A bullish thesis on Bath & Body Works, Inc. argues the stock is a compelling deep-value turnaround opportunity trading at a trailing P/E of 5.76 and a forward P/E of roughly 7, far below peers such as Ulta Beauty. While revenue has gradually declined from $7.56 billion in fiscal 2023 to approximately $7.25 billion over the trailing twelve months, gross margins have remained consistently between 43% and 44%, and net income has recovered to $727 million on a trailing twelve-month basis. Management is shifting the store footprint toward off-mall locations, which now represent about 60% of stores, with a long-term target of 75% penetration across North America, aiming to offset declining mall traffic. The thesis suggests that even without revenue growth, the company's durable margins and strong cash generation are inconsistent with its current valuation, offering substantial upside if turnaround initiatives succeed.
Bath & Body Works Inc.Article presents a bullish deep-value thesis citing low P/E, resilient margins, and turnaround potential.
Ulta Beauty Inc