Bath & Body Works Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Simeon Siegel - BMO Capital Markets - Analyst : Thank you, everyone. Good morning. Hope you have a nice summer. Gina, could you speak to how you're thinking about new category revenues as being additive versus maybe a reallocation of customers intended spend at Bath & Body Works, just as they normalize those candle purchases, I guess meant deodorant, obviously fuels clearly additive, but how do you think about the other new categories? And maybe just I know you can't you test a lot, so maybe just speak any tests that give you confidence in the incrementality there? And then Eva, I think you maintained the free cash flow guide, but cut CapEx nicely. So I know there's some moving pieces that you mentioned with Eastern and taxes. So could you just bridge that gap? And that would be helpful. Thanks everyone.

Question: Lorraine Hutchinson - Bank of America Corporation - Analyst : Thank you. Good morning. Excluding the calendar shift you're guiding in fourth quarter sales to be worse than what you expect for the third quarter. Can you walk us through the puts and takes and why you're expecting a more challenging holiday season?

Question: Lorraine Hutchinson - Bank of America Corporation - Analyst : Thank you.

Question: Alex Straton - Morgan Stanley - Analyst : Great. Thanks all for taking the question. I just wanted to hone in on the second quarter sales in terms of the cadence of the quarter. It sounds like you made some adjustments that had some benefits as well to understand exactly how you guys think about the shortcoming there. And then what gives you guys confidence in the trend improving into the end of the third quarter. Thanks a lot.

Question: Alex Straton - Morgan Stanley - Analyst : Thank you.

Question: Kate McShane - Goldman Sachs - Analyst : Thank you for taking our question. Our question was around the semi-annual sale performance as well. Do you think there was any execution miss in the quarter or do you still think it's more of the macro? You did mention one of the things you'd be looking at in the future was timing. Was there any change in timing of this year's SaaS, and how are you thinking about maybe other elements as you approach -- the next semiannual sale?

Question: Kate McShane - Goldman Sachs - Analyst : Thank you.

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Great, thanks. So Gina, could you elaborate on customer traffic relative to AUR trends that you're seeing today? Maybe just how best to think about the balance between these two drivers, multiyear, given the increased focus on value that you cited? And then, Julie, if you could elaborate maybe on demand that you're seeing across categories in August or early customer response to your fall assortment?

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Thank you.

Question: Krisztina Katai - Deutsche Bank - Analyst : Hi, good morning, and thanks for taking the question. I wanted to ask about your good-better-best strategy and your mention of having available price point for everyone. So how do you think about the assortment for the balance of the year, if you continue to see can see a consumer that is accelerating the value-seeking behavior. So that is part one. And in particular, as you're thinking about sort of increasing your marketing efforts? What have you found to be working well, and how successful have you been able to tie in your loyalty program data? It drive greater ROI on that spend. Thank you.

Question: Dana Telsey Telsey - Telsey Advisory Group LLC - Analyst : Hi, good morning, everyone. As you think about the semi-annual sale and Julie, the genome which at which I review do you think about the semi-annual sale? And if you were to do it differently going forward, what would the changes be? How do you think about that? And in the newer categories that you have, let the haircare, deodorant would have whichever which is seeing greater traction than another and are any AURs being adjusted for some of the new categories, given their hesitancy on elevation by the consumer in terms of pricing. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 1:00PM, BBWI.N - Q2 2024 Bath & Body Works Inc Earnings Call

Question: Olivia Tong - Raymond James Financial, Inc. - Analyst : Great, thank you. Could you talk a little bit about your AUR expectations in the second half of the year you obviously started the year off a little bit choppy and then got unsteady or funding, but clearly the macros have become a bit more challenging. And as you think about second half plans. Can you just talk about some of the various initiatives to have to drive traffic? And then just following on that, can you talk a little bit about what drove the incremental cost savings and your confidence to maintain that level of cost mitigation to support the margins in second half? Thank you.

Question: Marni Shapiro - The Retail Tracker - Analyst : Hey, guys. I just want to follow up on this TikTok conversation and the prestige fragrances. Because first I want to confirm, the prestige fragrances are the ones that I saw blow up on TikTok. And then, assuming that's true, when you launch on the TikTok shop, can you just give us a little bit of information here? Will you launch with the prestige fragrances? Or will it be across all categories? Are you using your own influencers or content creators? Or are you doing this through the TikTok shop? And TikTok shop tends to lean into promotions. And BBW also has your own version of promotion. So could you just give us a little insight to what this looks like? Because I've seen TikTok shop be very successful. I've personally been influenced by it. So I'm just curious if you can give us a little insight there.

Question: Jonna Kim - Cowen Group, Inc. - Analyst : Thanks for taking my question. Could you just talk about the candles and the sanitized categories, what you saw there during the quarter, and how you plan for those categories in the back half, and also just curious on the marketing spend as you continue to invest there, what is the right level of marking spend over time? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 28, 2024 / 1:00PM, BBWI.N - Q2 2024 Bath & Body Works Inc Earnings Call

Question: Korinne Wolfmeyer - Piper Sandler & Co. - Analyst : Hey. Good morning. Thanks for taking the question. Can you provide a little bit of color on the different segment performance you're anticipating for the back half of the year and how we should be modeling direct versus store versus international? I think you said there was a little bit of pull forward for international. And then any color on how you're thinking about the broader promo environment for the back half would be great. Thank you.