Bath & Body Works, Inc. (NYSE: BBWI), a prominent specialty retailer known for its home fragrance and body care products, is currently embroiled in a class action lawsuit filed by Robbins LLP. The lawsuit pertains to allegations that the company misled investors regarding its business strategy and financial performance over an extended period, specifically from June 4, 2024, to November 19, 2025.

2. Key Allegations Against Bath & Body Works

Robbins LLP has laid out several serious accusations against Bath & Body Works in its investor notice. The complaint alleges that the company failed to disclose critical information regarding its operational strategies, leading to a misrepresentation of its financial health and growth potential. The key points include:

Ineffectiveness of Business Strategy: The company's approach, described as pursuing "adjacencies, collaborations and promotions," did not yield the expected growth in customer base or net sales. This has raised questions about the overall viability of the company's strategies.

Reliance on Brand Collaborations: As the initial strategy faltered, the company allegedly relied heavily on brand collaborations to mask its underlying financial weaknesses, leading to a significant deviation from its growth targets.

Failure to Meet Financial Guidance: The lawsuit claims that the company was unlikely to achieve its own financial projections, which became evident when it released disappointing third-quarter results on November 20, 2025.

3. Disappointing Third Quarter Results

On the day the class action was announced, Bath & Body Works disclosed disappointing third-quarter results, revealing a year-over-year revenue decline of 1%, which fell short of its guidance for 1-3% growth. Additionally, net income dropped sharply by 26%, amounting to $77 million. In a significant move, the company also revised its full-year guidance for net sales downward and cut its expected earnings per diluted share from a range of $3.28 to $3.53 to a new estimate of "at least $2.83."

A Shift in Business Strategy

In response to the negative financial performance, Bath & Body Works introduced a new business strategy in its investor presentation. The company acknowledged that its previous focus on "adjacencies, collaborations, and promotions" had not been effective in expanding its customer base. The presentation highlighted a "diagnosis" of its underperformance, indicating that the strategy had diverted attention from investing in core categories. Furthermore, the company admitted to an overreliance on deep promotions to drive growth, which has proven unsustainable.

4. Market Reaction

Following the disappointing results and the announcement of the new strategy, Bath & Body Works' stock experienced a sharp decline. On November 20, 2025, the stock price plummeted by $5.22, or approximately 24.8%, closing at $15.82 per share. This drastic dip reflects investor concerns over the company's financial stability and future growth prospects.

5. Next Steps for Investors

Investors who purchased shares of Bath & Body Works during the specified period may be eligible to participate in the class action lawsuit. Those interested in serving as lead plaintiffs are encouraged to contact Robbins LLP. Lead plaintiffs represent the interests of other class members in the litigation process. Shareholders who choose not to participate can remain absent class members while still being eligible for any recovery resulting from the lawsuit.

6. Conclusion

The unfolding legal situation surrounding Bath & Body Works raises significant questions about the company's operational transparency and management practices. As the class action progresses, investors will be watching closely for further developments and their potential implications on the retailer's future. Investors are encouraged to stay informed and consider their options in light of the ongoing legal proceedings.

Original press release