The Tariff Benefit of Bath & Body Works: A Shopper's Guide

Amidst a landscape of fluctuating tariffs, one beloved American retailer finds itself strategically positioned.

Domestic Manufacturing Edge

Over the last decade, Bath & Body Works has steadily increased its production within the United States, with 80% of its goods now made domestically. This decision strategically shields the company from many of the import fees its rivals encounter.

According to Lorraine Hutchinson, a senior retail analyst at BofA Securities, the company's focus on U.S.-based manufacturing provides it with a unique advantage, allowing it to maintain its price points and protect its profit margins.

U.S. Production Hub: Beauty Park Facility

The decision to invest in domestic production was anchored in agility, emphasizes Simeon Siegel from BMO Capital Markets. He notes that locating the primary manufacturing hub in New Albany, Ohio—where the Beauty Park facility opened in 2012—enables Bath & Body Works to swiftly respond to customer demands and reduce the need for discounts.

The logistical efficiency is exemplified by their foaming hand soap. Previously, parts like bottles and caps traveled from Canada and pumps came from China, with assembly in Virginia before reaching Ohio distribution. Now, the entire process is condensed to three weeks and conducted at Beauty Park.

Evolving Sales Dynamics

Sales at Bath & Body Works have tapered since the pandemic's peak in 2021, when consumer demand for their hygiene products surged, generating nearly $7.9 billion in revenue. The company now forecasts growth for 2025, marking a potential rebound after years of waning sales.

Simeon Siegel points out that past sales stagnation wasn't just a result of market trends but also due to oversaturation in product purchases during Covid-19. As market conditions stabilize, Bath & Body Works is anticipated to experience a more consistent upward trend.