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DE 31-1029810 Three Limited Parkway Columbus, OH 43230 (614) 415-7000 Not Applicable Yes Yes Large Accelerated Filer false false false Common Stock, $0.50 Par Value BBWI NYSE 201561812 1378000000 1424000000 791000000 778000000 587000000 646000000 356000000 437000000 231000000 209000000 69000000 71000000 4000000 8000000 166000000 146000000 -17000000 41000000 183000000 105000000 0.91 0.49 0.90 0.49 183000000 105000000 0 6000000 0 -3000000 0 1000000 0 2000000 183000000 107000000 820000000 953000000 636000000 98000000 180000000 103000000 782000000 699000000 869000000 81000000 81000000 97000000 118000000 106000000 115000000 1899000000 2019000000 1820000000 1106000000 1127000000 1111000000 974000000 941000000 970000000 628000000 628000000 628000000 165000000 165000000 165000000 110000000 112000000 133000000 81000000 77000000 54000000 4963000000 5069000000 4881000000 557000000 465000000 452000000 513000000 579000000 495000000 0 280000000 0 206000000 195000000 201000000 101000000 72000000 146000000 1377000000 1591000000 1294000000 115000000 65000000 23000000 3613000000 3612000000 3886000000 894000000 867000000 895000000 95000000 213000000 233000000 1.00 1.00 1.00 10000000 10000000 10000000 0 0 0 0 0 0 0.50 0.50 0.50 1000000000 1000000000 1000000000 217000000 216000000 227000000 201000000 201000000 212000000 108000000 108000000 113000000 799000000 794000000 818000000 74000000 74000000 73000000 -1292000000 -1435000000 -1633000000 15000000 15000000 15000000 822000000 822000000 822000000 -1133000000 -1281000000 -1451000000 2000000 2000000 1000000 -1131000000 -1279000000 -1450000000 4963000000 5069000000 4881000000 201000000 108000000 794000000 74000000 -1435000000 -822000000 2000000 -1279000000 183000000 183000000 0 0 0 183000000 183000000 0.20 40000000 40000000 5000000 0 5000000 201000000 108000000 799000000 74000000 -1292000000 -822000000 2000000 -1131000000 216000000 115000000 829000000 71000000 -1578000000 -822000000 2000000 -1383000000 105000000 105000000 2000000 2000000 2000000 105000000 107000000 0.20 43000000 43000000 4000000 135000000 135000000 2000000 16000000 117000000 -135000000 0 0 5000000 -1000000 4000000 212000000 113000000 818000000 73000000 -1633000000 -822000000 1000000 -1450000000 183000000 105000000 61000000 64000000 8000000 10000000 3000000 0 -8000000 0 -62000000 0 -82000000 -103000000 83000000 134000000 34000000 14000000 29000000 34000000 13000000 8000000 244000000 188000000 49000000 37000000 8000000 0 1000000 2000000 -42000000 -39000000 289000000 0 0 136000000 40000000 43000000 3000000 4000000 -3000000 -5000000 -335000000 -188000000 0 1000000 -133000000 -38000000 953000000 674000000 820000000 636000000 Description of Business and Basis of Presentation
Description of Business
Bath & Body Works, Inc. (the “Company”) is a global leader in personal care and home fragrance. The Company sells merchandise through its retail stores in the United States of America (“U.S.”) and Canada, and through its e-commerce sites and other channels. The Company’s international business is conducted through franchise, license and wholesale partners.
Fiscal Year
The Company uses the retail calendar for reporting and its fiscal year ends on the Saturday nearest to January 31. As a result, “first quarter of 2026” and “first quarter of 2025” refer to the thirteen-week periods ended May 2, 2026 and May 3, 2025, respectively. References to “quarter” and “year” each refer to the fiscal calendar period.
Basis of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of all unconsolidated entities is included in Other Income, Net in the Consolidated Statements of Income. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value.
Interim Financial Statements
The Consolidated Financial Statements as of and for the periods ended May 2, 2026 and May 3, 2025 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s 2025 Annual Report on Form 10-K.
In the opinion of management, the accompanying Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods.
Seasonality of Business
The Company’s operations are seasonal in nature and the fourth quarter of the fiscal year, including the holiday selling season, typically accounts for the highest Net Sales and is its most profitable quarter. Due to the seasonal variations in the retail industry, the results of operations for the interim periods are not necessarily indicative of the results expected for the full fiscal year.
