Bath & Body Works stock (NYSE: BBWI) is set to announce its fiscal first-quarter earnings on Thursday, May 29, 2025, with analysts estimating earnings of 47 cents per share on revenue of $1.42 billion. This would indicate a 21% increase in earnings year-over-year and a 3% rise in sales when compared to the previous year’s figures of 39 cents per share and $1.38 billion in revenue. Historically, BBWI stock has increased 60% of the time following earnings announcements, featuring a median one-day rise of 4.8% and a maximum recorded increase of 25%.
In Q4 2024, the company reported a 4% decrease in net sales and an 18% decline in earnings per diluted share, attributing these results to a shifted fiscal calendar and diminished consumer demand. Looking forward, BBWI is under increasing pressure due to U.S. tariffs on Chinese imports, along with sluggish discretionary spending and heightened competition from lower-cost private-label options. Continually high interest rates and economic uncertainty are further diminishing consumer interest in non-essential products such as fragrances and candles. For 2025, the company’s guidance of 1-3% sales growth and an EPS range of $3.25-$3.60 reflects a position of cautious optimism, with the midpoint suggesting modest growth relative to the adjusted results of 2024. The company holds a current market capitalization of $6.5 billion. Revenue over the last twelve months totaled $7.3 billion, and it was operationally profitable with $1.3 billion in operating profits and net income of $798 million.
For event-driven traders, examining historical patterns may provide an advantage, whether through positioning in advance of earnings or responding to post-release movements. If you’re looking for upside with reduced volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, having outperformed the S&P 500 and yielded returns surpassing 91% since its inception.
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BBWI’s Historical Odds Of Positive Post-Earnings Return
Some insights on one-day (1D) post-earnings returns:
- There are 20 earnings data points documented over the past five years, with 12 positive and 8 negative one-day (1D) returns noted. In total, positive 1D returns occurred approximately 60% of the time.
- Nevertheless, this percentage drops to 50% when considering data for the last 3 years rather than 5.
- Median of the 12 positive returns = 4.8%, while the median of the 8 negative returns = -6.8%
Additional information for recorded 5-Day (5D) and 21-Day (21D) returns post earnings is summarized in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though ineffective if the correlation is low) involves understanding the correlation between short-term and medium-term returns after earnings, identifying the pair with the highest correlation, and executing the appropriate trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader could take a “long” position for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on both 5-year and 3-year (more recent) history. Note that the correlation 1D_5D relates to the correlation between 1D post-earnings returns and the ensuing 5D returns.
Is There Any Correlation With Peer Earnings?
At times, the performance of peers can affect post-earnings stock reactions. In fact, the pricing in might commence before the earnings announcements. Here is some historical data on the prior post-earnings performance of Bath & Body Works stock in relation to the stock performance of peers that released earnings just before Bath & Body Works. For a fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns.
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