We act Bridgerton, to to help scents, One get to competitive anybody enables selling them. this say react really that best is this. out unique were can our us immersive us vertically do competitive our stores. the our else It able there. And more

the work our across different a world. the the able Ultas of body transportive fragrance our tell advantage and product. are us stories, deliver customer forms, with many competitive for is the it's needs help wallflower us candle, of in or products you world a targets wash, that And our fragrance that lip the quality really which We don't see whether to top a houses as really a a at first or company, fragrances the

a have we So constant competition. eye on the

Gina Boswell

seen regarding The so in that far your AUR. and provided we've seen that we've are trends outlook in on contemplated up May. today, sales pick both I'll guidance question far what so And our Great. we

Operator

The Telsey Dana next from Telsey question is of coming Advisory Group.

Dana Telsey

AUR. thing more on one Just

in the be should categories terms any As new difference retail XQ how the should different you versus what XQ aware you be to And of as any we we balance out the the year, Anything increased through pricing from of the categories then, the most as the about think terms stores we we go there, XQ you're and then business, you go we to through expecting XQ business and about the as are laundry? just watching newness? of of given on categories AURs to for of? And year excited the direct to are are merchandise Julie, go that the differences seeing? what in in

Gina Boswell

do the and We promotions look with start ticket we in the increases you total, have it AUR we I'll category as year. at know, differences. then different throughout

instances. be or the well really through So in general, opportunities cross-category delights and more no to noticeable planned we There'll But as move year. and with would we're in build differences us those for move as compelling be AUR baskets surprise up trying those to opportunities.

versus meaning we customers be thought you direct if stores comment that Julie, to valuable those that we'd dual advantage we omni-channel terms direct are to want the most because hard of really -- an of try stores, because no is excited have. In to about. shopping And player, or newness, about be in excitement specific terms on what incent to we very want

Julie Rosen

me your X we pleased team be my a and Dana, to There's very excited all so key look to new our as and it's lot have they're elements, our with to voice. nice adjacencies, we to growth, about, hear return and are important strategy. to

say them. adjacencies heard of new You one Gina's is

younger excited seeing growth. fastest-growing well driving body of the we which So is we collection, core in continue really as to forms newness benefiting men's. We're be really men's. are And year as category and from care. It's lot introduced in our a APDO that in customer slightly a about last in we Grooming

sales that by stores rollout are complete that to have lip really our a July. on track so perspective, American to we lip new North doubled. all lip stores From in fixture nearly And

great purchase. it younger we're a mask scrub, introducing then with customers sort routine a and customers. that fixture. the routine have a It's of tint, We And is seeing fixture this and and resonating we're and out customer of linger play to go through and

learn. to we're exciting continuing the earlier category, this rolled And fleet year. a From another full hair perspective, we to hair

for we're resonating are with fragrances learning customer. core best-selling our that We really are that famous our

our also shampoo We that are customers And into for it's and because gain very travel of this to trial size customers new and optimize category. and to those We've way a launched seen because that to we'll our for continue asking to test new fragrances conditioner just continue assortment. great them we're XX% were we brand. month, a

to rolling And stores, it We've XXX laundry, thrilled announce that and been just we assortments continue I with of know exciting that we innovative and testing we are we U.S. besides laundry different that but with everybody's and will about and things we other ended is be favorite, late tinkering all ensure and course, rightsize, by in in are beyond, fall. which delivering we QX that stores optimize are have above to quickly to the different stores and just adjacencies. to new

month, delivered last and this scents. we summer, for new Just compelling fresh

We glow have summer new our collection.

spent And to for, also and haven't expect of lot of exciting and very then a us partnership see about the higher about level protection, first as we're more We with Netflix, customers you SPS delivered as our expanded for with year should progress. but assortment a that. very that partnerships asking time our were which Bridgerton, a we was excited talking

Gina Boswell

if add, And voice. the just I and -- Julie's Yes. was quite that you passion maybe that could hear can in

the of are try we in then do, the think Both these of more is which speak X will the these about category and and critical. just and partnerships we on collaborations core, newness on core growing growth. which these And X to adjacencies of we what that the think in the back to half more. the is its inflect about also rely -- levers, I the

of excited And driving the why guidance. so inflection because point about is at our point it truly the it mid- so we're high and that's

Operator

of next is Our Kim TD coming from Cowen. question Jonna

Jungwon Kim

in the your has changed marketing the you business to how and full spend how get if but channels allocating also are wanted around your you your half? Just about marketing, across last ROI? And And quarter and half, increasing back in funnel anything are expectations fragrance spend back talked since more you're color the the for front category you measuring home there.

