Bath & Body Works (BBWI) risk factors, FY2026 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 cannot guarantee the successful implementation of our strategic transformationNew
4. 04We may be impacted by our ability to attract, develop and retain qualified associates and manage labor-related costs
5. 05Turnover in Company leadership or other key positions, and our ability to attract and retain new talent, may have an adverse impact on Company performance
6. 06Our net sales depend on a volume of traffic to our stores and the availability of suitable lease space
7. 07Our continued growth and success depend in part on new store openings and existing store remodels and expansions
8. 08Our international operations and our plans for international expansion include risks that could impact our results and reputation
9. 09Our results could be impacted by our relationships with our licensees, franchisees, wholesalers and other distribution-related partners, including by such partners taking actions that could harm our business or brand images99% rewritten
10. 10organization could strain management systems, internal controls and decision-making speed. Failing to scale our operational infrastructure, governance or technology in line with potential growth could impact execution and financial performanceNew
11. 11Our direct channel business includes risks that could have a material adverse effect on our results58% rewritten
12. 12Our ability to protect our reputation could have a material adverse effect on our brand image21% rewritten
13. 13If 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
14. 14Our 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
15. 15Our ability to compete favorably in our highly competitive segments of the consumer goods and retail industry could impact our results of operations, financial condition and cash flows
16. 16Our ability to manage the life cycles of our brand and to remain current with trends and launch our strategic transformation successfully could impact the image and relevance of our brand29% rewritten
17. 17We rely on innovation and high-quality products to compete in the market for our productsNew
18. 18We may be impacted by the ability to adequately source, distribute and sell merchandise and other materials on a global basis
19. 19Our ability, or perceived inability, to complete sustainability, community impact and human capital initiatives may have a material adverse effect on our reputation32% rewritten
20. 20We 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
21. 21A change in the relationship with our key vendors could have a material effect on our business
22. 22We 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
23. 23Fluctuations in foreign currency exchange rates could impact our results of operations, financial condition and cash flows
24. 24Our results may be affected by fluctuations in product input costs
25. 25Our results may be affected by fluctuations in energy costs
26. 26Our results may be impacted by our ability to adequately protect our assets from loss and theft
27. 27We self-insure certain risks and may be impacted by unfavorable claims experience39% rewritten
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. 34jurisdiction to jurisdiction, and it is possible that the laws and regulations will be interpreted and applied in ways that may have a material adverse effect on our results of operations, financial condition and cash flowsNew
2. 35Privacy 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 both28% rewritten
3. 36We may be impacted by our ability to comply with legal and regulatory requirements
4. 37We may be adversely impacted by certain compliance or legal matters
5. 38We may be impacted by changes in taxation, trade and other regulatory requirements