10 Best Skincare Stocks to Buy According to Hedge Funds

3. Bath & Body Works, Inc. (NYSE:BBWI)

Number of Hedge Fund Holders: 57

Bath & Body Works, Inc. (NYSE:BBWI) is a company that manufactures scented personal care products and specialized home fragrances under the brand names White Barn, C.O. Bigelow, and Bath & Body Works. It is an established business among consumers seeking fragrances, skincare, personal care creams and soaps, candles, air fresheners, house fragrances, and other flavoring items. In addition to 1,850 locations in North America, the top personal care and home fragrance brand has 480 franchises internationally.

Bath & Body Works, Inc. (NYSE:BBWI) had record-breaking growth in loyalty memberships in 2024, with active membership rising 6% annually and loyalty customers accounting for 80% of sales. These consumers continue to spend more and shop across channels more frequently than non-members. The firm exceeded initial goals by delivering $155 million in incremental cost reductions through its Fuel for Growth program throughout the year, bringing the two-year total to over $300 million. The company’s diluted EPS of $2.09 was above forecasts, and its Q4 net sales of $2.8 billion exceeded the high end of guidance.

The Everyday Luxuries brand, inspired by prestige scents, appealed to a younger and more diversified customer base. Record-high retention rates can be attributed to improvements in the customer experience, as seen by the fact that 57% of North American stores are now located outside of malls. Last but not least, a 20% growth in areas not impacted by the Middle East crisis drove a roughly 10% increase in foreign retail sales.

Baird maintained its Outperform rating on Bath & Body Works, Inc. (NYSE:BBWI) shares and increased the company’s price target from $45 to $47. The company stated that the quarter exhibited a strong holiday season and that there is potential for improvement in the guidance. According to Baird, they would purchase the shares in the event of a decline.