Derivative Financial Instruments
The Company’s Canadian dollar denominated earnings are subject to exchange rate risk as substantially all the Company’s merchandise sold in Canada is sourced through U.S. dollar transactions. The Company uses foreign currency forward contracts designated as cash flow hedges to mitigate this foreign currency exposure. Amounts are reclassified from Accumulated Other Comprehensive Income upon sale of the hedged merchandise to the customer. These gains and losses are recognized in Costs of Goods Sold, Buying and Occupancy in the Consolidated Statements of Income. All designated cash flow hedges are recorded on the Consolidated Balance Sheets at fair value. The fair value of designated cash flow hedges is not significant for any period presented. The Company does not use derivative financial instruments for trading purposes.
Supplier Finance Program
In the fourth quarter of 2024, the Company implemented a supply chain finance (“SCF”) program agreement with a third-party financial institution, whereby the Company’s merchandise suppliers have the opportunity to settle outstanding payment obligations early, at a discount, facilitated by the financial institution. Since implementation, merchandise suppliers have continued to join the program. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by suppliers’ participation in the arrangement and the Company provides no guarantees to any third parties under the SCF program. Amounts due under the SCF program are included in Accounts Payable in the Consolidated Balance Sheets and within Operating Activities in the Consolidated Statements of Cash Flows. Amounts due under the SCF program were $154 million, $115 million and $52 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively.
Concentration of Credit Risk
The Company maintains cash and cash equivalents and derivative contracts with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom it transacts and limits the amount of credit exposure with any one entity. The Company’s investment portfolio is primarily composed of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits.
The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which it grants credit terms in the normal course of business. The Company determines the required allowance for expected credit losses using information such as customer credit history and financial condition. Amounts are recorded to the allowance when it is determined that expected credit losses may occur.
Easton Investments
The Company has land and other investments in Easton, a planned community in Columbus, Ohio, that integrates office, hotel, retail, residential and recreational space. Beginning in the fourth quarter of 2024, certain of these investments met all of the required criteria for held for sale presentation, which requires assets to be reported at the lower of their carrying value or fair value less costs to sell. The investments classified as held for sale, consisting primarily of undeveloped land, are reported at their carrying value, which was $81 million, $81 million and $97 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively, within Current Assets on the Consolidated Balance Sheets.
During the second quarter of 2025, the Company changed its plan of sale for its Easton investments, causing certain of these investments to no longer meet the held for sale criteria. As a result of this change, the Company reclassified $17 million of carrying value from Current Assets to long-term Other Assets during the second quarter of 2025. The Company’s Easton investments not presented as held for sale and reported in Other Assets were $35 million, $38 million and $24 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively.
Interchange Fee Settlements
In the first quarter of 2026, the Company entered into settlement agreements to resolve payment card interchange fee litigation. As a result of the settlements, the Company recognized a pre-tax gain of $88 million, net of legal fees, as a reduction of General, Administrative and Store Operating Expenses in the first quarter of 2026 Consolidated Statement of Income.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates, and the Company revises its estimates and assumptions as new information becomes available.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses, which requires disclosures of disaggregated information about certain prescribed expense categories within relevant income statement expense captions. This standard is effective for annual reporting of fiscal years beginning after December 15, 2026, and for interim periods in the following year, with early adoption permitted. This standard should be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact of adopting this standard on its disclosures.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for software costs by removing project stages from capitalization criteria and further clarifies the threshold entities apply to begin capitalizing costs. This standard is effective for annual reporting of fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted. This standard can be applied prospectively, retrospectively or through a modified transition approach. The Company early adopted this standard prospectively in the first quarter of 2026. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements
Description of Business
Bath & Body Works, Inc. (the “Company”) is a global leader in personal care and home fragrance. The Company sells merchandise through its retail stores in the United States of America (“U.S.”) and Canada, and through its e-commerce sites and other channels. The Company’s international business is conducted through franchise, license and wholesale partners.
Fiscal Year
The Company uses the retail calendar for reporting and its fiscal year ends on the Saturday nearest to January 31. As a result, “first quarter of 2026” and “first quarter of 2025” refer to the thirteen-week periods ended May 2, 2026 and May 3, 2025, respectively. References to “quarter” and “year” each refer to the fiscal calendar period.
