Why Is Bath and Body Works Stock So Cheap?

Andrew Willis: Not to be confused with Bed Bath and Beyond, this company's sales actually went up over the pandemic. Way up. But more recently, the number-one bath, body, and beauty store in America has seen a slowdown in sales as customers skip the scented candles to help pay for grocery bills.

Bath and Body Works is feeling the effects of inflationary pressures on consumer discretionary spending, which may be worrying some investors, but we have to keep in mind this comes after a whopping 45% increase in sales compared to prepandemic figures. Senior equity analyst Jaime Katz says that inflationary and supply chain tensions should eventually subside, and Bath and Body Works has demonstrated an ability to maintain and gain market share independent of external conditions.

Even now, the company is considering expanding its target market into skincare and haircare, which, with the launch of a new loyalty program, should encourage some discretionary spending among up to 60 million consumers.

From Morningstar, I’m Andrew Willis.

Check out Morningstar.ca to watch Why is Amazon so Cheap?