Bath & Body Works Credits ‘Newness’ for Q3 Performance

Bath and Body Works said a focus on “innovation and newness” helped the personal care and fragrance retailer end its most recent quarter on a strong note.

The company saw its stock jump 20% early Thursday (Nov. 17) after its earnings release showed a positive outlook for the brand heading into the holiday season.

“We are pleased to have delivered better-than-anticipated bottom-line performance as the team remained focused on innovation and newness, continued to leverage our vertically integrated supply chain to chase into key winners, and took aggressive action to control costs and improve overall efficiencies,” said interim CEO Sarah Nash in the release.

Among those new things is a loyalty program — first announced in August — whose members now account for a third of the company’s customers and 65% of United States sales.

During a conference call Thursday morning, Julie Rosen, the company’s president, said these customers tend to spend more, have a higher retention rate, and shop across multiple categories.

Asked about sales traffic during October and early November, Rosen noted that customers responded to promotions, with traffic higher on days that promotions were offered.

“Clearly the customer is very price sensitive,” she said. “We saw that, and we planned for it.”

Nash — who will step down next month when new CEO Gina Boswell begins her tenure — said earlier this year that the company increased its use of data analytics. The goal, she said, is to “transform Bath and Body Works into a true omnichannel business,” capitalizing on fashion trends and newness in its packaging and products.

In April, PYMNTS’ “Beauty, Wellness Merchants Get Smart Digital Payments Makeover” report found that consumers are looking more to eCommerce solutions for their beauty and wellness purchases, with 12% reporting they did so more last year than they did at the start of the pandemic in 2020.

That makes keeping abreast of digital trends and capabilities “essential for merchants in an industry where much of their competition already embraces advancements such as live online assistance and product recommendations powered by smart algorithms,” the study stated.

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