Bath & Body Works, Inc.

Good morning. My name is Melissa, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Bath and Body Works second quarter 2026 earnings conference call. Please be advised that today's conference is being recorded. During the question and answer portion, you may ask a question from the phone by pressing star 1. I'll now turn the call over to Luke Long, Vice President of Investor Relations. Luke, you may begin.

Good morning and welcome to Bath and Body Works' second quarter 2026 earnings conference call. Joining me on the call today are Daniel Heaf, Chief Executive Officer, and Tom Javitch, Interim Chief Financial Officer. In addition to this call and this morning's press release, we have posted a slide presentation on our website that summarizes the information in these prepared remarks and provides some related facts and figures regarding our operating performance and guidance. As a reminder, some of the comments today may include forward-looking statements related to future events and expectations. For factors that could cause the actual results to differ materially from these forward-looking statements, please refer to the risk factors in Bath and Body Works 2025 Form 10-K. Today's call also contains certain non-GAAP financial measures. Please refer to this morning's press release and supplemental materials for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measure. With that, I'll turn the call over to Daniel.

Thank you, Luke, and good morning, everyone. Today, I'll review our second quarter performance, provide an update on the progress we're making against our consumer-first formula, and share how we're positioning the business for the second half of the year. Our second quarter results exceeded our expectations. Net sales declined 2.3% ahead of our guidance range of down 5 to down 3. And adjusted earnings per diluted share was $0.62, above our guidance range of $0.20 to $0.25. Adjusted earnings per diluted share included the benefit from approximately $80 million of tariff refunds received in the quarter. Excluding this benefit, adjusted earnings per dilutive share would have been $0.31, $0.06 above the high end of our guidance range. While the underlying business remains pressured and our performance is not yet where we want it to be, we are where we expect it to be and our teams are moving at pace to execute our strategy. Last quarter, we described early evidence that the consumer-first formula was beginning to work. This quarter, that evidence is becoming more tangible and quantifiable with sequential improvement in body care, a return to growth in digital, and accelerated growth in expanded distribution. These proof points strengthen our confidence that our actions are gaining traction but they are not yet broad enough to signal an inflection in the overall business. Based on our second quarter performance and our outlook for the balance of the year, we are narrowing our full year net sales guidance by raising the low end to down four while maintaining the high end at down 2.5. We are also raising our adjusted earnings per diluted share guidance to $2.60 to $2.80, reflecting our second quarter outperformance and latest view of the business. We have been clear since introducing the Consumer First Formula nine months ago that returning Bath and Body Works to sustainable growth is a multi-year transformation. 2026 remains an investment year. Building consideration and trust with new consumers require sustained product innovation, continued investment in demand creation, and consistent execution. Our priority in the back half is to continue to strengthen the underlying drivers of sustainable growth while closely tracking leading indicators to validate our actions are working ahead of our goal of revenue growth in 2027. With that context, let me turn to the progress we are making against our four strategic priorities. First, creating disruptive and innovative products. As we set out last quarter, we are bringing greater focus and discipline to how we develop and bring product innovation to market. We are concentrating resources behind our hero categories and franchises. where our leading market position and attractive category growth give us the greatest right to win. During the quarter, we launched Fruit Fusion, a new body care franchise designed as a hydration routine. It pairs distinctive fragrances with new dermatologist-approved formulas designed to layer hydration throughout the routine. We also introduced more functional packaging. For example, Our moisturizing body wash now includes a pump and more product at the same price, delivering better functionality and greater value at a time when consumers are often being asked to pay more for less. The launch exceeded our sales expectations and achieved a higher AUR than our core fragrant body care assortment and drove strong customer engagement with several forms selling out. Importantly, Food Fusion is designed as an enduring franchise rather than a seasonal collection, and we plan to build on its success through additional fragrances in September and form extensions in 2027. The commercial response to Food Fusion gives us greater confidence in an integrated model that brings differentiated products, cultural relevance, and coordinated demand creation together behind a focused launch. In the second half, consumers will see stronger innovation pipelines across our hero categories, combining proven franchises, modernized icons, and new platforms for future growth. Everyday luxuries will demonstrate how we can scale a proven franchise. After restoring 10 of its top fragrances during the second half, The franchise performed ahead of our expectations and contributed to the sequential improvement in body care. In the second half, we will build on that momentum with higher fragrance loads, a new eau de parfum form, and five new fragrances. A Thousand Wishes will demonstrate how we are modernizing and extending our most iconic fragrances. In the second half, We will enhance fragrance performance, elevate packaging, and expand the franchise with a new fragrance flanker, A Thousand Wishes Granted, designed to recruit new consumers while staying true to what customers love about the original. In Q3, we will also introduce new franchise platforms across body care and home fragrance. For example, the Reserve Collection, which launched on Monday brings a more elevated design-led proposition to home fragrance, including a new four-wick candle and liquidless reed diffusers. These new platforms will begin at a seed scale, and they are not expected to materially affect our near-term financial results. They are designed to build brand equity, test new consumer propositions, and establish the platforms that will scale over time. Consumer response will help determine where we invest and which we scale in 2027. Finally, greater focus also means being clear about where we choose not to compete. We continually evaluate our portfolio and assortment against our strategy and each category's financial contribution. As part