12 Best Beauty Stocks to Buy According to Hedge Funds

9. Bath & Body Works Inc. (NYSE:BBWI)

Number of Hedge Fund Holders: 36

One of the Best Beauty Stocks, Bath & Body Works, Inc. (NYSE:BBWI) is a business of scented personal care products and specialized home fragrances that goes by the names White Barn, C.O. Bigelow, and Bath & Body Works. It is an established business among consumers seeking fragrances, personal care creams and soaps, candles, air fresheners, house fragrances, and other flavoring items. The leading brand in personal care and home fragrance has 480 franchises internationally, in addition to 1,850 outlets in North America.

Third-quarter 2024 net sales for Bath & Body Works, Inc. (NYSE:BBWI) were $1.61 billion, up by 3% YoY from $1.56 billion in Q3 2023. Its targeted implementation of the five E strategy and strategic investments are driving the business toward long-term, profitable growth. Elevating the company’s brand and core products, interacting creatively with its core clientele, expanding into new markets and adjacent areas, improving the omnichannel experience, and boosting operational excellence and efficiency are the five E’s of its strategy. In fiscal quarter three of 2024, it made progress in each of these areas.

In Q3 of 2024, Bath & Body Works, Inc. (NYSE:BBWI)’s $0.49 earnings per diluted share were above the company’s forecast. Net income was $106 million, while operating income was $218 million, up from $221 million the previous year. Adjusted earnings per share increased to $0.48 after excluding a one-time gain in 2023. The company raised its projection for fiscal year 2024, predicting a 1.7% to 2.5% fall in full-year net sales and an adjusted EPS of $3.15 to $3.28. A calendar shift is anticipated to cause net sales to drop 4.5% to 6.5% in Q4 2024, with an expected EPS of $1.94 to $2.07. Strong innovation, marketing expenditures, and a dynamic U.S.-based supply chain were highlighted by CEO Gina Boswell as the main sources of momentum as the holiday season approached.

Another priority for Bath & Body Works, Inc. (NYSE:BBWI) is store expansion. The conclusion of fiscal Q3 2024 saw the opening of its 500th overseas location in London. Its partner store openings for the year are on schedule, with approximately 50 net new stores.

The price objective for Bath & Body Works, Inc. (NYSE:BBWI) was increased by Wells Fargo from $32 to $38. Although Bath & Body Works’ inflection is finally beginning to take shape, the company claims that the improved top line comes at the sacrifice of margin. Wells continues, “All in, better than feared with numbers going up, but the debate probably carries on.”