Bath & Body Works’ new chief executive officer Daniel Heaf blasted the retailer’s existing strategy as he unveiled his new strategic plan, signaling a launch on Amazon next year.
The company also turned in weaker-than-expected third-quarter earnings and a revised outlook, pressuring the stock, which tumbled 25 percent to $15.77 in midday trading on Wall Street.
Speaking to analysts in a post earnings call Thursday, Heaf, who joined the company in May, stressed that while the consumer environment is tougher, “this is no excuse as we continue to underperform the sector.”
Providing a diagnosis of what went wrong, he said:
- Bath & Body Works pursued adjacent categories to attract new customers, but did not deliver the growth expected and instead reduced its focus on core categories.
- Collaborations that should have been used to drive excitement, energy and equity were used to carry quarters.
- The retailer relied too heavily on deeper and more frequent promotions.
“Our organization has become slow and inefficient. Unnecessary complexity has reduced our speed, dampened our innovation, and we prioritized efforts that were not targeted to acquiring a new and younger consumer. Unlocking the next phase of growth requires decisive action,” he said.
With his new strategy, the Consumer First Formula, he wants to focus on addressing the issues within its control to return to growth. “This will take time — 2026 will be a year of investing behind our brand to strengthen our fundamentals and position our business for sustainable long-term growth,” Heaf said.
This includes boosting innovation in core categories and exiting categories like hair and men’s grooming; reigniting brand position through more targeted brand moments and deeper creator advocacy; acquiring new consumers by meeting them where they are, and operating with speed and efficiency.
To broaden its consumer exposure, Bath & Body Works will launch on Amazon in 2026.
“We know that we need to be in their path. And you’ll see us launch on Amazon, early next year. We already know that we’re doing somewhere between $60 million to $80 million of gray-market sales in that channel that is brand dilutive and, pro-tip, dilutive. And so launching there is an incredible sales opportunity, but also an opportunity to reignite the brand,” he said.
Part of the strategy involves building out the executive team. This week, Bath & Body Works announced Veronique Gabai will join as creative product and brand adviser. This followed the appointments of Maly Bernstein, the former head of Bluemercury, as chief commercial officer and Samantha Charleston as chief human resources officer.
“We’ve added tremendous talent to our team where we saw gaps and where we saw a need to improve our execution ability,” said Heaf.
The company reported net sales of $1.59 billion for its third quarter ended Nov. 1, a decrease of 1 percent compared to the same period a year earlier. Wall Street had pencilled in $1.63 billion on average.
Earnings per diluted share slipped to 37 cents for the third quarter, compared with 49 cents last year and analysts’ estimates of 39 cents.
As a result, the company downgraded its full-year 2025 net sales guidance from an increase ranging from 1.5 percent to 2.7 percent to a decline in the low single digits.
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