of that ongoing discipline, we have decided to exit home care, which includes our laundry and kitchen products. The category represents less than 1% of our annual sales and creates disproportionate product and operating complexity without generating the productivity or incremental demand required to justify the cost. Second, reigniting the brand. Bath and Body Works has always been grounded in a simple belief. Everybody deserves to feel good. Inspired by the optimism, warmth, and creativity of the American spirit, we create sensorial products and experiences for everybody, giving the brand a distinctive and broadly relevant place in consumers' lives. The enduring emotional connection is guiding how we shape our products, tell our stories, and show up in culture as we work to deepen consumer engagement and build stronger demand. To bring this brand promise to life more consistently, we are building a modern demand creation model that connects our most important product stories with relevant talent, creator content and culture. We are encouraged by the early signs that these efforts are beginning to resonate. Strong net promoter scores, Improving social sentiment and growing awareness amongst non-consumers suggests that the brand is gaining cultural relevance and strengthening its opportunity to attract new consumers. Butte Fusion provided our first example of this model in the second quarter. It was the first time Bath and Body Works teamed up with a celebrity at this scale, with Hilary Duff serving as an ambassador and creative partner. As a longtime fan of Bath & Body Works, with relevance across generations, she brought a genuine affinity for the brand to the partnership. We amplified the launch through coordinated, creator-led campaign, another first for the brand. The campaign generated approximately 615 million impressions and contributed to over 50,000 new social followers, bringing Bath & Body Works into the cultural conversation with new audiences. Together with the strong commercial response, these results provide early evidence that greater cultural relevance and awareness can strengthen demand. The launch is also a repeatable playbook. We intend to continue to apply this demand creation model behind our most important product launches in the second half. One component of that playbook we are now scaling is creator activation. The creator interest in working with Bath and Body Works is strong, giving us an efficient way to tell our stories authentically. We have significantly expanded our creator network and expect to mobilize thousands of creators across a range of audience sizes to support our holiday campaigns. Looking ahead, consumers will see fewer, bigger, and more coordinated brand moments that bring together product innovation Talent, Creator Content, and Seasonal Storytelling. Third, winning in the marketplace. Across digital and expanded distribution, we continue to see some of the clearest signs of progress. Our owned digital business returned to growth in the quarter, improving four percentage points sequentially from Q1. We expected digital to be among the first areas where the consumer-first formula would translate into measurable results. The return to growth, coupled with increases in new, existing, and reactivated digital customers, provides early evidence that stronger product storytelling, improved discovery, personalization, and demand creation are beginning to work and helping us reach consumers beyond our existing customer base. This progress is particularly meaningful because we have not grown our e-commerce business since 2021, leaving a significant opportunity to capture a greater share of the category growth over time. Expanded distribution was another area of measurable progress in the quarter. Amazon continues to scale quickly with net sales more than tripling compared with the first quarter. We are now one of the largest candle brands on the platform. As more category spending shifts to Amazon over time, our presence allows us to meet consumers where they are already shopping and participate in that growth. The channel is attracting a higher mix of new to brand consumers who skew younger and more affluent while delivering a higher AUR than our own channels, reinforcing our confidence that Amazon can expand our reach and drive incremental growth. During the second quarter, we launched with Ulta Beauty across approximately 600 stores, creating new points of discovery for the brand within specialty beauty. While still early, the initial response has been encouraging. and supports our belief that thoughtfully selected partnerships can help introduce Bath and Body Works to new consumers. Together, Amazon and Ulta expand discovery, broadening our reach and reinforcing a consistent brand experience across channels while maintaining the strength and distinctiveness of our own channels. During the second quarter, we completed a merchandising reset across our full store fleet, the first in a series of improvements to the existing store experience. Clearer signage and more intuitive layouts organized by fragrance, form, and franchise are designed to make our assortment easier to understand and products easier to discover. Initial feedback from consumers and associates has been positive. and we will continue to evolve the store experience to improve new consumer acquisition, conversion and store productivity. International remains an attractive asset-like opportunity to expand the reach of Bath and Body Works globally. Despite continued conflict in the Middle East, international retail sales increased 9% versus last year and we are pleased with the early performance in Brazil, which opened in July. Finally, operating with speed and efficiency. Supporting all of this work is our continued focus on simplification, speed, and disciplined execution. Through Fuel for Growth and broader operational improvements, we are creating capacity to reinvest behind innovation, marketing, digital capabilities, and marketplace expansion, while strengthening the long-term foundation of the business. Before I close, I want to thank our associates for their continued dedication to serving customers and advancing our strategy. The progress we are making is a reflection of their commitment and hard work. The second quarter provided evidence the consumer-first formula is beginning to work, with progress in digital, encouraging early reads from product innovation, growth in expanded distribution and continued improvement in several of our strategic indicators. As we move to the second half, we are focused on improving those outcomes while continuing to build the product, brand, and marketplace capabilities that will support durable growth. We are confident in our strategic direction and focus on disciplined execution, advancing these initiatives together and at sufficient scale to change the trajectory of the business and build momentum throughout 2027. With that, I'll turn the call over to Tom to review our financial results and outlook. Thank you, Daniel, and good morning, everyone.