Is BBWI a good stock to buy? We came across a bullish thesis on Bath & Body Works, Inc. on r/ValueInvesting by Embarrassed_Cut_8775. In this article, we will summarize the bulls’ thesis on BBWI. Bath & Body Works, Inc.’s share was trading at $19.63 as of June 22nd. BBWI’s trailing and forward P/E were 5.84 and 6.96 respectively according to Yahoo Finance.
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Bath & Body Works, Inc. operates as a specialty retailer of personal care and home fragrance products. BBWI is presented as a compelling deep-value turnaround opportunity trading at valuation levels that imply a far more severe deterioration than the business has actually experienced. While revenue has gradually declined from $7.56 billion in fiscal 2023 to approximately $7.25 billion over the trailing twelve months, the decline has been slow and manageable rather than indicative of a business in structural collapse.
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More importantly, profitability has remained remarkably resilient throughout this period. Gross margins have consistently remained in a narrow range between 43% and 44%, demonstrating the strength of the company’s brand, pricing power, and private-label business model. Net income has also remained relatively stable, fluctuating between roughly $649 million and $878 million over recent years and recovering to $727 million on a trailing twelve-month basis, despite ongoing revenue pressure.
The investment thesis centers on whether management can successfully stabilize and eventually return the top line to growth. The company’s challenges are tied in part to declining traffic at enclosed shopping malls, where many of its stores have historically been located. To address this issue, management has been actively shifting its footprint toward off-mall locations, which now represent approximately 60% of stores, with a long-term target of reaching 75% penetration across North America.
This strategy could help offset traffic headwinds and improve long-term growth prospects. Even if revenue growth remains elusive, the company’s durable margins, strong cash generation, and stable earnings profile appear inconsistent with its current valuation. Trading at a trailing P/E of just 5.76 and a forward P/E of roughly 7, far below peers such as Ulta Beauty, Bath & Body Works offers substantial upside if management’s turnaround initiatives succeed.
A successful return to revenue growth could transform the company from a traditional value investment into a significant rerating opportunity, while the current valuation provides investors with an attractive margin of safety.
Previously, we covered a bullish thesis on Ulta Beauty, Inc. (ULTA) by @wallstengine in May 2025, which highlighted improving consumer engagement, easing competitive pressures, conservative guidance, and the potential for earnings and multiple expansion. ULTA’s stock price has appreciated by approximately 14.25% since our coverage. Embarrassed_Cut_8775 shares a similar view but emphasizes Bath & Body Works’ deeply discounted valuation, resilient profitability, and turnaround-driven upside.
Bath & Body Works, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 52 hedge fund portfolios held BBWI at the end of the first quarter which was 52 in the previous quarter. While we acknowledge the risk and potential of BBWI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BBWI and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
