Bath & Body Works Q2: $80M Tariff Refund Lifts Margins, But Q3 Guidance Slashed
BBWI sits 26% above its 52-week low of $14.275 on elevated volume (2.1× avg).
Summary
Bath & Body Works beat Q2 EPS estimates on one-time tariff refunds and litigation gains, but sales declined and Q3 guidance came in far below expectations.
Key Events · Earnings and Guidance · BBWI
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Q2 EPS Beat Driven by One-Time Items
Adjusted EPS of $0.62 beat expectations, but $80M of IEEPA tariff refunds and an $88M interchange fee settlement gain inflated results. Underlying sales fell 2.3% to $1.51B.
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Q3 Guidance Far Below Expectations
Q3 EPS guidance of $0.05 to $0.10 compares to $0.37 adjusted EPS in Q3 2025, and full-year guidance now includes a wider loss.
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North American Store Sales Decline
Stores - U.S. and Canada net sales fell 5.4% to $1.13B in Q2, driven by lower transactions and average dollar sales.
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Debt Reduction Continues
Completed partial redemption of $250M of 7.500% 2029 Notes for $253M subsequent to quarter-end, following the Q1 make-whole call of the 2027 Notes.
Analysis · BBWI · Trade & Services
Bath & Body Works reported Q2 adjusted EPS of $0.62, beating expectations, but the beat was driven by one-time items — an $80 million IEEPA tariff refund and an $88 million interchange fee settlement — rather than underlying sales growth. Net sales fell 2.3% to $1.51 billion, with North American stores down 5.4%. The company's Q3 EPS guidance of $0.05 to $0.10 is far below the prior-year quarter, and the full-year outlook now includes a wider loss. The balance sheet shows a $1.05 billion shareholders' deficit, though liquidity remains adequate with $794 million in cash and $623 million available under the ABL facility.
How filings like this one have moved
In the 30 days to Sep 13, 2026, 29.5% of the 1672 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.22%. These are measured outcomes after filings of this importance, not a forecast for this one.
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At the time of this filing, BBWI was trading at $17.97 on NYSE in the Trade & Services sector, with a market capitalization of approximately $3.5B. The 52-week trading range was $14.28 to $32.32. This filing was assessed with negative market sentiment and an importance score of 7 out of 10.