Scented Strategy | Notes from the Bath & Body Works Q2 2025 Earnings Call
I know most fans of the brand aren’t tuning in to the quarterly earnings calls or digging into the investor spreadsheets—and I totally get that. But for me? It’s a mix of accounting geekery, love for a brand I use daily, and just a dash of curiosity (okay, nosiness!) about where we’re headed.
This morning’s Q2 2025 call gave us our first 105 days at the vision under the new CEO (Heaf), alongside key insights from executives Boratto, and Long. They spent an hour walking through strategy, answering questions from major financial institutions, and giving a few interesting breadcrumbs that could shape where we’re going.
I took four pages of notes (yes, really), but here are the key highlights:
Consumer Insights
This quarter, Customers remain Cautious and Value Seeking. Customers are spending selectively - with more intentional purchasing behaviors.
They will continue to offer affordable, high-quality products that bring joy to our life.
He (Heaf) collected direct insights here and internationally speaking with associates at Beauty Park, Distribution Centers, and the stores across the United States, many shareholders, key partners internationally, and of course speaking with the customers.
Accelerating growth by putting the consumer at the center of everything they do.
Focusing on Storytelling.
Reduce Alliance on Promotions.
Brand Foundation
Strong Foundation: Iconic Brand ---over 1900 North American stores, more than 530 International Stores, 39 million active Loyalty Members. Knowledgeable, and passionate store associates, and a US based vertically integrated supply chain.
Invested heavily in building a strong foundation. Built Loyalty Program, enhancing technology into new categories.
Have not achieved a consistent, durable, and profitable growth they expect of themselves. The reality is clear -- they have grown, spanned, and increased retention of existing customers but they have not achieved the new customer growth they aspired to, or have not connected deeply enough with the younger consumers who are driving growth in the industry.
Q2 Made progress to Improvements to the Semi Annual Sale and launched successful Collections like Summerween with highlighting Halloween theme products during the late summer period.
Making strategic moves that resonate both with the current and future customers by maintaining and expanding operating margins. Pushing the marketing, digital, and merchandising team to work in a more integrated and omni channel way to deepen brand connection by telling powerful and emotional stories delivering innovative products and engaging consumers across all pulse points.
Entered into a MULTI YEAR partnership with ©DISNEY.
Three “No Regret” Moves
3 No Regret Moves: to shape the vision and strategy for the future.
1. Elevate digital platform -- not where it needs to be. Making rapid progress to address this. More Experiential, Frictionless, and Convenient, Meaningful, Enhanced Functionality, Better Product imagery, More Powerful Enriching, Storytelling. Beginning SEPTEMBER 2025.
2. Amplify Efficacy Messages. Better reflect Key Product Attributes like Efficacy, Safety, and Emotional Benefits -- these will help them connect with the consumer to reinforce the value of the product. The formulas are of exceptional quality, but the packaging doesn't emphasize it. They will evolve the packaging to more consistently educate the consumer and build awareness of the numerous benefits especially to the younger and ingredient conscious consumers.
For Example -- Starting This Fall: enhancing in store and online messages on Aromatherapy Line to focus on Stress Relief and Sleep.
Also, Body Lotion and Body Cream Products Packaging Will Highlight the 48 Hydration - and over time will update MORE NEW LABELS are dermatologist tested. Consistent and elevated messaging across all of the stores to reinforce trust in every product they offer.
3. Put Project in path of customer - Meet the customers where they are. In college bookstores at 600 Campuses, reaching 7 million students. Working on more ideas.
No regret initiatives will place them on the path to reach more consumers. Manage and merchandise store assortments, leverage store footprint for enhancing brand storytelling, maximize the potential of supply chains and beauty park, and drive growth across international markets.
Consumers tell them they walk into stores and feel it's overwhelming. They tend to lead with discounts and promotion...instead of highlighting product benefits.
Lead on Product Benefits, at lower Discounts.
Amplifying Store Footage - Bigger Bolder Store Windows Story Telling. Used to activate and tell stories to draw in new consumers.
Quarter Highlights
- Accelerating top line growth while maintaining or expanding margins
- Enhancing operational excellence
- Consistently deploying our strong cash flow to invest in growth opportunity's and return value to share holders
Strong SAS - Thanks to Focused execution by the team - to align with shifted SAS two weeks earlier to better align with market dynamic and consumer mindset. Right mix of products and clearly signaling the sale event drawing in deal-seeking shoppers from the start.
Built excitement across social media - Billie the Duck their newly relaunched brand mascot became a breakout star - driving strong engagement across platforms and generated over 260 M impressions.
Partnerships with Leading Fragrance Influencers help boost awareness and traffic online and in stores.
Sanitizer business performed above the shop; consumers responding positively on the moisturizing sanitizer and one oz sprays. Mother's Day was disappointing, needed more New Fragrances. Growth in Men's, and True-Blue Spa relaunch.
Halloween fan-favorite fragrances (Vampire Blood and Ghoul Friend) performed well -- Summerween product collection "Frankenstein's Bakery" Concept featuring I Scream Float launched earlier and became a standout hit.
Introduced Ceramic Candle vessel - elevating the assortment
Q3 will bring more Newness and Collaborations this Fall.
Building on the success of the Princess Collaboration this Villains launch will be available to consumers globally.
Loyalty & Sales Metrics
This quarter:
New Deployment Point of Sale Systems - easier to navigate and allows a better customer experience.
Loyalty Program is preforming well: up 5 % from the prior year:
Increase Spending
Trip frequency
Cross Channel Purchasing
Retention
Stores & Operations
Moving to off mall locations: 58% of fleet in off mall locations.
20 New North America Stores Off Mall, closing 16 in malls.
Opened 14 International Stores, closed 1. International store expansion plans for 2025 to net 30 new stores.
Strategic Sourcing to help with tariffs. Recent removal of Canadian retaliatory tariffs effective September 1st. For the full year, they expect tariffs net and mitigation efforts, to negatively impact gross profit by approx. 85 million net impacts in tariffs. 40 million impact of it in Q3.
10% imports from China, and 7% imported from Canada and Mexico.
China tariff's 145% - between April 9 - May 13
Changed Retail Calendar - Launched Halloween Earlier and made space for Father's Day.
Key drivers for this quarter - ©DISNEY VILLAINS, Fall Assortment, and Single Fragrance Launch at the end of the Quarter.
Editing to Smaller Assortments Selections with lower discounts.
Marketing & Social Media
Incredible Social Following - 7.4 million Followers on IG
Posting not programming -- Reframing the social as a growth system
Content
Community
Commerce
Creative
Elevating marketing brand - photography, telling bigger and bolder stories. In Stores: Creating innovative, and Coveted product and telling bold and emotional stories bringing it to life... consumers will notice the elevated story telling in the fleet. Off mall stores offer thousands of feet of windows - to utilize eye catching windows into fall and holiday. Consumers are responding.
Digital Roadmap
Digital Business is not up to their standards. Stores are beautiful and experiential. Digital platform is not. They are on changing it and consumers will notice it with the photos from ©DISNEY, moving at the pace of the consumer.
NEW APP - September 2025
MOBIL WEB - October 2025
3/6/9/12 month to drive sales in store and online to capture the new consumer.
Closing Thoughts
The call made it clear: Bath & Body Works is shifting from discount-driven strategies to consumer-focused storytelling, efficacy messaging, and digital transformation — with Disney partnerships and bold seasonal launches as the icing on the cake.