Basis of Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company accounts for investments in unconsolidated entities where it exercises significant influence, but does not have control, using the equity method. Under the equity method of accounting, the Company recognizes its share of the investee’s net income or loss. Losses are only recognized to the extent the Company has positive carrying value related to the investee. Carrying values are only reduced below zero if the Company has an obligation to provide funding to the investee. The Company’s share of net income or loss of all unconsolidated entities is included in Other Income, Net in the Consolidated Statements of Income. The Company’s equity method investments are required to be reviewed for impairment when it is determined there may be an other-than-temporary loss in value.
Interim Financial Statements
The Consolidated Financial Statements as of and for the periods ended May 2, 2026 and May 3, 2025 are unaudited and are presented pursuant to the rules and regulations of the Securities and Exchange Commission. These Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto contained in the Company’s 2025 Annual Report on Form 10-K.
In the opinion of management, the accompanying Consolidated Financial Statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods.
Seasonality of Business
The Company’s operations are seasonal in nature and the fourth quarter of the fiscal year, including the holiday selling season, typically accounts for the highest Net Sales and is its most profitable quarter. Due to the seasonal variations in the retail industry, the results of operations for the interim periods are not necessarily indicative of the results expected for the full fiscal year.
Derivative Financial Instruments
The Company’s Canadian dollar denominated earnings are subject to exchange rate risk as substantially all the Company’s merchandise sold in Canada is sourced through U.S. dollar transactions. The Company uses foreign currency forward contracts designated as cash flow hedges to mitigate this foreign currency exposure. Amounts are reclassified from Accumulated Other Comprehensive Income upon sale of the hedged merchandise to the customer. These gains and losses are recognized in Costs of Goods Sold, Buying and Occupancy in the Consolidated Statements of Income. All designated cash flow hedges are recorded on the Consolidated Balance Sheets at fair value. The fair value of designated cash flow hedges is not significant for any period presented. The Company does not use derivative financial instruments for trading purposes.
Supplier Finance Program
In the fourth quarter of 2024, the Company implemented a supply chain finance (“SCF”) program agreement with a third-party financial institution, whereby the Company’s merchandise suppliers have the opportunity to settle outstanding payment obligations early, at a discount, facilitated by the financial institution. Since implementation, merchandise suppliers have continued to join the program. The Company’s obligations to its suppliers, including amounts due and scheduled payment terms, are not impacted by suppliers’ participation in the arrangement and the Company provides no guarantees to any third parties under the SCF program. Amounts due under the SCF program are included in Accounts Payable in the Consolidated Balance Sheets and within Operating Activities in the Consolidated Statements of Cash Flows. Amounts due under the SCF program were $154 million, $115 million and $52 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively.
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Concentration of Credit Risk
The Company maintains cash and cash equivalents and derivative contracts with various major financial institutions. The Company monitors the relative credit standing of financial institutions with whom it transacts and limits the amount of credit exposure with any one entity. The Company’s investment portfolio is primarily composed of U.S. government obligations, U.S. Treasury and AAA-rated money market funds, commercial paper and bank deposits.
The Company also periodically reviews the relative credit standing of franchise, license and wholesale partners and other entities to which it grants credit terms in the normal course of business. The Company determines the required allowance for expected credit losses using information such as customer credit history and financial condition. Amounts are recorded to the allowance when it is determined that expected credit losses may occur.
Easton Investments
The Company has land and other investments in Easton, a planned community in Columbus, Ohio, that integrates office, hotel, retail, residential and recreational space. Beginning in the fourth quarter of 2024, certain of these investments met all of the required criteria for held for sale presentation, which requires assets to be reported at the lower of their carrying value or fair value less costs to sell. The investments classified as held for sale, consisting primarily of undeveloped land, are reported at their carrying value, which was $81 million, $81 million and $97 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively, within Current Assets on the Consolidated Balance Sheets.
During the second quarter of 2025, the Company changed its plan of sale for its Easton investments, causing certain of these investments to no longer meet the held for sale criteria. As a result of this change, the Company reclassified $17 million of carrying value from Current Assets to long-term Other Assets during the second quarter of 2025. The Company’s Easton investments not presented as held for sale and reported in Other Assets were $35 million, $38 million and $24 million as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively.
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Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates, and the Company revises its estimates and assumptions as new information becomes available.
