Bath & Body Works, Inc. · NYSE:BBWI
Bath & Body Works — Q3 2024 Earnings Presentation
34 slides from Bath & Body Works's earnings presentation, Nov 25, 2024
Slide 1: Bath & Body Works Q3 2024 Earnings
BATH & BODY WORKS 2024 November 25, 2024 1
Slide 2: Q3 Earnings Call Participants
Q3 EARNINGS CALL PARTICIPANTS GINA BOSWELL EVA BORATTO LUKE LONG Chief Executive Officer & Director Chief Financial Officer VP Strategy & Investor Relations 22
Slide 3: Forward-Looking Statements
Forward-Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 We caution that any forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) contained in this presentation or made by our company or our ma
Slide 4: Innovation across core products, adjacencies and collaborations is resonating
“Innovation across our core products, adjacencies, and collaborations is resonating with both new and existing customers supported by the investments we have made in marketing and technology.” 44
Slide 5: Q3 Financial Highlights
Highlights Q3 FINANCIAL HIGHLIGHTS Beat our guidance on both top and bottom line and raising full year guidance. Net sales performance, adjusted for calendar shifts, has sequentially improved each quarter during 2024. $1.6B 43.5% Strong execution drove positive store traffic and conversion, exceedin
Slide 6: Five Key Strategies
1. ELEVATING THE BRAND & CORE PRODUCT Fortifying our operating 2. EXTENDING foundation OUR REACH while building a 3. ENGAGING platform for growth WITH CUSTOMERS through our five 4. ENABLING key strategies SEAMLESS OMNI-CHANNEL 5. ENHANCING OPERATIONAL EXCELLENCE 66
Slide 7: The Brand & Product
ELEVATE The Brand & Product Elevate staple categories through the power of fragrance Innovating across our portfolio and continually raising the quality of our products Compelling assortment at a range of price points to meet customers where they are with product they will love and trust 77
Slide 8: Q3 2024 North American Category Performance
Q3 2024 North American Category Performance Grew all 3 Categories & Maintained Overall Unit Market Share YTD HOME FRAGRANCE BODY CARE SOAPS & SANITIZERS Q3 sales up low-single digits; Q3 sales up low-single digits; Q3 sales up low-single digits; maintained YTD unit market share maintained YTD unit m
Slide 9: America's Most Loved Candle Brand
• Room-filling fragrance for approximately 25-45 hours • High concentration of rich fragrance oils America's Most Loved Candle Brand provides tremendous quality for the money; marketing showcasing product attributes 99
Slide 10: Generating Excitement in Our Core Categories
Generating Excitement in Our Core Categories "Prestige-inspired" Everyday Luxuries On-trend single fragrance launches, like Pocketbacs, moisturizing sanitizer forms helped drive double-digit growth in Vanilla Romance and Platinum and our new one-ounce spray Fine Fragrance Mist in Q3 resonated with c
Slide 11: Collaborations
ELEVATING THE BRAND COLLABORATIONS Collaborations are a key element of our strategy to drive growth in our core products. STRANGER THINGS PART 2 EMILY IN PARIS 11
Slide 12: Our Reach
EXTEND Our Reach Growing new adjacent categories, opening new store locations, and expanding internationally Our adjacent categories of Men's, Hair, Lip and Laundry continue to perform well and year-to- date, represent approximately 10% of our business North American real estate portfolio remains he
Slide 13: Customers Responding Favorably to Innovation
Customers Responding Favorably to Innovation MEN’S LIP LAUNDRY Men’s is our largest adjacency, and we Lip sales nearly doubled in the quarter, Laundry rolled out to all U.S. stores in see significant opportunity as we and you can expect additional launches September, we believe it is an exciting con
Slide 14: International
EXTENDING OUR REACH INTERNATIONAL International markets are an attractive pillar of our strategy. Our partners' store openings are on-track, with approximately 50 net new stores expected this year. London, United Kingdom 14
Slide 15: Engage with Customers
ENGAGE Quality with Customers Everyday Luxuries Laundry During Q3, we achieved record high customer retention rates and improvement in attracting new-to- brand customers Encouraged by the strong growth within our highest-value customer segment, the "fragrance fashionistas" Approximately 38M active l
Slide 16: Strong Loyalty Program
ENGAGING WITH CUSTOMERS STRONG LOYALTY PROGRAM ~38M Over 80% Active1 loyalty members as of Of year-to-date U.S. sales the end of Q3 2024 driven by loyalty members + 4% to Q3 LY + 6 pts to Q3 YTD LY 1 - Active members of our loyalty program represent loyalty program members who have purchased at leas
