Bath & Body Works Inc Q4 2024 Earnings Call Transcript

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

Question: Irwin Boruchow - Wells Fargo Securities - Analyst : Hey, good morning, everyone. Gina, I guess I wanted to ask, so building on the improvements exiting last year, sounds like you're excited about a lot. I mean, what are you most excited about as you look to 2025 and then maybe just regarding the Q1 trend, there's been a lot of buzz around Disney. Can you give us any color on the Disney collaboration, any KPIs you could share would be great. Thank you.

Question: Irwin Boruchow - Wells Fargo Securities - Analyst : Thank you.

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : Great thanks and congrats on a nice quarter.

Question: Matthew Boss - JPMorgan Chase & Co - Analyst : So Gina, maybe could you speak to drivers of the underlying revenue growth and in particular, the traffic acceleration that you've seen in the last two quarters? And just confidence maybe on the sustainability of this revenue inflection, if you could elaborate on first quarter performance, maybe what you've seen so far and just tie in a bit on the product pipeline for '25. And then Eva, just I guess maybe high level, what level of revenue growth is required to drive operating margin expansion from high teens today?

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

Question: Lorraine Maikis - BofA Securities - Analyst : Thank you. Good morning. I wanted to gain a better understanding of your full year sales guidance. There's a lot happening. Candles are less of a pressure, adjacencies and collaborations are working. International is returning to growth. I guess I was just curious why you base your guidance on prior trends? Are there offsets we're not thinking about? Or is this a bar that you hope to beat?

Question: Kate McShane - Goldman Sachs Group, Inc. - Analyst : Hi, good morning. Thanks for taking our question. We wondered if you could talk to any more detail around the winter semiannual sale and how it trended versus the summer semiannual sale and last year? And just how you think collabs will play a role in maybe reducing some emphasis on the semiannual sale in the quarters that you run it?

Question: Alex Straton - Morgan Stanley - Analyst : Thanks a lot for taking the questions. Congrats on a nice quarter. Just two for me. Maybe one for Gina. You highlighted younger customer acquisition a lot today. Do you have any sense of the average age of the current customer, how that's evolved over time? Any goals from a target perspective? And then for Eva, what does 2025 sales guidance assume as it relates like to volume or units compared to AUR? Thanks a lot.

Question: Mark Altschwager - Robert W. Baird & Co. Incorporated - Analyst : Good morning. Thank you for taking my question. I wanted to drill down on international for a moment. You're expecting that to return to growth this year. I was hoping you could give a bit more color on what you expect the shape of the year to look like. And then you flagged international as a headwind to gross margin in the first quarter. Is that the case for the full year? I know there's two different revenue streams there with the wholesale sell-in as well as the royalty. So not sure if Q1 is a good indicator there. Thank you.

Question: Paul Lejuez - Citigroup Inc. - Analyst : Hey, thanks guys. If we go back to your tariff comments, can you just remind us of what your large countries are in terms of exposure? I know you built in China, but you said nothing else at this point due to the uncertainty. So just where is your exposure by country? And then separate, curious what you assume for the adjacent categories growth this year. You were 10% when you add them all up this year, where do you think that number goes for '25?

Question: Krisztina Katai - Deutsche Bank AG - Analyst : Hi, good morning and thanks for taking the question. Just wanted to touch on your level of newness that you have talked about. Obviously, an exciting pipeline that you have planned for us, so can you sort of contextualize the level of product newness you have planned in 2025? You obviously talked about Everyday Luxuries expanding. I think I heard body creams and washes. You obviously also have a much bigger start to collaborations in the year with the Disney launch. You also talked about a candle restage later. So how does the overall level of newness or just the product staging changes compared to what we saw in 2023? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 27, 2025 / 1:30PM, BBWI.N - Q4 2024 Bath & Body Works Inc Earnings Call

Question: Dana Telsey - Telsey Advisory Group - Analyst : Hi, good morning, everyone. As you think about the buildup of the loyalty program, I think it grew 6%. How are you thinking about that for '25 and beyond? And the new customers you're capturing, any differentiation in their demographic profile? And then Eva, on cost savings, how do you see the opportunities for cost savings going forward? And is there any particular categories to be focused on? Thank you.

Question: Olivia Cheang - Raymond James & Associates, Inc. - Analyst : Great, thanks. Good morning One short term and then one on margins. First on the short term. The midpoint of your Q1 guide suggests that -- suggests Q1 growth similar to Q4, normalizing, of course, for timing. We've heard obviously a number of companies talk about pretty tough January because of the weather and other external factors. So wondering if you saw that as well? And if so, what's driving the improvement since then to result in the recovery to offset a tougher January for the rest of the quarter? And then on margins, for fiscal '25, you mentioned that you're looking for flattish margins. But obviously, there's a lot of puts and takes in the middle before you get back to flat. So can you talk about some of those as well as the margin impact of the tariffs embedded into your outlook? Thank you.

Question: Natalie Koltermann - UBS Securities LLC - Analyst : Hi, this is Natalie Koltermann on for Jay. I wanted to ask about freight. With the recent move lower in ocean freight rates, do you expect freight to be a tailwind to margins this year? And what type of impact do you have incorporated in the guide? Thank you.

Question: Korinne Wolfmeyer - Piper Sandler & Co. - Analyst : Good morning. Thanks for taking the question. I'd like to dive a little bit deeper into the SG&A guidance for the year. It looks like it's roughly going to be about flat as a percent of sales. Can you give us any context on where we could see some more leverage and what could drive some more leverage over the course of the year where there might be some upside? And then how to think about the cadence of that spend over the course of the year? Thank you.

Question: Kelly Crago - Citigroup Inc. - Analyst : Hey, thanks for taking your question. Curious if you could talk a little bit more about the underlying expectations for the fragrance industry as we're just starting to hear from some other companies that the category is normalizing a bit. Thanks.

Question: Marni Shapiro - The Retail Tracker - Analyst : Two quick ones. The first is, I'm curious if you can talk a little bit about Scent-Scription. Have you had people enroll? What this looks like? What you think it can be over time? And I'm assuming the 25% off is easily recouped because those customers are not going to get, say, the Buy 3 Get 3 promotions. They'll just be on a regular cadence, easier to model, I'm guessing for you. And then my second question is just a simple one. I have -- I'm sorry, but I have to know which Disney Princess is selling the best?