Recently Issued Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Disaggregation of Income Statement Expenses, which requires disclosures of disaggregated information about certain prescribed expense categories within relevant income statement expense captions. This standard is effective for annual reporting of fiscal years beginning after December 15, 2026, and for interim periods in the following year, with early adoption permitted. This standard should be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact of adopting this standard on its disclosures.
In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which is intended to modernize the accounting for software costs by removing project stages from capitalization criteria and further clarifies the threshold entities apply to begin capitalizing costs. This standard is effective for annual reporting of fiscal years beginning after December 15, 2027, and for interim periods within those fiscal years, with early adoption permitted. This standard can be applied prospectively, retrospectively or through a modified transition approach. The Company early adopted this standard prospectively in the first quarter of 2026. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements Revenue Recognition
Accounts receivable, net from revenue-generating activities were $61 million as of May 2, 2026, $66 million as of January 31, 2026 and $67 million as of May 3, 2025. These accounts receivable primarily relate to amounts due from the Company’s franchise, license and wholesale partners. Under these arrangements, payment terms are typically 45 to 75 days.
The Company records deferred revenue when cash payments are received in advance of transfer of control of goods or services. Deferred revenue primarily relates to gift cards, loyalty points and rewards, and direct channel shipments not received by the
customer, which are all impacted by seasonal and holiday-related sales patterns. Deferred revenue, which is recorded within Accrued Expenses and Other on the Consolidated Balance Sheets, was $200 million as of May 2, 2026, $223 million as of January 31, 2026 and $177 million as of May 3, 2025. The Company recognized $68 million as revenue during the first quarter of 2026 from amounts recorded as deferred revenue at the beginning of its fiscal year.
The following table provides a disaggregation of Net Sales for the first quarters of 2026 and 2025:
First Quarter
20262025
(in millions)
Stores - U.S. and Canada (a)$1,062 $1,110 
Direct - U.S. and Canada246 250 
International and Other (b)70 64 
Total Net Sales$1,378 $1,424 
_______________
(a)Results include fulfilled buy online pick up in store orders.
(b)Results include royalties associated with franchised stores, as well as international and domestic wholesale sales.
The Company’s Net Sales outside of the U.S. include sales from Company-operated stores and its e-commerce site in Canada, royalties associated with franchised stores and international wholesale sales. Certain of these sales are subject to the impact of fluctuations in foreign currency. The Company’s Net Sales outside of the U.S. totaled $136 million and $132 million for the first quarters of 2026 and 2025, respectively 61000000 66000000 67000000 P45D P75D 200000000 223000000 177000000 68000000
The following table provides a disaggregation of Net Sales for the first quarters of 2026 and 2025:
First Quarter
20262025
(in millions)
Stores - U.S. and Canada (a)$1,062 $1,110 
Direct - U.S. and Canada246 250 
International and Other (b)70 64 
Total Net Sales$1,378 $1,424 
_______________
(a)Results include fulfilled buy online pick up in store orders.
(b)Results include royalties associated with franchised stores, as well as international and domestic wholesale sales.
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Net Income Per Share
Net Income per Basic Share is computed based on the weighted-average number of common shares outstanding. Net Income per Diluted Share includes the weighted-average effect of dilutive restricted share units, performance share units and stock options (collectively, “Dilutive Awards”) on the weighted-average common shares outstanding.
The following table provides the weighted-average shares utilized for the calculation of Net Income per Basic and Diluted Share for the first quarters of 2026 and 2025:
 First Quarter
20262025
(in millions)
Common Shares216 229 
Treasury Shares(15)(15)
Basic Shares201 214 
Effect of Dilutive Awards1 1 
Diluted Shares202 215 
Anti-dilutive Awards (a)— — 
 _______________
(a)These awards were excluded from the calculation of Net Income per Diluted Share because their inclusion would have been anti-dilutive.
Common Stock Repurchases and Retirements
The Company did not repurchase any shares of its common stock during the first quarter of 2026.
Under the authority of the Company’s Board of Directors, the Company repurchased shares of its common stock under the following repurchase programs during the first quarter of 2025:
Repurchase
Program		Amount
Authorized		Shares
Repurchased		Amount
Repurchased		Average Stock Price
202520252025
(in millions)(in thousands)(in millions)
January 2024$500 460 $17 $37.67 
January 2025500 3,866 118 $30.47 
Total4,326 $135 
On February 27, 2025, the Company cancelled the remaining $121 million authorization available under the January 2024 Program and began repurchasing shares under the January 2025 Program. The January 2025 Program had $117 million of remaining authority as of May 2, 2026.
