Bath & Body Works (BBWI) risk factors, FY2025 10-K

Risks related to our business

1. 01Our net sales, results of operations and cash flows are sensitive to, have been affected by and may in the future be further impacted by, general economic conditions, inflation, tariffs, consumer confidence, consumer spending patterns, significant health hazards or pandemics, severe weather or other market disruptions
2. 02Our net sales, operating income, cash and inventory levels fluctuate on a seasonal basis
3. 03We may be impacted by our ability to attract, develop and retain qualified associates and manage labor-related costs
4. 04Turnover in Company leadership or other key positions, and our ability to attract and retain new talent, may have an adverse impact on Company performance
5. 05Our net sales depend on a volume of traffic to our stores and the availability of suitable lease space
6. 06Our continued growth and success depend in part on new store openings and existing store remodels and expansions
7. 07Our international operations and our plans for international expansion include risks that could impact our results and reputation
8. 08Our licensees, franchisees, wholesalers and other distribution-related partners could take actions that could harm our business or brand images
9. 09Our direct channel business includes risks that could have a material adverse effect on our results
10. 10technology and vendor system failures, deepfakes and other malicious uses of artificial intelligence, disruption of critical services caused by threat actors and similar disruptions
11. 11Our ability to protect our reputation could have a material adverse effect on our brand image
12. 12If our marketing, advertising, promotional programs or loyalty program are unsuccessful, or if our competitors are more effective with their programs than we are, our results of operations, financial condition and cash flows may be adversely affected
13. 13Our ability to adequately maintain, enforce and protect our trade names, trademarks and patents could have an impact on our brand image and ability to penetrate new markets
14. 14Our ability to compete favorably in our highly competitive segments of the retail industry could impact our results of operations, financial condition and cash flows
15. 15Our ability to manage the life cycles of our brand and to remain current with trends and launch and expand new product lines successfully could impact the image and relevance of our brand
16. 16We may be impacted by our ability to adequately source, distribute and sell merchandise and other materials on a global basis
17. 17Our ability, or perceived inability, to complete environmental, social and governance (“ESG”) initiatives may have a material adverse effect on our reputation
18. 18We rely on a number of manufacturing and distribution facilities located in the same vicinity, making our business susceptible to local and regional disruptions or adverse conditions
19. 19A change in the relationship with our key vendors could have a material effect on our business
20. 20We may be impacted by our vendors’ ability to manufacture and deliver products in a timely manner, meet quality standards and comply with applicable laws and regulations
21. 21The spin-off of Victoria’s Secret could result in substantial tax liability to us and our stockholders
22. 22Fluctuations in foreign currency exchange rates could impact our results of operations, financial condition and cash flows
23. 23Our results may be affected by fluctuations in product input costs
24. 24Our results may be affected by fluctuations in energy costs
25. 25Our results may be impacted by our ability to adequately protect our assets from loss and theft
26. 26We self-insure certain risks and may be impacted by unfavorable claims experience
27. 27heightened as we execute on the IT Transformation Project, could have a material adverse effect on our results of operations, financial condition and cash flows
28. 28Any significant compromise or breach of our data security, including the security of customer, associate, third-party or Company information, could have a material adverse effect on our reputation, results of operations, financial condition and cash flows

Risks related to our common stock

1. 29Our stock price may be volatile
2. 30If we are unable to pay quarterly dividends or repurchase our shares at intended levels, our reputation and stock price may be impacted
3. 31Shareholder activism could cause us to incur significant expense, impact the execution of our business strategy and have an adverse effect on our business

Risks related to our indebtedness

1. 32Our ability to maintain our credit ratings could affect our ability to access capital and could increase our interest expense
2. 33We may be unable to service or refinance our debt or maintain compliance with restrictive covenants in our debt instruments, including our asset-backed revolving credit facility

Risks related to laws and regulations

1. 34These laws and regulations range from the “sectoral” variety (i.e., laws that govern specific practices, services or technologies) to omnibus laws (i.e., laws that comprehensively seek to govern all aspects of data processing practices). As an omnichannel retailer, we are subject to both
2. 35We may be impacted by our ability to comply with legal and regulatory requirements
3. 36We may be adversely impacted by certain compliance or legal matters
4. 37We may be impacted by changes in taxation, trade and other regulatory requirements