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Bath & Body Works: Thriving Amid Tariffs with Domestic Production

Bath & Body Works, a leading player in the personal care and candle industry, is distinctly positioned in an era of rising tariffs, thanks to its strategic manufacturing choices.

Producing approximately 80% of its offerings domestically, Bath & Body Works has been gradually transferring its production back to the United States over the past decade. This shift has given the company a competitive edge against rivals that rely more heavily on imported goods.

“The high level of domestic manufacturing provides Bath & Body Works with a significant advantage compared to its competitors, as they can avoid import tariffs on most of their products,” explained Lorraine Hutchinson, senior retail analyst at BofA Securities. “This allows them to maintain pricing stability and protect their profit margins.”

The company’s main manufacturing hub, Beauty Park, opened in New Albany, Ohio in 2012. This facility is crucial for the company’s fast response to market demands. Simeon Siegel, managing director at BMO Capital Markets, noted, “The decision to centralize production was aimed at enhancing their ability to quickly adapt to consumer preferences. By accurately identifying what customers want, they can reduce the need for heavy discounts. The current tariff discussions have further positioned them as unexpected beneficiaries.”

A recent change in logistics demonstrates the impact of these manufacturing shifts. Previously, Bath & Body Works’ foaming hand soap required about three months to navigate from production to distribution. The components were sourced from Canada and China, leading to a lengthy process. However, with the operations now centralized at Beauty Park, this timeline has been cut down to just three weeks.

Despite a decline in net sales since hitting nearly $7.9 billion in 2021—when demand for products surged due to the pandemic—Bath & Body Works anticipates a positive shift in its financial trajectory. 2025 projections indicate a return to growth for the company.

“There’s a perception that Bath & Body Works is merely responding to trends with fluctuating revenue,” Siegel commented. “However, it’s essential to recognize that their revenue dip stemmed from an oversupply of candles purchased during the pandemic. As the market stabilizes, we could see a more consistent performance moving forward.”

For deeper insights into the company’s future, watch the accompanying video that outlines analysts’ forecasts for Bath & Body Works.

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