Shares repurchased under these programs are retired and cancelled upon repurchase. As a result, the Company retired the 4.326 million shares repurchased during the first quarter of 2025.
Dividends
The Company paid the following dividends during the first quarters of 2026 and 2025:
Ordinary DividendsTotal Paid
(per share)(in millions)
2026
First Quarter$0.20 $40 
2025
First Quarter$0.20 $43 
In May 2026, the Company declared its second quarter 2026 ordinary dividend of $0.20 per share payable on June 19, 2026 to shareholders of record at the close of business on June 5, 2026.
The following table provides the weighted-average shares utilized for the calculation of Net Income per Basic and Diluted Share for the first quarters of 2026 and 2025:
 First Quarter
20262025
(in millions)
Common Shares216 229 
Treasury Shares(15)(15)
Basic Shares201 214 
Effect of Dilutive Awards1 1 
Diluted Shares202 215 
Anti-dilutive Awards (a)— — 
 _______________
(a)These awards were excluded from the calculation of Net Income per Diluted Share because their inclusion would have been anti-dilutive.
216000000 229000000 15000000 15000000 201000000 214000000 1000000 1000000 202000000 215000000 0 0
Under the authority of the Company’s Board of Directors, the Company repurchased shares of its common stock under the following repurchase programs during the first quarter of 2025:
Repurchase
Program		Amount
Authorized		Shares
Repurchased		Amount
Repurchased		Average Stock Price
202520252025
(in millions)(in thousands)(in millions)
January 2024$500 460 $17 $37.67 
January 2025500 3,866 118 $30.47 
Total4,326 $135 
500000000 460000 17000000 37.67 500000000 3866000 118000000 30.47 4326000 135000000 121000000 117000000 4326000
The Company paid the following dividends during the first quarters of 2026 and 2025:
Ordinary DividendsTotal Paid
(per share)(in millions)
2026
First Quarter$0.20 $40 
2025
First Quarter$0.20 $43 
0.20 40000000 0.20 43000000 0.20 Inventories
The following table provides details of Inventories as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Finished Goods Merchandise$615 $545 $696 
Raw Materials and Merchandise Components167 154 173 
Total Inventories$782 $699 $869 
Inventories are principally valued at the lower of cost or net realizable value, on an average cost basis.
The following table provides details of Inventories as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Finished Goods Merchandise$615 $545 $696 
Raw Materials and Merchandise Components167 154 173 
Total Inventories$782 $699 $869 
615000000 545000000 696000000 167000000 154000000 173000000 782000000 699000000 869000000
Inventories are principally valued at the lower of cost or net realizable value, on an average cost basis.
Long-lived Assets
The following table provides details of Property and Equipment, Net as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Property and Equipment, at Cost$3,333 $3,363 $3,250 
Accumulated Depreciation and Amortization(2,227)(2,236)(2,139)
Property and Equipment, Net$1,106 $1,127 $1,111 
Depreciation expense was $61 million and $64 million for the first quarters of 2026 and 2025, respectively. Capital Expenditures of $26 million, $34 million and $34 million remained unpaid as of May 2, 2026, January 31, 2026 and May 3, 2025, respectively.
The following table provides details of Property and Equipment, Net as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Property and Equipment, at Cost$3,333 $3,363 $3,250 
Accumulated Depreciation and Amortization(2,227)(2,236)(2,139)
Property and Equipment, Net$1,106 $1,127 $1,111 
3333000000 3363000000 3250000000 2227000000 2236000000 2139000000 1106000000 1127000000 1111000000 61000000 64000000 26000000 34000000 34000000 Income Taxes
The provision for income taxes is based on the current estimate of the annual effective tax rate and is adjusted as necessary for quarterly events.
For the first quarter of 2026, the Company’s effective tax rate was (10.1%) compared to 28.4% in the first quarter of 2025. The 2026 first quarter rate was lower than the Company’s combined estimated federal and state statutory rates primarily due to the resolution of certain tax matters. The 2025 first quarter rate was higher than the Company’s combined estimated federal and state statutory rates primarily due to accrued interest expense related to unrecognized tax benefits.
