Yahoo Finance Live anchors discuss Wall Street analyst expectations for Bath & Body Works as well as reports that Victoria's Secret is cutting 5% of staff amid a broader reorganization.
BRAD SMITH: Raymond James initiating coverage of the company with a strong buy rating and a $45 price target. The analyst citing a long runway for growth [? undepreciated ?] by the market. I just love the title of this note that they had, which was a deal that makes "scents"-- or it makes sense, was what they were saying. "BBWI makes a lot of scents." And their recommendation here, they're looking for comps to normalize. Runway of growth is also what they're seeing ahead. And it's really supported by the market share that they have in the personal care and home fragrances business, mostly domestic, vertically-integrated supply chain as well.
Could help out people [INAUDIBLE]
BRIAN SOZZI: I have no problems with Bath and Body Works. The call makes absolute sense to me. Most important, they sell what I would think, or what I would say, are evergreen products. If you come out with smelly candles that are designed, that have pumpkin smell to them for the fall, if they don't sell, you could stick them in a warehouse and sell them the following year. That's a good place to be in a retail environment where you're seeing a lot of markdowns.
I like evergreen products. And then, lastly, 85% of their supply chain is domestic. At a time we're seeing more pressure on China supply chains because of spikes, again, in COVID cases, I like that positioning.
JULIE HYMAN: The market's not buying it. And we're seeing the stock fall despite this call, with the rest of the market on concerns about inflation, right? So we'll see if people come back into it, if this analyst ends up being right about this making a lot of sense.
BRIAN SOZZI: Our crew loves this place.
JULIE HYMAN: I, for one, I can't walk into a Bath and Body Works.
BRAD SMITH: No.
JULIE HYMAN: Like, I just start sneezing. My eyes start watering. I can't. It's not a pleasant experience.
BRAD SMITH: A lot of people apparently are continuing to walk into that experience voluntarily. They're citing 57% repeat customer, long history of increasing spend among those customers as well. But I, like you, I don't believe I walk in there willingly, at least at this point.