Dear Fellow Shareholders,
As we reflect on fiscal 2025, it has been a year of transition fueled by change and transformative, innovative energy to help set the groundwork for success in 2026 and beyond. Bath & Body Works is a business with meaningful and durable advantages: an iconic brand with deep customer affection, category-leading fragrance franchises, a large and highly engaged loyalty base of 40 million members, a fast and flexible domestic supply chain, and a global fleet of 2,500 stores. These are powerful assets that we believe position us to win.
In 2025, the Board of Directors fulfilled a key governance responsibility by guiding a planned CEO transition. Under this new leadership, we acknowledged that recent performance does not fully realize the Company’s potential. In response, we introduced the Consumer First Formula, a comprehensive, multi-year strategy to drive sustainable, profitable growth by placing the consumer back at the center of every decision.
Our Plan: The Consumer First Formula
First, Create Innovative, Disruptive Product. We are refocusing on our hero categories where we believe that our brand and expertise give us the strongest right to win - body care, home fragrance, and soaps & sanitizers. Our innovation pipeline is grounded in deeper consumer insight, earlier testing, and a sharper focus on benefits.
Second, Reignite the Brand. Bath & Body Works has high awareness, but awareness alone is not enough. We must earn greater cultural relevance and give new and younger consumers stronger reasons to choose us. We believe that this requires clearer positioning, more distinctive storytelling, and a more elevated, creator-led, and digitally driven marketing model.
Third, Win in the Marketplace. We are putting ourselves in the path of the consumer. Our store fleet remains a significant competitive advantage, and we are improving the in-store experience through simplification and better navigation. At the same time, our Amazon launch and digital investments expand our reach to new and lapsed consumers. Internationally, our partners continue to deliver strong growth, providing an additional avenue for expansion.
Fourth, Operate with Speed & Efficiency. We are simplifying how we operate and reallocating resources to the highest-impact opportunities. Our Fuel for Growth program targets $250 million in cost savings over two years, including $175 million in 2026. These savings will fund investments in product, brand, and distribution while increasing the speed and agility of the organization.
We have also strengthened leadership across key functions, including merchandising, digital, wholesale, stores, and brand. Equally important is the culture we are cultivating - one that is more agile, accountable, and creative, with a strong consumer-centric foundation.
Board Support
As we navigate our transformation, we remain grounded in strong corporate governance and support the creation of long-term value for our shareholders.
We are committed to ensuring balanced and thoughtful allocation of capital, as we invest in the new strategy while returning cash to shareholders. We were pleased to pay $167 million in dividends and repurchase approximately 15 million shares of common stock for $400 million in 2025.
We are focused on ensuring our executive compensation program is designed to drive shareholder value creation and top-line growth. This past year we started transitioning our short-term incentive program to an annual program to better align with market practice. In 2026, we will evolve our executive compensation program to support the Consumer First Formula.
We believe that our significantly refreshed Board of Directors has the optimal structure and composition with the right mix of expertise, backgrounds, and tenures. If all nominees are elected to serve as directors at the 2026 annual meeting, the average tenure will be 5 years, with 90% of the directors joining in 2019 or later.
Looking Ahead
The work is well underway, and customers and shareholders will see increasing momentum throughout 2026 and into 2027. We remain confident in our ability to deliver to all our stakeholders. We believe that we have the platform, the plan, and the team to win.
The Company and the Board are committed to ongoing engagement with our shareholders. We continue to listen, learn and implement feedback that supports our Company’s long-term growth.
Thank you for your continued support and confidence in Bath & Body Works. We respectfully ask for your voting support on the matters set forth in this proxy statement.
Sincerely,
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Daniel Heaf
Chief Executive Officer
Bath & Body Works, Inc. | | |
Sarah E. Nash
Board Chair
Bath & Body Works, Inc.
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| | | Thank you for your continued support and confidence in Bath & Body Works. We respectfully ask for your voting support on the matters set forth in this proxy statement. |
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