Bath & Body Works Expanding into Men’s Grooming Market

Bath & Body Works

Bathtub & Physique Works: The Main Identify in Residence Perfume and Private Care

Are you a fan of luxurious dwelling perfume and private care merchandise? Look no additional than Bathtub & Physique Works, Inc. (NYSE: BBWI). With 1,850 areas in North America and 480 franchises internationally, BBWI is a family identify relating to inexpensive luxurious merchandise. Regardless of a decline in gross sales in 2022 and 2023 as a result of inflationary strain, BBWI stays resilient in comparison with its friends within the business.

The agency’s loyalty program has been a key consider its success, with a robust buyer base accounting for practically 80% of gross sales in 2023 and nonetheless rising. The Males’s store has emerged as one of many fastest-growing segments, tapping into the increasing male grooming market. Moreover, BBWI’s candles and sanitizer segments have normalized as client habits shifted post-pandemic.

Historic Monetary Evaluation

In 2020, BBWI noticed a income improve of roughly 19% year-over-year, pushed by robust gross sales throughout all merchandise classes. Nonetheless, in 2022, income declined by 4.1% as a result of macroeconomic challenges like excessive inflation impacting client spending on discretionary gadgets.

Regardless of the income fluctuations, BBWI has maintained strong margins over time. Gross revenue margin contracted to ~43% in 2022 as a result of inflation, impacting merchandise margins and total profitability.

Class Overview

BBWI’s gross sales in North America are divided into 4 segments: Residence Perfume, Physique Care & Perfume, Soaps & Sanitizer, and Others. Residence Perfume and Physique Care & Perfume every account for 40% of gross sales, exhibiting a slight decline within the dwelling perfume phase however progress in physique care, particularly within the Males’s sub-category.

The Males’s store has been a standout performer, attracting new shoppers and diversifying BBWI’s market attain. The worldwide male grooming market is projected to develop by 44% by 2028, presenting a big alternative for BBWI to capitalize on this development.

FY2023 Earnings Evaluation

In 2023, BBWI noticed a slight income lower of 1.7% as a result of macroeconomic pressures and normalization of its candles and sanitizer segments. Nonetheless, the corporate stays the market chief in these segments and continues to win market share.

The efficient loyalty program at BBWI has confirmed instrumental in driving buyer acquisition and retention, with over 37 million lively loyalty members accounting for a good portion of gross sales within the U.S.

Rising Males’s Enterprise

The Males’s store at BBWI has been successful story, tapping into the rising male grooming market and diversifying the model’s buyer base. Initiatives like advertising campaigns with MVP athletes and influencers have helped increase consciousness and drive gross sales on this class.

BBWI’s strategic transfer to spend money on the male product line has paid off, with a robust give attention to creating model consciousness and providing all kinds of grooming merchandise for males.

Relative Valuation Mannequin

When in comparison with its friends, BBWI has proven stable profitability margins, outperforming in internet revenue margin TTM whereas buying and selling at a reduced ahead P/E ratio. Regardless of slower income progress outlook, BBWI’s profitability metrics stay robust.

With a goal share value of ~$51.21 and an upside potential of 16% based mostly on the relative valuation mannequin, BBWI presents a compelling funding alternative for growth-oriented buyers.


One of many draw back dangers for BBWI is the lingering inflationary strain impacting client demand. Policymakers’ selections on rates of interest and client confidence may additional have an effect on BBWI’s operational prices and profitability.


In conclusion, Bathtub & Physique Works, Inc. continues to be a dominant participant within the dwelling perfume and private care business, with a robust buyer base and revolutionary product choices. Regardless of challenges within the macroeconomic atmosphere, BBWI’s strategic initiatives just like the efficient loyalty program and give attention to the boys’s enterprise phase place it for future progress.

With a goal value of $51.21 and a purchase suggestion, BBWI gives buyers a promising alternative to capitalize on the corporate’s resilience and progress potential within the coming years.

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