Slide 17: Seamless Omnichannel
ENABLE Mobile App Seamless Omnichannel Scent-scription TikTok Shop Technology roadmap remains on-track. These investments are foundational to our long-term growth Enabling new capabilities to increase customer engagement and provide a seamless omni-channel experience Launched Everyday Luxuries on Ti
Slide 18: Operational Excellence
ENHANCE Operational Excellence Increasing our 2024 cost savings guidance to $150 million from $130 million for fiscal 2024. Bringing the two-year total to $300 million, significantly exceeding initial targets. Ohio based Beauty Park continues to be a significant advantage, driving speed and operatio
Slide 19: Building Momentum
Building Momentum Pleased with strong execution in the quarter and the momentum we are building Poised to drive strong Omnichannel approach Over the long-term, our demand and excited to ensures customers can strategy and the actions we offer compelling shop seamlessly, are taking position the produc
Slide 20: Q3 2024 Financial Results
Q3 2024 Financial Results Key Highlights • Net sales were $1.6 billion and increased 3.0% $ in millions, except earnings per share compared to prior year. • Driven by positive store traffic and conversion, and growth of each of our categories of Body Care, GUIDANCE Home Fragrance and Soaps & Sanitiz
Slide 21: Q3 2024 Net Sales by Channel
Q3 2024 Net Sales by Channel 76% 20% 4% Stores – U.S. Direct – U.S. International & Canada & Canada $1.2B $321M $69M Approximately 55% of North BOPIS net sales are recognized as store net sales, and International system-wide American fleet in off-mall we delivered ~40% growth in demand YoY. retail s
Slide 22: Q4 2024 Guidance
Q4 2024 Guidance Key Highlights • We expect fourth quarter net sales range $ in millions, except earnings per share of down 6.5% to down 4.5% versus the prior year. GUIDANCE • We expect the fourth quarter will be METRIC (November 25, 2024) negatively impacted by approximately 500 basis points from t
Slide 23: FY 2024 Guidance
FY 2024 Guidance Key Highlights $ in millions, except earnings per share • Raising and narrowing net sales and earnings per share guidance to fully reflect our Q3 METRIC GUIDANCE GUIDANCE outperformance and Q4 expectations. (November 25, 2024) (August 28, 2024) • We expect net sales results to range
Slide 24: Capital Allocation Highlights & Outlook
Capital Allocation Highlights & Outlook $166M $348M $134M YTD capital expenditures YTD stock repurchases YTD dividend payments ~$250M $400M 2.7X forecasted FY'24 capital forecasted FY'24 share TTM Gross Adjusted Debt-to- investments1 repurchases EBITDAR $675-$775M forecasted adjusted FY'24 Free Cash
Slide 25: Strong Business Model
Strong Leader in Attractive Spaces Healthy Margins Business Model #1 in Home Fragrance and Soaps & Sanitizers, 17% Operating Margins2 #2 in Body Care1 Our focused investments are working, and we are beginning to see results. Our 5 key strategies Strong Adjusted Returning Cash to position the busines
Slide 26: Together
TOGETHER > WEATHER a7 or 259m Zan ~<a
Slide 27: Appendix
Appendix Other financial information 27 27
Slide 28: 2024 Calendar Impacts
2024 Calendar Impacts Q1 Q2 Q3 Q4 1 Full Year Vs. LY (Reported) (Reported) (Reported) (Guidance) (Guidance) Net Sales (0.9%) (2.1%) 3.0% (6.5%) - (4.5%) (2.5%) – (1.7%) Reported / Guidance Calendar Shift & +200 bps 0 bps +200 bps ~ (500) bps ~ (100) bps Extra Week in 2023 Net Sales (2.9%) (2.1%) 1.0
Slide 29: Debt Maturities
Debt Maturities as of November 2, 2024 29
Slide 30: Store Count and Company-Operated Selling Square Feet
Store Count and Company-Operated Selling Square Feet Year to Date Total Company-Operated Stores Stores Selling Sq. Ft. (000’s) Opened/ 2/3/2024 Opened Closed 11/2/2024 2/3/2024 Closed 11/2/2024 Remodels Bath & Body Works U.S. 1,739 75 (41) 1,773 4,916 215 (92) 5,039 Bath & Body Works Canada 111 1 -
Slide 31: Adjusted Financial Information – Q3 2024
Adjusted Financial Information – Q3 2024 $ in millions, except per share amounts 31
Slide 32: Adjusted Forecasted Financial Information – FY 2024
Adjusted Forecasted Financial Information – FY 2024 $ in millions, except per share amounts 32
Slide 33: Adjusted Forecasted Financial Information – FY 2024
Adjusted Forecasted Financial Information – FY 2024 $ in millions 33
Slide 34: Q3 2024 v Q3 2023 General, Administrative and Store Operating Expense Summary
Q3 2024 v Q3 2023 General, Administrative and Store Operating Expense Summary $ in millions 34