Uncertain Tax Positions
The Company had unrecognized tax benefits of $131 million as of January 31, 2026, of which $75 million, if recognized, would reduce the effective income tax rate. Through May 2, 2026, the Company had a net decrease to gross unrecognized tax benefits of $86 million, primarily due to the resolution of certain tax matters. The changes to the unrecognized tax benefits resulted in a $40 million benefit to the Company’s Provision for Income Taxes in the first quarter of 2026.
The Company recognizes interest and penalties related to unrecognized tax benefits as components of income tax expense. The Company had accrued $8 million and $36 million as of May 2, 2026 and January 31, 2026, respectively, for the payment of interest and penalties.
-0.101 0.284 131000000 75000000 86000000 -40000000 8000000 36000000 Long-term Debt and Borrowing Facility
The following table provides the Company’s outstanding debt balances, net of unamortized debt issuance costs and discounts, as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Senior Debt with Subsidiary Guarantee
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
$— $280 $277 
$444 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
444 444 443 
$482 million, 7.500% Fixed Interest Rate Notes due June 2029 (“2029 Notes”)
477 477 476 
$844 million, 6.625% Fixed Interest Rate Notes due October 2030 (“2030 Notes”)
840 839 839 
$802 million, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
797 797 797 
$575 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
571 571 571 
Total Senior Debt with Subsidiary Guarantee3,129 3,408 3,403 
Senior Debt
$284 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
284 284 283 
$201 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
200 200 200 
Total Senior Debt484 484 483 
Total Debt3,613 3,892 3,886 
Current Debt— (280)— 
Total Long-term Debt, Net of Current Portion$3,613 $3,612 $3,886 
Cash paid for interest was $82 million and $77 million for the first quarters of 2026 and 2025, respectively.
Repurchases of Notes
During the first quarter of 2026, the Company completed a make-whole call to repurchase the remaining $284 million principal amounts of its outstanding 2027 Notes. The repurchase price for these notes was $289 million, resulting in a pre-tax loss of $8 million, net of the write-off of unamortized discounts and issuance costs. This loss is included in Other Income, Net in the first quarter of 2026 Consolidated Statement of Income.
The Company did not repurchase any outstanding senior notes during the first quarter of 2025.
Asset-backed Revolving Credit Facility
The Company and certain of the Company’s 100% owned subsidiaries guarantee and pledge collateral to secure an asset-backed revolving credit facility (“ABL Facility”). The ABL Facility, which allows borrowings and letters of credit in U.S. and Canadian dollars, has aggregate commitments of $750 million and an expiration date in May 2030.
Availability under the ABL Facility is the lesser of (i) the borrowing base, determined primarily based on the Company’s eligible U.S. and Canadian credit card receivables, accounts receivable, inventory and eligible real property, or (ii) the aggregate commitment. If at any time the outstanding amount under the ABL Facility exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitment, the Company is required to repay the outstanding amounts under the ABL Facility to
the extent of such excess. As of May 2, 2026, the Company’s borrowing base was $554 million, and it had no borrowings outstanding under the ABL Facility.
The ABL Facility supports the Company’s letter of credit program. The Company had $9 million of outstanding letters of credit as of May 2, 2026 that reduced its availability under the ABL Facility. As of May 2, 2026, the Company’s availability under the ABL Facility was $544 million.
As of May 2, 2026, the ABL Facility fees related to committed and unutilized amounts were 0.30% per annum, and the fees related to outstanding letters of credit were 1.25% per annum. In addition, the interest rate on outstanding U.S. dollar borrowings was the Term Secured Overnight Financing Rate plus 1.25% per annum. The interest rate on outstanding Canadian dollar-denominated borrowings was the Canadian Overnight Repo Rate Average plus 1.25% per annum.
The ABL Facility requires the Company to maintain a fixed charge coverage ratio of not less than 1.00 to 1.00 during an event of default or any period commencing on any day when specified excess availability is less than the greater of (i) $70 million or (ii) 10% of the maximum borrowing amount. As of May 2, 2026, the Company was not required to maintain this ratio.
