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Thursday saw Piper Sandler analyst Korinne Wolfmeyer adjust the price target on Bath & Body Works Inc. (NYSE: NYSE:BBWI) stock, reducing it to $37 from the previous $39 while maintaining an Overweight rating. Wolfmeyer’s decision comes in the wake of the company’s strong first fiscal quarter results and the reiteration of its full-year guidance.
Bath & Body Works’ management has been focusing on introducing new products, a strategy that seems to be paying off, as the impacts of tariffs have been minimal and manageable. Despite this, Bath & Body Works shares faced some pressure today, largely due to softer expectations for the second fiscal quarter and investors’ desire for more clarity regarding the anticipated second-half pickup.
Wolfmeyer remains optimistic about Bath & Body Works’ prospects, especially with the recent change in leadership that she believes offers a fresh perspective and a significant opportunity for investors. She suggests that the current weakness in share price presents a buying opportunity.
The analyst’s commentary highlights the company’s effective management strategies and investments in product innovation. "We continue to rate BBWI Overweight following strong FQ1 results and reiterated FY guidance, as management’s investments in newness prove effective and tariff impacts to be only modest and manageable," Wolfmeyer stated.
She further notes that while there are softer expectations for the upcoming quarter, the overall outlook remains positive. "Shares are feeling some pressure today, with FQ2 expectations softer and investors wanting more color around the 2H pick-up. Though, we see little reason for concern here and think the refreshed focus from new leadership provides a compelling opportunity for investors to get ahead of. We’d be buying on the weakness, and our PT moves to $37 from $39," Wolfmeyer explained.
In other recent news, Bath & Body Works reported its first-quarter financial results for 2025, surpassing earnings expectations with an earnings per share (EPS) of $0.49, which was above the analyst forecast of $0.42. However, revenue slightly missed the mark, coming in at $1.4 billion compared to the anticipated $1.42 billion. Despite the earnings beat, the company maintained its full-year guidance of 1-3% net sales growth. Bath & Body Works also highlighted new product lines and collaborations, such as a Disney (NYSE:DIS) Princess collection, as a focus for future growth.
The company’s gross profit rate improved by 160 basis points to 45.4%, showcasing strong operational performance despite challenges in certain market segments. Operating income for the quarter was reported at $209 million, accounting for 14.7% of net sales. Analysts have noted the company’s continued pressure in the candle market as a potential challenge, with the competitive fragrance market requiring ongoing innovation. The company plans to explore new collaborations and international expansion strategies as part of its growth initiatives.
Additionally, Bath & Body Works reaffirmed its EPS guidance range of $3.25 to $3.60 for the full year, with expectations for second-quarter net sales to be flat to 2% growth. The company remains focused on enhancing its digital platform and exploring new distribution channels to attract new consumers.
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