Eva Boratto

Yes. our overall back Thanks the year. for of for half the expectations question. I'll start of terms in the

they're point today, half that driving behind personalization think the capabilities, outlined. assumptions guidance provided as by candles supported growth making normalization more I lip which the Julie both the to As and to from we we return They you that just that X year And of remain consistent, our in growth. to inflection moderating the category men's, elements don't a Growth loyal and hit of back well and bit, the look we're digital storytelling, and our need laundry. And marketing returning of the and seasonal quite finally, at hair, adjacencies, sanitizers. our and loyalty investments the on customers newness reaching with consumers more and as what through we're experience. our on engaged doing core

Gina Boswell

well engagement. earlier about marketing as increases driving commented on then the of the and we deepening exciting that which ship engagement the customer spend, And is Yes. how and as question the

segmentation purchase and like, targeting one-trip to number to learning use, example, well customers offers. predict and a are model often uses tools people based some which drives on that now for make line. purchase personalized been attribute can we that second these engagement the social the have a using we with measuring But a and the technology dollar do their when top ROI what tools also machine marketing we're can the it model have We mix that customer targeting algorithms the can targeted of where a and actually and and behavior is then as through spend

here really and innings promising there's So results. early

optimize glove hand those investments. the get for we bang I buck highest marketing of actually with so that think technology respect the in So to and can with

So more of expect the back in should that you half.

I think please. for more time have we question one

Operator

question Sandler. today from Wolfmeyer of Korinne coming Piper final Our is

Korinne Wolfmeyer

QX how like product your on growth those now thinking of some then much customers coming guidance the customers like products And you uptake have returning more talk newer returning clarify how just who the could like are and in some you of launches, starting are versus from that's now is data, separately, of half. you from sales membership those high to a new the you I cadence assuming new QX could First, to may product the of assume kind little the growth of in on range? to commentary be products? bit about the and that loyalty back that there? And replenish about end

Eva Boratto

question This Eva. Korinne, I'll is -- take part your the first first. first

a in at would guidance return basis. the end return Our at of high is as to QX, and XX QX. you QX, cadence comparable-week point expect And growth we the growth and on look high to to mid the at our the

Julie Rosen

huge well younger mentioned, them. in perspective, Yes. see those attract concerned attract slightly the categories, us and I perspective, seeing seeing investing more as some a a new of and younger, far to my hair and for customers new a script, we as as more being coming have customers we're still men's. And men's. are more new from with as us we are I said XX% marketing in and as more lip diverse opportunity the as to customers That from We're to said, to in brand, brand you think to media men customer

Gina Boswell

that the also of quarter, in XX% I'll enrollees the customers. add loyalty were And new first

where the data we clickstream data And of really offers program, to kind getting them in them the and really can products take to that. the so recommend capture There's like portfolio. much entire use getting things so

benefit existing the and reactivated loyalty customers, really new to customers expect we program. alike So customers from

Operator

Mr. McGuire At back for comments. the this closing like floor would over time, I turn to to

Michael McGuire

you, And today. in replay days Bath on & your good be Thank interest A for for website. our available of Have you call joining for a this course, Thank will Works. you Donna. of XX Body thank day.

Gina Boswell

you. Thank

Operator

today's Ladies this concludes and gentlemen, event.

and off disconnect the day. log of and webcast rest the your may this your lines time, You at enjoy

Bath & Body Works (BBWI) 4 Jun 242025 Q1 Earnings call transcript