Bath & Body Works Inc (BBWI): 完善计划

Restricted - External Hale Holden+1 212 412 1524hale.holden@barclays.comBCI, USCarolyn Popelka+1 212 526 0935carolynanne.popelka@barclays.comBCI, US Open in Barclays Live ChartSource:Credit- Barclays Trading, S&P Global Market Intelligence;Bloomberg Indices- BloombergKey Points•BBWI printed 1Q revenues in line with its pre-release while exceeding its flashed expectations•on gross margin. Gross margin expanded 160bp y/y driven by a 100bp improvement inmerchandise margin related to AUR increases, as well as some leveraging from salesgrowth. FY25 guidance wasreaffirmed,and the company indicated iftariffsremain in place asis, it will likely fall at the low end of its FY25 guide, and if they moderate, results would likelybe in the upper half.•1Q was BBWI's strongest quarter of underlying sales growth since 2021, as the company saw•positive dual channeltrafficthat outpaced third party benchmarks. The outperformance wasled by its Disney collaboration, and the company plans to engage in more collaborations.Gifting,though a small category, grew in the double digits. The company called out low singledigit growth in body care, low single digit growth in home fragrance, and mid single digitgrowth in soaps and sanitizers. BBWI expects body care to see higher than low single digitgrowth over time as it growth with the market. The candle market remains depressed,pressuring home fragrance, though BBWI did manage to modestly gain share.•The company ended the quarter with elevated inventory, up 7% y/y and above its initial plan•to mitigatetariffimpacts. BBWI expects inventory to remain elevated in the first half, upabout 10% as a result of the initial expectation due totariffsas well as holiday inventorybuild.•57% of its fleet areoff-malllocations, flat from last quarter. The target mix remains 75%off-•mallgiven success in proximity to big anchors like Walmart and Target.GuidanceFIGURE 2. FY25 GuidanceSalesGross MarginSG&A RateNet Non-Operating ExpenseTax Rate FY25up 1% to 3%44.0%27.5%$255mn26.0% 2 Balance Sheet/Credit OverviewBBWI ended the quarter with total debt and cash on hand of $3.9bn and $636mn, respectively.Net debt was $3.3bn and net leverage was 2.1x.The company generated $188mn in cash from operations and capital expenditures totaled$37mn.Operational Highlights•Net sales increased 2.9% y/y to $1.42bn, in line with our estimates of $1.42b.••Gross margin was 45.4%, up 160bp y/y and above our estimate of 43.3%.••Adjusted EBITDA was $283mn, up 4.8% y/y and above our estimate of $257mn.•Summary of RatingsBloomberg U.S. High Yield 2% Issuer Capped Credit IndexU.S. HY RetailersBBWI 5 1/4 02/01/28BBWI 6 3/4 07/01/36BBWI 6 5/8 10/01/30BBWI 6 7/8 11/01/35BBWI 6.694 01/15/27BBWI 6.95 03/01/33BBWI 7 1/2 06/15/29BBWI 7.6 07/15/37Source: Barclays Research OldNewMarket WeightMarket WeightMarket WeightMarket WeightMarket WeightOverweightMarket WeightMarket WeightMarket WeightOverweightMarket WeightMarket WeightOverweightOverweightMarket WeightMarket WeightOverweightOverweight Analyst(s) Certification(s):We, Hale Holden and Carolyn Popelka, hereby certify (1) that the views expressed in this research report accurately reflect our personal views aboutany or all of the subject securities or issuers referred to in this research report and (2) no part of our compensation was, is or will be directly orindirectly related to the specific recommendations or views expressed in this research report.Important Disclosures:Barclays Research is produced by the Investment Bank of Barclays Bank PLC and itsaffiliates(collectively and each individually, "Barclays").All authors contributing to this research report are Research Analysts unless otherwise indicated. The publication date at the top of the report reflectsthe local time where the report was produced and maydifferfrom the release date provided in GMT.Availability of Disclosures:For current important disclosures regarding any issuers which are the subject of this research report please refer to https://publicresearch.barclays.com or alternatively send a written request to: Barclays Research Compliance, 745 Seventh Avenue, 13th Floor, New York, NY10019 or call +1-212-526-1072.Barclays Capital Inc. and/or one of itsaffiliatesdoes and seeks to do business with companies covered in its research reports. As a result, investorsshould be aware that Barclays may have a conflict of interest that couldaffectthe objectivity of this report. Barclays Capital Inc. and/or one of itsaffiliatesregularly trades, generally deals as principal and generally provides liquidity (as market maker or otherwise) in the debt securities that are thesubject of this research report (and related derivatives thereof). Barclays trading desks may have either a long and / or short position in such securities,other financial instruments and / or derivatives, which may pose a conflict with the interests of investing customers. Where permitted and subject toappropriate information barrier restrictions, Barclays fixed in