BBWI - Bath & Body Works: Positive After Q1 EPS Beat

2024-06-05 01:21:55 ET

Summary

• Bath & Body is a dominant player in the fragrance industry, with a strong market share.
• The company has a successful loyalty program with a large number of members compared to the programs of great companies like Ulta or Sephora.
• After far exceeding the Q1 2024 guidance, I think the chances of exceeding Full-Year expectations are high.

Investment Thesis

After great results in Q1 2024 , where the company exceeded the guidance that management provided during Q4 2023, Bath & Body shares are falling almost 10%, which seems somewhat irrational to me given the beat in both revenue and EPS. While a 0.9% decrease in revenue is not positive in itself, considering that the guidance was a decrease between 2 and 4% this quarter, you can understand why I'm positive about the company....

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