Bath & Body Works turnaround includes Amazon launch, less overwhelming stores
Bath & Body Works is launching a “comprehensive transformation plan” to revitalize its brand on the heels of a disappointing third quarter and a slow start to the fourth.
“Our third quarter results were below expectations, and we are lowering our outlook for the remainder of the year reflecting current business trends and continuation of recent macro consumer pressures,” said Daniel Heaf, who took the reins as CEO of Bath & Body Works in May. “While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth. Consumers will begin to see the benefits of these changes in the coming quarters, though it will take time for the impact to be reflected in our financial performance. “
Bath & Body Works reported that its net income totaled $77 million, or $0.37 per share, for the quarter ended Nov. 1, compared with $106 million, or $0.49 a share, in the year-ago period. Net sales fell 1% to $1.594 billion.
Heaf said that the Bath & Body Works organization has become slow and inefficient.
“Unnecessary complexity has reduced our speed, dampened our innovation, and we prioritized efforts that were not targeted to acquiring a new and younger consumer,” he said. "Unlocking the next phase of growth requires decisive action.”
Heaf described a turnaround plan for the brand targeting $250 million in cost savings by 2027. The strategy, aimed at attracting new, younger, includes product innovations in the company’s “core categories” of body care, home fragrance soaps and sanitizers.
Bath & Body Works also plans to enhance in-store experience and expand into new wholesale channels to “win in the marketplace” to meet customers wherever they are. To widen its consumer reach, the brand will launch on Amazon in 2026.
On the earnings call, Heaf said that the company will exit certain categories and reduce its assortment to make its in-store experience “less overwhelming."
"To sharpen our focus and make our in-store experience less overwhelming, we will cut our assortment and reduce complexity, concentrating on fewer, more on-trend product priorities," Heaf told analysts. "Starting in the first half of next year, you will see thoughtful edits to our assortment and selective category exits such as hair and men's grooming as we refocus on the core."
Bath & Body Works also plans to enhance its app and website to increase customer engagement and aid in product discovery. The company will also lower its free shipping threshold in early 2026.
Heaf noted in the earnings statement he has been “deeply immersed” in the business for the past six months.
“I remain as confident as I was on my first day that Bath & Body Works possesses unique enduring strengths — an iconic American brand with loyal customers and a business model that generates healthy margins and cash flow,” he said.