Bath & Body Works, Inc. Fundamental Analysis
Bath & Body Works, Inc. (BBWI) shows moderate financial fundamentals with a PE ratio of 4.81, profit margin of 10.03%, and ROE of -52.38%. The company generates $7.2B in annual revenue with weak year-over-year growth of -0.22%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 30.2/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BBWI's fundamental strength across five key dimensions:
Efficiency Score
ExcellentBBWI demonstrates superior asset utilization.
Valuation Score
ExcellentBBWI trades at attractive valuation levels.
Growth Score
WeakBBWI faces weak or negative growth trends.
Financial Health Score
ExcellentBBWI maintains a strong and stable balance sheet.
Profitability Score
WeakBBWI struggles to sustain strong margins.
Key Financial Metrics
Is BBWI Expensive or Cheap?
P/E Ratio
BBWI trades at 4.81 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, BBWI's PEG of -0.62 indicates potential undervaluation.
Price to Book
The market values Bath & Body Works, Inc. at -3.08 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.29 times EBITDA. This is generally considered low.
How Well Does BBWI Make Money?
Net Profit Margin
For every $100 in sales, Bath & Body Works, Inc. keeps $10.03 as profit after all expenses.
Operating Margin
Core operations generate 15.85 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-52.38 in profit for every $100 of shareholder equity.
ROA
Bath & Body Works, Inc. generates $14.65 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Bath & Body Works, Inc. produces operating cash flow of $1.16B, showing steady but balanced cash generation.
Free Cash Flow
Bath & Body Works, Inc. generates strong free cash flow of $906.99M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.50 in free cash annually.
FCF Yield
BBWI converts 25.87% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
4.81
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.62
vs 25 benchmark
P/B Ratio
Price to book value ratio
-3.08
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.48
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-4.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.38
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.52
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.32
vs 25 benchmark
How BBWI Stacks Against Its Sector Peers
| Metric | BBWI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 4.81 | 23.90 | Better (Cheaper) |
| ROE | -52.38% | 1176.00% | Weak |
| Net Margin | 10.03% | 2549.00% | Weak |
| Debt/Equity | -4.16 | 0.73 | Strong (Low Leverage) |
| Current Ratio | 1.38 | 2.83 | Neutral |
| ROA | 14.65% | -8407.00% (disorted) | Strong |
BBWI outperforms its industry in 3 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Bath & Body Works, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
48.87%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
1.02%
Industry Style: Cyclical, Growth, Discretionary
GrowingFCF CAGR
-29.00%
Industry Style: Cyclical, Growth, Discretionary
Declining