Bath & Body Works Faces Securities Class Action

- The lawsuit alleges that Bath & Body Works misled investors by claiming its strategy of expanding into adjacent product categories like men's grooming, hair care, lip products, and laundry was growing its customer base and net sales. - In reality, this strategy was allegedly failing, and the company relied on brand collaborations to conceal weak underlying financial performance. - A significant stock drop of 24.8% occurred on November 20, 2025, after the company announced it was cutting its full-year net sales guidance from positive growth to a "high single digits" decline and would exit some of the new product categories. - This followed a 6.9% stock drop on August 28, 2025, when the company reported a 55.8% year-over-year decline in Q2 earnings per diluted share and lowered its full-year guidance. - The class action lawsuit was filed in the U.S. District Court for the Southern District of Ohio and names Bath & Body Works and certain senior officers as defendants. - Prior to the negative announcements, the company had stated that its strategy was "working" and driving top-line growth through these new product categories. - In its third-quarter 2025 results, the company reported a 1% year-over-year revenue decline, missing its own guidance of 1-3% growth, and a 26% drop in net income to $77 million. - The lawsuit covers all investors who purchased the company's securities between June 4, 2024, and November 19, 2025.