Bath & Body Works Faces Fraud Suit

The lawsuit alleges that Bath & Body Works misled investors by touting its strategy of pursuing "adjacencies, collaborations and promotions" as a significant driver of customer and sales growth. In reality, this strategy was allegedly failing to expand the customer base and deliver the promised growth. Specifically, the company's expansion into adjacent product categories like men's grooming, lip care, hair care, and laundry products did not perform as well as publicly stated, according to the suit. The lawsuit claims that as this strategy faltered, the company used brand collaborations to "carry quarters" and mask weak underlying financial results. The issues came to light on August 28, 2025, when the company reported a 55.8% year-over-year decline in earnings per diluted share for the second quarter and cut its full-year guidance. This news was followed by a 6.9% drop in the stock price. A more significant drop occurred on November 20, 2025, after the company released its third-quarter results. On that day, Bath & Body Works' stock price plummeted by 24.8%, falling from $21.04 to $15.82 per share on the news of declining revenue and a further cut to its net sales guidance. It was then that the company disclosed that its focus on "adjacencies" had not grown the total customer base and had "reduced focus on investing in our core categories." The company announced it would be exiting some of these adjacent categories to refocus on its main product lines. The class action lawsuit, filed in the U.S. District Court for the Southern District of Ohio, consolidates claims from multiple law firms on behalf of investors who purchased securities between June 4, 2024, and November 19, 2025. The deadline for an investor to file a motion to be appointed as lead plaintiff is March 16, 2026.