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Bath & Body Works’ $80 Million Windfall Strengthens The Earnings Reset!

Bath & Body Works reported second-quarter 2026 results modestly above expectations despite continued underlying pressure. Net sales declined 2.3%, better than guidance of down 5% to 3%. Adjusted EPS reached $0.62 versus guidance of $0.20 to $0.25, although approximately $80 million of tariff refunds boosted results. Excluding this benefit, adjusted EPS would have been $0.31, still modestly above guidance. Management acknowledged progress but said the core business remains pressured and below internal targets. The company continues executing its multi-year Consumer First Formula strategy focused on innovation, brand reinvigoration, distribution expansion, and operational efficiency. Fruit Fusion, a hydration-focused body care line with dermatologist-approved formulas and a Hilary Duff collaboration, exceeded expectations with sellouts across several formats and higher average unit retail. Bath & Body Works plans further innovation during the second half, including extensions of Everyday Luxuries and A Thousand Wishes.