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SEC filingBath & Body Works, Inc. reported strong financial results for fiscal year 2025 (ended January 31, 2026). The company generated $7.29 billion in net sales, with a gross profit of $3.19 billion and operating income of $1.13 billion. Net income was $649 million, translating to earnings per share of $3.00 (both basic and diluted). The company demonstrated robust cash generation, with $1.10 billion in net cash provided by operating activities. Key strategic initiatives include the Consumer First Formula transformation plan, expansion of off-mall retail locations (60% of North American stores as of January 31, 2026), and international growth through partner-operated stores (573 locations) and e-commerce sites (34). The company maintains a strong liquidity position with $953 million in cash and cash equivalents, though carries significant long-term debt of $3.61 billion.
Bath & Body Works delivered solid financial performance in fiscal year 2025, generating $7.29 billion in net sales. The company achieved $3.19 billion in gross profit, representing a 43.8% gross margin. Operating income reached $1.13 billion (15.5% operating margin), while net income totaled $649 million. Earnings per share were $3.00 for both basic and diluted calculations. The company's cash flow from operations was particularly strong at $1.10 billion, driven by net income of $649 million plus adjustments including $254 million in depreciation and $31 million in share-based compensation expense. The balance sheet shows total assets of $5.07 billion, with current assets of $2.02 billion including $953 million in cash and cash equivalents. The company carries significant long-term debt of $3.61 billion, resulting in a shareholders' equity deficit of $1.28 billion.
The company's revenue of $7.29 billion comes from multiple channels including 1,927 company-operated stores in North America (1,814 in the United States and 113 in Canada), international partner-operated stores (573 locations across more than 45 countries), and e-commerce platforms (34 international sites plus U.S. and Canadian sites). The company launched on Amazon in the U.S. in February 2026 as part of its marketplace expansion strategy. The business is seasonal, with approximately 40% of net sales typically occurring in the fourth quarter holiday selling season. The company operates a predominantly off-mall retail strategy, with 60% of North American stores in off-mall locations as of January 31, 2026, with a target of reaching 75% over time.
The company maintained healthy profitability metrics with a 43.8% gross margin ($3.19 billion gross profit on $7.29 billion sales). Operating expenses totaled $2.06 billion in general, administrative and store operating expenses, resulting in operating income of $1.13 billion (15.5% operating margin). Interest expense of $276 million and other income of $32 million led to income before taxes of $882 million. The provision for income taxes was $233 million, resulting in a 26.4% effective tax rate. The company's cost structure includes merchandise purchases from approximately 90 vendors, with the largest vendor supplying approximately 12% of total merchandise purchases during 2025.
The company generated $1.10 billion in operating cash flow, with key adjustments including $254 million depreciation, $31 million share-based compensation, and $63 million deferred income taxes. Investing activities used $227 million, primarily for $237 million in capital expenditures, partially offset by $9 million proceeds from asset sales. Financing activities used $599 million, including $401 million for common stock repurchases and $167 million in dividends paid. The net increase in cash was $279 million, ending with $1.23 billion in cash and cash equivalents. The balance sheet shows total current assets of $2.02 billion against total current liabilities of $1.59 billion, resulting in a current ratio of 1.27. Long-term debt of $3.61 billion represents the company's largest liability.
The company's strategic focus is on the Consumer First Formula, a multi-year transformation plan launched in the third quarter of 2025 to revitalize the brand across product, marketplace, and operations. Key initiatives include creating disruptive products, reigniting the brand through marketing investment, winning in the marketplace through enhanced digital experiences and third-party channels, and operating with speed and efficiency. The company expects approximately 1% North American square footage growth in 2026, continuing its shift toward off-mall locations. The IT Transformation Project aims to modernize digital systems and enhance omnichannel capabilities. The company faces competition from specialty stores, department stores, online retailers, and discount retailers, with brand image, price, and quality as principal competitive factors.