Bath & Body Works, Inc. BBWI is set to report fourth-quarter fiscal 2024 earnings on Feb. 27, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $2.77 billion, which indicates a decline of 4.8% from the prior-year reported figure. The consensus mark for the bottom line has increased by a penny in the past 30 days and is pegged at $2.04, which indicates a decline from $2.06 reported in the year-ago period. Bath & Body Works delivered a trailing four-quarter earnings surprise of 9.7%, on average.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Factors to Consider Ahead of BBWI’s Upcoming Results

Bath & Body Works has been navigating a challenging fiscal comparison due to the calendar shift, which includes the loss of the 53rd week and five fewer shopping days between Thanksgiving and Christmas than the prior year. These factors are likely to have hurt net sales, which are expected to have fallen 4.5-6.5% year over year in the fourth quarter, with a 500-basis-point headwind from the shifted fiscal calendar. As a result, earnings per share are expected to be between $1.94 and $2.07.

At the same time, the company has been battling rising selling, general and administrative (SG&A) expenses. In the third quarter, general, administrative and store operating expenses rose 4.6% to $482 million, with SG&A expenses, as a percentage of net sales, increasing 100 basis points year over year, due to elevated marketing investments. For the fourth quarter, management guided a jump of 40 basis points in SG&A expenses, as a percentage of net sales, primarily due to continued investments in loyalty programs and digital initiatives, which are likely to have weighed on the bottom line.

While the aforementioned factors do raise concern about the outcome, Bath & Body Works has been seeing growth in its core product categories, Body Care, Home Fragrance and Soaps & Sanitizers. Each category posted low-single-digit year-over-year growth in the third quarter, supported by strategic marketing and innovative product launches. New seasonal fragrances and giftable items might have further boosted sales, while the Everyday Luxuries collection, which resonated well with younger consumers, is likely to have maintained its momentum into the fourth quarter.

BBWI has been focused on operational efficiency through its "fuel-for-growth" program, which is expected to have generated $150 million in cost savings in fiscal 2024, exceeding initial estimations. In the third quarter alone, the company achieved $35 million in cost benefits, bringing total savings over the past two years to $300 million. These disciplined cost management efforts are likely to have helped mitigate bottom-line pressure and supported profitability as the company enters the final quarter of the year.

What Does the Zacks Model Unveil for BBWI?

Our proven model predicts an earnings beat for Bath & Body Works this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Bath & Body Works has an Earnings ESP of +1.72% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies that, too, according to our model have the right combination of elements to beat on earnings this reporting cycle.

DICK'S Sporting Goods, Inc. DKS currently has an Earnings ESP of +0.98% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

DKS' top line is anticipated to have decreased year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.75 billion, which indicates a 3.3% decrease from the figure reported in the year-ago quarter. 

The company is expected to register a decline in the bottom line. The consensus estimate for DICK'S Sporting Goods’ fourth-quarter earnings is pegged at $3.47 per share, down 9.9% from the year-ago quarter. DKS delivered a trailing four-quarter earnings surprise of 11.4%, on average.

Ulta Beauty, Inc. ULTA has an Earnings ESP of +1.22% and a Zacks Rank of 2 at present. ULTA is likely to have registered a top-line decline when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.46 billion, which indicates a 2.6% decline from the figure reported in the year-ago quarter. 

The consensus estimate for Ulta Beauty’s fourth-quarter earnings is pegged at $7.09 per share, which calls for a 12.3% decline from the figure reported in the year-ago quarter. ULTA delivered an earnings beat of 6.2%, on average, in the trailing four quarters.

Tractor Supply Company TSCO currently has an Earnings ESP of +0.08% and a Zacks Rank of 3. TSCO's top line is anticipated to have increased year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.56 billion, which indicates a 4.8% jump from the figure reported in the year-ago quarter. 

The company is expected to report in-line bottom-line results. The consensus estimate for Tractor Supply Company’s first-quarter earnings is pegged at 37 cents per share. TSCO delivered a trailing four-quarter earnings surprise of 1.4%, on average.

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Bath & Body Works, Inc. (BBWI) : Free Stock Analysis Report

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