The following table provides the Company’s outstanding debt balances, net of unamortized debt issuance costs and discounts, as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Senior Debt with Subsidiary Guarantee
$297 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”)
$— $280 $277 
$444 million, 5.250% Fixed Interest Rate Notes due February 2028 (“2028 Notes”)
444 444 443 
$482 million, 7.500% Fixed Interest Rate Notes due June 2029 (“2029 Notes”)
477 477 476 
$844 million, 6.625% Fixed Interest Rate Notes due October 2030 (“2030 Notes”)
840 839 839 
$802 million, 6.875% Fixed Interest Rate Notes due November 2035 (“2035 Notes”)
797 797 797 
$575 million, 6.750% Fixed Interest Rate Notes due July 2036 (“2036 Notes”)
571 571 571 
Total Senior Debt with Subsidiary Guarantee3,129 3,408 3,403 
Senior Debt
$284 million, 6.950% Fixed Interest Rate Debentures due March 2033 (“2033 Notes”)
284 284 283 
$201 million, 7.600% Fixed Interest Rate Notes due July 2037 (“2037 Notes”)
200 200 200 
Total Senior Debt484 484 483 
Total Debt3,613 3,892 3,886 
Current Debt— (280)— 
Total Long-term Debt, Net of Current Portion$3,613 $3,612 $3,886 
Cash paid for interest was $82 million and $77 million for the first quarters of 2026 and 2025, respectively.
297000000 0.06694 0 280000000 277000000 444000000 0.05250 444000000 444000000 443000000 482000000 0.07500 477000000 477000000 476000000 844000000 0.06625 840000000 839000000 839000000 802000000 0.06875 797000000 797000000 797000000 575000000 0.06750 571000000 571000000 571000000 3129000000 3408000000 3403000000 284000000 0.06950 284000000 284000000 283000000 201000000 0.07600 200000000 200000000 200000000 484000000 484000000 483000000 3613000000 3892000000 3886000000 0 280000000 0 3613000000 3612000000 3886000000 82000000 77000000 284000000 289000000 8000000 1 750000000 554000000 0 9000000 544000000 0.0030 0.0125 0.0125 0.0125 1.00 70000000 0.10 Fair Value Measurements
Cash and Cash Equivalents include cash on hand, deposits with financial institutions and highly liquid investments with original maturities of less than 90 days. The Company’s Cash and Cash Equivalents are considered Level 1 fair value measurements as they are valued using unadjusted quoted prices in active markets for identical assets.
The following table provides a summary of the principal value and estimated fair value of the Company’s outstanding debt as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Principal Value$3,632 $3,916 $3,916 
Fair Value, Estimated (a)3,628 3,964 3,957 
  _______________
(a)The estimated fair value of the Company’s debt is based on reported transaction prices, which are considered Level 2 inputs in accordance with Accounting Standards Codification 820, Fair Value Measurement. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
Management believes that the carrying values of the Company’s Accounts Receivable, Accounts Payable and Accrued Expenses approximate their fair values as of May 2, 2026 because of their short maturities.
The following table provides a summary of the principal value and estimated fair value of the Company’s outstanding debt as of May 2, 2026, January 31, 2026 and May 3, 2025:
May 2,
2026		January 31,
2026		May 3,
2025
(in millions)
Principal Value$3,632 $3,916 $3,916 
Fair Value, Estimated (a)3,628 3,964 3,957 
  _______________
(a)The estimated fair value of the Company’s debt is based on reported transaction prices, which are considered Level 2 inputs in accordance with Accounting Standards Codification 820, Fair Value Measurement. The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
3632000000 3916000000 3916000000 3628000000 3964000000 3957000000 Commitments and Contingencies
The Company is subject to various claims and contingencies related to lawsuits, taxes, insurance, regulatory and other matters arising in the ordinary course of business. Actions filed against the Company from time to time may include commercial, tort, intellectual property, tax, customer, employment, wage and hour, data privacy, securities, anti-corruption and other claims, including purported class action lawsuits. Management believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse effect on the Company’s results of operations, financial condition or cash flows.
IEEPA Tariff Refunds
In February 2026, the U.S. Supreme Court issued a decision invalidating tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). In March 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to liquidate all non-final entries without regard to IEEPA duties. Additionally, in April 2026, CBP launched Phase 1 of the new Consolidated Administration and Processing of Entries tool in the Automated Commercial Environment portal, creating a process for submitting IEEPA refund claims.
As of May 2, 2026, the Company had not recognized the effect of any potential refunds as the timing and amount of any potential refunds for previously collected tariffs was uncertain and may be subject to further legal and regulatory developments. The Company will continue to monitor changes to the import and export policies of the U.S. and other countries that could impact its financial position, results of operations and cash flows.
Lease Guarantees
In connection with the spin-off of Victoria’s Secret & Co., the Company had remaining contingent obligations of $210 million as of May 2, 2026 related to lease payments under the current terms of noncancelable leases, primarily related to office space, expiring at various dates through 2037. These obligations include minimum rent and additional payments covering taxes, common area costs and certain other expenses and relate to leases that commenced prior to the spin-off. The Company’s reserves related to these obligations were not significant for any period presented.
210000000 Segment Reporting
The Company is managed at the consolidated level and therefore operates and reports as a single segment. The Company’s Chief Executive Officer is its Chief Operating Decision Maker (“CODM”), and the measure of profitability included in the financial information regularly provided to the CODM is total Company Adjusted Operating Income, or Operating Income in periods where there are no adjustments. The Company’s CODM assesses Adjusted Operating Income performance in comparison to forecasts and historical results to make decisions on the reinvestment of profits into the business and capital allocation strategies.
The following table illustrates significant segment expenses that were regularly provided to the CODM for the first quarters of 2026 and 2025:
First Quarter
20262025
 (in millions)
Net Sales$1,378 $1,424 
Adjusted Cost of Goods Sold(521)(509)
Buying and Occupancy(269)(269)
Adjusted Selling Expenses (256)(256)
Adjusted Marketing Expenses (51)(49)
Adjusted General and Administrative Expenses(130)(132)
Adjusted Operating Income151 209 
Interchange Fee Settlements (a)88 — 
Business Transformation Activities (b)(8)— 
Reported Operating Income$231 $209 
 ________________
(a)In the first quarter of 2026, the Company received $88 million, net of legal fees, related to favorable settlements of payment card interchange fee litigation. The gain was recognized as a reduction to Selling Expenses and was excluded from the Adjusted Operating Income details provided to the CODM.
(b)In the first quarter of 2026, the Company recognized aggregate pre-tax costs of $8 million, resulting from business transformation activities in connection with the Consumer First Formula, of which $1 million, $2 million and $5 million, were excluded from the Cost of Goods Sold, Marketing Expenses and General and Administrative Expenses, respectively, in the Adjusted Operating Income details provided to the CODM.
As a single reportable segment entity, the other disclosures required by ASC 280, Segment Reporting, can be found in the Company’s Consolidated Financial Statements and the Notes thereto, including the Company’s measure of segment assets, which is total consolidated assets.
The following table illustrates significant segment expenses that were regularly provided to the CODM for the first quarters of 2026 and 2025:
First Quarter
20262025
 (in millions)
Net Sales$1,378 $1,424 
Adjusted Cost of Goods Sold(521)(509)
Buying and Occupancy(269)(269)
Adjusted Selling Expenses (256)(256)
Adjusted Marketing Expenses (51)(49)
Adjusted General and Administrative Expenses(130)(132)
Adjusted Operating Income151 209 
Interchange Fee Settlements (a)88 — 
Business Transformation Activities (b)(8)— 
Reported Operating Income$231 $209 
 ________________
(a)In the first quarter of 2026, the Company received $88 million, net of legal fees, related to favorable settlements of payment card interchange fee litigation. The gain was recognized as a reduction to Selling Expenses and was excluded from the Adjusted Operating Income details provided to the CODM.
(b)In the first quarter of 2026, the Company recognized aggregate pre-tax costs of $8 million, resulting from business transformation activities in connection with the Consumer First Formula, of which $1 million, $2 million and $5 million, were excluded from the Cost of Goods Sold, Marketing Expenses and General and Administrative Expenses, respectively, in the Adjusted Operating Income details provided to the CODM.
1378000000 1424000000 521000000 509000000 269000000 269000000 256000000 256000000 51000000 49000000 130000000 132000000 151000000 209000000 88000000 0 8000000 0 231000000 209000000 88000000 8000000 1000000 2000000 5000000 false false false false Results include fulfilled buy online pick up in store orders. Results include royalties associated with franchised stores, as well as international and domestic wholesale sales. These awards were excluded from the calculation of Net Income per Diluted Share because their inclusion would have been anti-dilutive. The estimated fair value of the Company’s debt is based on reported transaction prices, which are considered Level 2 inputs in accordance with Accounting Standards Codification 820, Fair Value Measurement . The estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange.