Bath & Body Works, Inc.
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ITEM 1. BUSINESS.
General
Bath & Body Works is a global leader in personal care and home fragrance, driven by the belief that everybody deserves to feel good.
For over 35 years, the brand’s beloved and iconic scents have been expertly crafted for exceptional performance and a luxury fragrance experience. Formulated with thoughtfully chosen ingredients, Bath & Body Works’ body care products are available in multiple forms including fine fragrance mist, body cream, lotion, eau de parfum, body wash, hand soap, sanitizer and more, and home to our famous 3-wick candles. Consumers can shop Bath & Body Works anytime and anywhere they choose, from welcoming, in-store experiences at 1,927 company-operated stores in the United States of America (“U.S”) and Canada, our e-commerce sites in the U.S. and Canada, 573 international stores and 34 e-commerce sites in more than 45 other countries, as well as Amazon.
Throughout this Annual Report on Form 10-K, we refer to Bath & Body Works, Inc. as “we” and the “Company.”
Fiscal Year
We utilize the retail calendar for reporting and our fiscal year ends on the Saturday nearest to January 31. As a result, “2025” refers to the 52-week period ended January 31, 2026, “2024” refers to the 52-week period ended February 1, 2025 and “2023” refers to the 53-week period ended February 3, 2024.
Strategy
Our strategy is rooted in the Consumer First Formula, launched in the third quarter of 2025, which puts the consumer at the center of everything we do. The Consumer First Formula is a multi-year, comprehensive transformation plan to revitalize Bath & Body Works across brand, product and marketplace. We are focused on our four largest revenue driving opportunities to try to attract new, younger consumers to the brand, which we expect will help us unlock our next era of sustainable growth:
•Creating Disruptive and Innovative Products: We intend to reestablish best in class product leadership in our hero categories.
•Reigniting the Brand: We expect to invest in marketing to build a brand with cultural currency, showing up in culture through creators, in store visuals and bigger storytelling, creating meaningful emotional connections with consumers.
•Winning in the Marketplace: We plan to expand access and ease of discovery through an enhanced digital experience, third-party channels and refreshed in-store merchandising to acquire new and lapsed consumers.
•Operating with Speed and Efficiency: We are working to transform Bath & Body Works to be a faster and more efficient organization by empowering teams, working with focus and agility to prioritize what customers care about most.
As we move forward under the Consumer First Formula, we believe the following competitive advantages endure and will help enable our return to sustainable growth:
•We are a market leader in attractive, growing categories;
•We are an iconic brand with global recognition;
•We have a global store footprint with 2,500 locations employing a community of exceptional store associates;
•We have a customer loyalty program with 40 million active members; and
•We benefit from a fast, predominantly domestic, vertically-integrated supply chain.
We are investing in new capabilities and talent, focusing our teams on the highest-value work and moving at the speed of the consumer, while optimizing expenses to fuel innovation and long-term performance. Since Daniel Heaf joined as our new Chief Executive Officer, he has put leaders in roles for accountability to drive the priorities of the Consumer First Formula, with responsibilities across our marketplace channels, product merchandizing and human resources.
Company-operated Stores
We are a predominantly off-mall retailer with 60% of our North American store fleet located in off-mall locations as of January 31, 2026. We are continuing our off-mall expansion to limit our exposure to vulnerable mall locations, with a target mix of 75% off-mall over time given continued consumer preference. We proactively manage our stores and adjust our investment levels based on individual store and fleet performance.
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The following table provides the number of our Company-operated retail stores as of January 31, 2026 and February 1, 2025:
| January 31, 2026 | February 1, 2025 | |||||||||
| United States | 1,814 | 1,782 | ||||||||
| Canada | 113 | 113 | ||||||||
| Total | 1,927 | 1,895 | ||||||||
The following table provides the changes in the number of our Company-operated retail stores for the past three fiscal years:
| Beginning of Year | Opened | Closed | End of Year | |||||||||||||||||||||
| 2025 | 1,895 | 94 | (62) | 1,927 | ||||||||||||||||||||
| 2024 | 1,850 | 106 | (61) | 1,895 | ||||||||||||||||||||
| 2023 | 1,802 | 95 | (47) | 1,850 | ||||||||||||||||||||
During 2025, we opened 94 new North American stores, nearly all in off-mall locations, and permanently closed 62 stores, predominantly in malls, which, when combined with store remodel activity, resulted in net square footage growth of 2%. In 2026, we expect North American square footage growth of approximately 1%.
Franchise, License and Wholesale Arrangements
In addition to our Company-operated stores, our products are sold at partner-operated locations and e-commerce sites in more than 45 countries through franchise, license and wholesale arrangements. Our international partner-based, asset-light business model allows us to establish operating standards by owning assortment, pricing architecture, promotions, store designs and real estate approval while our partners make investments and contribute as experts in local real estate, people and practices.
The following table provides the number of international stores operated by our partners as of January 31, 2026 and February 1, 2025:
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| January 31, 2026 | February 1, 2025 | |||||||||
| International | 536 | 494 | ||||||||
| International - Travel Retail | 37 | 35 | ||||||||
| Total (a) | 573 | 529 | ||||||||
(a)Includes store locations only and does not include kiosks, shop-in-shops, gondola or beauty counter locations.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion and analysis of financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as codified in the Accounting Standards Codification (“ASC”). The following information should be read in conjunction with our financial statements and the related notes included in Item 8. Financial Statements and Supplementary Data.
Our operating results are generally impacted by economic changes and, therefore, we monitor the retail environment using, among other things, certain key industry performance indicators including competitor performance and traffic data. These indicators can provide insight into consumer spending patterns and shopping behavior in the current retail environment and assist us in assessing our performance as well as the potential impact of industry trends on our future operating results. Additionally, we evaluate a number of key performance indicators including net sales, gross profit, operating income and other performance metrics, such as sales per average selling square foot and sales per average store, in assessing our performance.
A discussion regarding our financial condition and results of operations for 2025 compared to 2024 is presented below. A discussion regarding our financial condition and results of operations for 2024 compared to 2023 can be found under Item 7. of our Annual Report on Form 10-K for the year ended February 1, 2025, filed with the SEC on March 14, 2025.
Executive Overview
Our 2025 performance did not meet our expectations. While we believe macroeconomic pressures impacted consumer sentiment throughout the year, we also underperformed in our sector. Accordingly, we took actions to help return the Company to sustainable growth. During the second quarter, we welcomed our new Chief Executive Officer, Daniel Heaf, to the business and, in the third quarter, launched the Consumer First Formula, our multi-year, comprehensive transformation plan to revitalize Bath & Body Works across brand, product and marketplace. The Consumer First Formula invests behind our four largest revenue driving opportunities to try to attract new, younger consumers to the brand, which we expect will help us unlock our next era of sustainable growth:
•Creating Disruptive and Innovative Products: We intend to reestablish best in class product leadership in our hero categories.
•Reigniting the Brand: We expect to invest in marketing to build a brand with cultural currency, showing up in culture through creators, in store visuals and bigger storytelling, creating meaningful emotional connections with consumers.
•Winning in the Marketplace: We plan to expand access and ease of discovery through an enhanced digital experience, third party channels and refreshed in-store merchandising to acquire new and lapsed consumers.
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•Operating with Speed and Efficiency: We are working to transform Bath & Body Works to be a faster and more efficient organization by empowering teams, working with focus and agility to prioritize what customers care about most. We have plans to deliver $250 million in cost savings over the next two years, with $175 million expected in fiscal 2026. We expect that these savings will be used to invest in revenue-generating initiatives across product and brand.
Fiscal 2025 Overview
For 2025, total Net Sales were $7,291 million, which decreased $16 million, or 0.2%, compared to 2024. Total North American Net Sales decreased $31 million compared to 2024, due to a decline in transactions mostly offset by increased order size, and International Net Sales increased $15 million. For 2025, Operating Income was $1,126 million, which decreased $140 million, or 11%, compared to 2024, and our Operating Income rate (expressed as a percentage of Net Sales) decreased to 15.4% from 17.3%. The Operating Income results were impacted by an increase in General, Administrative and Store Operating Expenses and a decline in our Gross Profit rate.
For additional information related to our 2025 financial performance, see “Results of Operations – 2025 Compared to 2024.”
Fiscal 2026 Outlook
We expect 2026 to be a year of disciplined investment behind the Consumer First Formula, balancing rigorous cost control with targeted reinvestment intended to position the business for sustainable long-term growth. We are confident in our strategy and our ability to reposition the Company as a premier, global brand. While we anticipate a macroeconomic environment similar to 2025, with continued value-oriented consumer behavior, we are focused on translating our strategy into action as we realign the business to evolving consumer expectations.
Adjusted Financial Information
In addition to our results provided in accordance with GAAP above and throughout this Annual Report on Form 10-K, provided below are non-GAAP measures that present Operating Income, Net Income and Net Income per Diluted Share in 2025 and 2024 on an adjusted basis, which removes certain items. We believe that these items are not indicative of our ongoing operations due to their size and nature. We use adjusted financial information as key performance measures for the purpose of evaluating performance internally. These non-GAAP measures are not intended to replace the presentation of our financial results in accordance with GAAP. Instead, we believe that the presentation of adjusted financial information provides additional information to investors to facilitate the comparison of past and present operations. Further, our definitions of adjusted financial information may differ from similarly titled measures used by other companies.
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The table below reconciles our GAAP financial measures to our non-GAAP financial measures:
| (in millions, except per share amounts) | 2025 | 2024 | |||||||||
| Reconciliation of Reported Operating Income to Adjusted Operating Income | |||||||||||
| Reported Operating Income | $ | 1,126 | $ | 1,266 | |||||||
| Business Transformation Activities (a) | 15 | — | |||||||||
| Leadership Transition Costs (b) | 15 | — | |||||||||
| Adjusted Operating Income | $ | 1,156 | $ | 1,266 | |||||||
| Reconciliation of Reported Net Income to Adjusted Net Income | |||||||||||
| Reported Net Income | $ | 649 | $ | 798 | |||||||
| Business Transformation Activities (a) | 15 | — | |||||||||
| Leadership Transition Costs (b) | 15 | — | |||||||||
| Gain on Sale of Non-core Asset (c) | (8) | — | |||||||||
| Gain on Sales of Easton Investments (d) | — | (39) | |||||||||
| Tax Effect of Adjustments | (2) | 14 | |||||||||
| Tax Benefit from Valuation Allowance Release (e) | — | (44) | |||||||||
| Adjusted Net Income | $ | 669 | $ | 729 | |||||||
| Reconciliation of Reported Net Income per Diluted Share to Adjusted Net Income per Diluted Share | |||||||||||
| Reported Net Income Per Diluted Share | $ | 3.11 | $ | 3.61 | |||||||
| Business Transformation Activities (a) | 0.07 | — | |||||||||
| Leadership Transition Costs (b) | 0.07 | — | |||||||||
| Gain on Sale of Non-core Asset (c) | (0.04) | — | |||||||||
| Gain on Sales of Easton Investments (d) | — | (0.18) | |||||||||
| Tax Effect of Adjustments | (0.01) | 0.06 | |||||||||
| Tax Benefit from Valuation Allowance Release (e) | — | (0.20) | |||||||||
| Adjusted Net Income Per Diluted Share | $ | 3.21 | $ | 3.29 | |||||||
(a)In 2025, we recognized aggregate pre-tax costs of $15 million (after-tax costs of $12 million), primarily included in General, Administrative and Store Operating Expenses, resulting from business transformation activities in connection with the Consumer First Formula. These costs are primarily related to severance benefits.
(b)In 2025, we recognized aggregate pre-tax costs of $15 million (after-tax costs of $14 million), included in General, Administrative and Store Operating Expenses, due to the transition of certain members of the leadership team, primarily related to severance benefits.
(c)In 2025, we recognized a pre-tax gain of $8 million (after-tax gain of $6 million), included in Other Income, Net, related to the sale of a non-core asset.
(d)In 2024, we sold our investments in Easton Town Center and Easton Gateway, resulting in an aggregate pre-tax gain of $39 million (after-tax gain of $25 million), included in Other Income, Net. For additional information, see Note 1 to the Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data.
(e)In 2024, we recognized a $44 million tax benefit related to the release of a valuation allowance on a deferred tax asset.
Company-operated Store Data
The following table compares Company-operated store data for 2025 and 2024:
| 2025 | 2024 | % Change | |||||||||||||||||||||
| Sales per Average Selling Square Foot (a) | $ | 1,026 | $ | 1,042 | (2 | %) | |||||||||||||||||
| Sales per Average Store (in thousands) (a) | $ | 2,921 | $ | 2,955 | (1 | %) | |||||||||||||||||
| Average Store Size (selling square feet) | 2,851 | 2,845 | — | % | |||||||||||||||||||
| Total Selling Square Feet (in thousands) | 5,493 | 5,391 | 2 | % | |||||||||||||||||||
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(a)Sales per average selling square foot and sales per average store, which are indicators of store productivity, are calculated based on store sales for the period divided by the average, including the beginning and end of period, of total selling square footage and store count, respectively.
The following table represents Company-operated store data for 2025:
| Stores | Stores | |||||||||||||||||||
| February 1, 2025 | Opened | Closed | January 31, 2026 | |||||||||||||||||
| United States | 1,782 | 94 | (62) | 1,814 | ||||||||||||||||
| Canada | 113 | — | — | 113 | ||||||||||||||||
| Total | 1,895 | 94 | (62) | 1,927 | ||||||||||||||||
Partner-operated Store Data
The following table represents partner-operated store data for 2025:
| Stores | Stores | |||||||||||||||||||
| February 1, 2025 | Opened | Closed | January 31, 2026 | |||||||||||||||||
| International | 494 | 70 | (28) | 536 | ||||||||||||||||
| International - Travel Retail | 35 | 4 | (2) | 37 | ||||||||||||||||
| Total International (a) | 529 | 74 | (30) | 573 | ||||||||||||||||
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(a)Includes store locations only and does not include kiosks, shop-in-shops, gondola or beauty counter locations.
Results of Operations—2025 Compared to 2024
Net Sales
The following table provides Net Sales for 2025 in comparison to 2024:
| 2025 | 2024 | % Change | ||||||||||||||
| (in millions) | ||||||||||||||||
| Stores - U.S. and Canada (a) | $ | 5,582 | $ | 5,534 | 0.9 | % | ||||||||||
| Direct - U.S. and Canada | 1,395 | 1,474 | (5.4 | %) | ||||||||||||
| International (b) | 314 | 299 | 4.9 | % | ||||||||||||
| Total Net Sales | $ | 7,291 | $ | 7,307 | (0.2 | %) | ||||||||||
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(a)Results include fulfilled buy online, pickup in store (“BOPIS”) orders.
(b)Results include royalties associated with franchised stores and wholesale sales.
Total Net Sales were $7,291 million and decreased $16 million, or 0.2%, compared to 2024. Direct Net Sales decreased $79 million, or 5.4%, due to a decline in fulfilled orders, which was primarily due to our customers continuing to select our BOPIS option (which is recognized as store Net Sales), partially offset by an increased average order size. Stores Net Sales increased $48 million, or 0.9%, primarily driven by an increase in transactions due to higher BOPIS fulfilled orders and new store growth. International Net Sales increased $15 million, or 4.9%, compared to 2024.
Gross Profit
Our Gross Profit was $3,189 million, which decreased $45 million compared to 2024, and our Gross Profit rate (expressed as a percentage of Net Sales) was 43.7%, which decreased from 44.3% in 2024. Gross Profit dollars decreased due to the decline in the merchandise margin rate, primarily driven by tariffs, partially offset by lower Buying and Occupancy Expenses, which benefited from exiting a third-party fulfillment center in the first quarter of 2025.
The Gross Profit rate decreased due to the lower merchandise margin rate, primarily driven by tariffs, partially offset by the decline in Buying and Occupancy Expenses.
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General, Administrative and Store Operating Expenses
The following table provides details for our General, Administrative and Store Operating Expenses for 2025 compared to 2024:
2025 | 2024 | Change | |||||||||||||||||||||||||||||||
| (in millions) | % of Net Sales | (in millions) | % of Net Sales | (in millions) | % of Net Sales | ||||||||||||||||||||||||||||
| Selling Expenses | $ | 1,238 | 17.0 | % | $ | 1,191 | 16.3 | % | $ | 47 | 0.7 | % | |||||||||||||||||||||
| Marketing Expenses | 255 | 3.5 | % | 242 | 3.3 | % | 13 | 0.2 | % | ||||||||||||||||||||||||
| General and Administrative Expenses | 570 | 7.8 | % | 535 | 7.3 | % | 35 | 0.5 | % | ||||||||||||||||||||||||
| Total | $ | 2,063 | 28.3 | % | $ | 1,968 | 26.9 | % | $ | 95 | 1.4 | % | |||||||||||||||||||||
Our total General, Administrative and Store Operating Expenses were $2,063 million, which increased $95 million compared to 2024, and the rate (expressed as a percentage of Net Sales) was 28.3%, which increased from 26.9% in 2024. Selling Expenses increased primarily due to higher payroll related costs, mainly driven by investments in wages and new stores, and higher healthcare costs. General and Administrative Expenses increased primarily due to $15 million of costs related to the transition of certain members of the leadership team and $14 million of business transformation activities.
The General, Administrative and Store Operating Expense rate increased primarily due to higher healthcare costs, leadership transition costs, business transformation activities and the increase in payroll related costs, as well as incremental investments in marketing.
Other Income and Expenses
Interest Expense
The following table provides the average daily borrowings and average borrowing rates for 2025 and 2024:
| 2025 | 2024 | |||||||||
| Average daily borrowings (in millions) | $ | 3,916 | $ | 4,273 | ||||||
| Average borrowing rate | 7.1 | % | 7.3 | % | ||||||
Our Interest Expense was $276 million, which decreased $36 million compared to 2024. The decrease was due to lower average daily borrowings and borrowing rate, which were driven by the early extinguishment of outstanding notes in 2024.
Other Income, Net
Our Other Income, Net was $32 million compared to $74 million for 2024. Included in 2025 is an $8 million pre-tax gain on the sale of a non-core asset. Included in 2024 is an aggregate $39 million pre-tax gain on sales of certain Easton investments and the recognition of a $10 million pre-tax loss on extinguishment of outstanding notes. The remaining decrease is primarily due to lower interest income on invested cash in 2025.
Provision for Income Taxes
Our effective tax rate was 26.4% compared to 22.4% in 2024. The 2025 rate was higher than our combined estimated federal and state statutory rate primarily due to accrued interest expense related to unrecognized tax benefits. The 2024 rate was lower than our combined estimated federal and state statutory rate primarily due to the sales of Easton investments, which resulted in the release of a valuation allowance on a deferred tax asset.
FINANCIAL CONDITION
A discussion regarding our financial condition for 2024 compared to 2023 can be found under Item 7. of our Annual Report on Form 10-K for the year ended February 1, 2025, filed with the SEC on March 14, 2025.
Liquidity and Capital Resources
Liquidity, or access to cash, is an important factor in determining our financial stability. We are committed to maintaining adequate liquidity. Cash generated from our operating activities provides the primary resources to support current operations, growth initiatives, seasonal funding requirements, future common stock and debt repurchases, and capital expenditures. Our cash provided from operations is impacted by our net income and working capital changes. Our net income is impacted by, among other things, sales volume, seasonal sales patterns, success of new product introductions and product and market expansions, profit margins, income taxes and inflationary pressures. Our sales are typically highest during the fourth quarter of the fiscal year due to seasonal and holiday-related sales patterns. Generally, our need for working capital peaks during the summer and fall months as inventory builds in anticipation of the holiday period. Our cash and cash equivalents held by foreign subsidiaries were $210 million as of January 31, 2026.
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During 2025, we did not repurchase any of our outstanding senior notes. However, subsequent to January 31, 2026, we issued a notice of redemption for any and all outstanding of our 6.694% Senior Notes due January 2027. We expect the aggregate redemption price to be approximately $289 million, to be paid in the first quarter of fiscal 2026.
We repurchased 15.1 million shares of our common stock for $400 million. We may, from time to time, repurchase, or otherwise retire, additional debt or shares of our common stock, as applicable.
We believe that our current cash position, our cash flows generated from operations and our borrowing capacity under our ABL Facility will be sufficient to meet our liquidity needs, including capital expenditure requirements, for at least the next twelve months.
Debt Leverage Ratio
Our debt leverage ratio is defined as adjusted debt, which includes our short-term and long-term debt as well as total operating lease liabilities, divided by earnings before interest, taxes, depreciation, amortization and rent (“EBITDAR”). EBITDAR is calculated as Total Company Adjusted Operating Income, or Operating Income in periods where there are no adjustments, which excludes interest and taxes, before depreciation, amortization and lease costs. Our debt leverage ratio is a non-GAAP financial measure which we believe is useful to analyze our capital structure. Our debt leverage ratio calculation may not be comparable to similarly-titled measures reported by other companies. Our debt leverage ratio should be evaluated in addition to, and not considered a substitute for, other GAAP financial measures.
The following table provides our debt leverage ratio as of, and for the years ended, January 31, 2026 and February 1, 2025:
| January 31, 2026 | February 1, 2025 | ||||||||||
| (dollars in millions) | |||||||||||
| Total Debt | $ | 3,892 | $ | 3,884 | |||||||
| Total Operating Lease Liabilities | 1,062 | 1,075 | |||||||||
| Adjusted Debt | $ | 4,954 | $ | 4,959 | |||||||
| Adjusted Operating Income | $ | 1,156 | $ | 1,266 | |||||||
| Depreciation and Amortization | 254 | 282 | |||||||||
| Total Lease Costs | 437 | 418 | |||||||||
| EBITDAR | $ | 1,847 | $ | 1,966 | |||||||
| Debt Leverage Ratio | 2.7 | 2.5 | |||||||||
Free Cash Flow
Our free cash flow is defined as net cash provided by operating activities less capital expenditures. Free cash flow is a non-GAAP financial measure which we believe is useful to analyze our ability to generate cash. Our free cash flow calculation may not be comparable to similarly-titled measures reported by other companies. Our free cash flow calculation should be evaluated in addition to, and not considered a substitute for, other GAAP financial measures.
The following table provides our free cash flows for 2025 and 2024:
| 2025 | 2024 | ||||||||||||||
| (in millions) | |||||||||||||||
| Net Cash Provided by Operating Activities (a) | $ | 1,102 | $ | 886 | |||||||||||
| Capital Expenditures | (237) | (226) | |||||||||||||
| Free Cash Flow | $ | 865 | $ | 660 | |||||||||||
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(a)Fiscal 2024 includes tax payments of $65 million related to the sales of our investments in Easton Town Center and Easton Gateway.
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Cash Flows
The following table provides a summary of our Consolidated Statements of Cash Flows for 2025 and 2024:
| 2025 | 2024 | ||||||||||||||
| (in millions) | |||||||||||||||
| Cash and Cash Equivalents, Beginning of Year | $ | 674 | $ | 1,084 | |||||||||||
| Net Cash Flows Provided by Operating Activities | 1,102 | 886 | |||||||||||||
| Net Cash Flows Used for Investing Activities | (227) | (162) | |||||||||||||
| Net Cash Flows Used for Financing Activities | (599) | (1,132) | |||||||||||||
| Effects of Exchange Rate Changes on Cash and Cash Equivalents | 3 | (2) | |||||||||||||
| Net Increase (Decrease) in Cash and Cash Equivalents | 279 | (410) | |||||||||||||
| Cash and Cash Equivalents, End of Year | $ | 953 | $ | 674 | |||||||||||
Operating Activities
Net cash provided by operating activities in 2025 was $1,102 million, including net income of $649 million. Net income included depreciation of $254 million, deferred income tax expense of $63 million and share-based compensation expense of $31 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the cash flow benefit in Accounts Payable, Accrued Expenses and Other of $111 million due to our efforts to improve working capital and the $57 million cash flow detriment associated with Income Taxes Payable.
Net cash provided by operating activities in 2024 was $866 million, including net income of $798 million. Net income included depreciation of $282 million, a deferred income tax benefit of $112 million, share-based compensation expense of $40 million and an aggregate pre-tax gain on sales of certain Easton investments of $39 million. Other changes in assets and liabilities represent items that had a current period cash flow impact, such as changes in working capital. The most significant items in working capital were the $50 million decrease associated with Accounts Payable, Accrued Expenses and Other, the $26 million decrease associated with Inventory and the $23 million decrease associated with Income Taxes Payable.
Investing Activities
Net cash used for investing activities in 2025 was $227 million, primarily related to capital expenditures of $237 million, partially offset by aggregate cash proceeds of $9 million related to the sale of a Non-core asset. The capital expenditures included approximately $140 million related to new off-mall stores and remodels of existing stores, approximately $45 million for various IT projects, primarily to support the growth and profitability of our business, and approximately $25 million related to distribution and logistics capabilities.
Net cash used for investing activities in 2024 was $162 million, primarily related to capital expenditures of $226 million, partially offset by aggregate cash proceeds, net of fees, of $40 million related to the sales of certain Easton investments. The capital expenditures included approximately $140 million related to new off-mall stores and remodels of existing stores, approximately $45 million for various IT projects, primarily to support the growth and profitability of our business, and approximately $25 million related to distribution and logistics capabilities.
In 2026, we expect to invest approximately $270 million in capital expenditures, focused on high return real estate, Consumer First Formula investments, largely related to product assortment, and logistics and fulfillment upgrades.
Financing Activities
Net cash used for financing activities in 2025 was $599 million, primarily consisting of $401 million for share repurchases, dividend payments of $0.80 per share, or $167 million and payments on finance leases of $14 million.
Net cash used for financing activities in 2024 was $1,132 million, primarily consisting of $522 million for debt repurchases, $401 million for share repurchases, dividend payments of $0.80 per share, or $177 million, $17 million for payments on finance leases and tax payments of $16 million related to share-based awards.
Common Stock and Debt Repurchases
Our Board will determine share and debt repurchase authorizations, giving consideration to our levels of profit and cash flow, capital requirements, current and forecasted liquidity, the restrictions placed upon us by our borrowing arrangements as well as financial and other conditions existing at the time. We use cash flow generated from operating and financing activities to fund our share and debt repurchase programs. The timing and amount of any repurchases will be made at our discretion, taking into account a number of factors, including market conditions.
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Common Stock Repurchases
Under the authority of our Board, we repurchased shares of our common stock under the following repurchase programs during 2025 and 2024:
| Repurchase Program | Amount Authorized | Shares Repurchased | Amount Repurchased | Average Stock Price | ||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||||||||||||
| (in millions) | (in thousands) | (in millions) | ||||||||||||||||||||||||||||||||||||||
| February 2022 | $ | 1,500 | NA | 842 | NA | $ | 39 | NA | $ | 46.08 | ||||||||||||||||||||||||||||||
| January 2024 | 500 | 460 | 9,583 | $ | 17 | 361 | $ | 37.67 | 37.70 | |||||||||||||||||||||||||||||||
| January 2025 | 500 | 14,612 | NA | 383 | NA | 26.19 | NA | |||||||||||||||||||||||||||||||||
| Total | 15,072 | 10,425 | $ | 400 | $ | 400 | ||||||||||||||||||||||||||||||||||
There were share repurchases of $1 million reflected in Accounts Payable on the Consolidated Balance Sheet as of February 1, 2025. On February 27, 2025, we cancelled the remaining $121 million authorization available under the January 2024 Program and began repurchasing shares under the January 2025 Program.
The January 2025 Program had $117 million and $500 million of remaining authority as of January 31, 2026 and February 1, 2025, respectively. There were no share repurchases reflected in Accounts Payable on the Consolidated Balance Sheet as of January 31, 2026.
Dividend Policy and Procedures
Our Board will determine future dividends after giving consideration to our levels of profit and cash flow, capital requirements, current and forecasted liquidity, the restrictions placed upon us by our borrowing arrangements as well as financial and other conditions existing at the time. We use cash flow generated from operating and financing activities to fund our dividends.
We paid the following dividends during 2025 and 2024:
| Ordinary Dividends | Total Paid | |||||||||||||
| (per share) | (in millions) | |||||||||||||
| 2025 | ||||||||||||||
| First Quarter | $ | 0.20 | $ | 43 | ||||||||||
| Second Quarter | 0.20 | 42 | ||||||||||||
| Third Quarter | 0.20 | 41 | ||||||||||||
| Fourth Quarter | 0.20 | 41 | ||||||||||||
2025 Total | $ | 0.80 | $ | 167 | ||||||||||
| 2024 | ||||||||||||||
| First Quarter | $ | 0.20 | $ | 45 | ||||||||||
| Second Quarter | 0.20 | 45 | ||||||||||||
| Third Quarter | 0.20 | 44 | ||||||||||||
| Fourth Quarter | 0.20 | 43 | ||||||||||||
2024 Total | $ | 0.80 | $ | 177 | ||||||||||
On March 6, 2026, we paid our first quarter 2026 ordinary dividend of $0.20 per share to stockholders of record at the close of business on February 20, 2026.
32
Long-term Debt and Borrowing Facility
The following table provides our outstanding debt balances, net of unamortized debt issuance costs and discounts, as of January 31, 2026 and February 1, 2025:
| January 31, 2026 | February 1, 2025 | ||||||||||
| (in millions) | |||||||||||
| Senior Debt with Subsidiary Guarantee | |||||||||||
$284 million, 6.694% Fixed Interest Rate Notes due January 2027 (“2027 Notes”) | |||||||||||
Next expected filings
- ~2026-08-26 10-Q expected by 2026-09-07 (in 3 days)
- ~2026-11-18 10-Q expected by 2026-11-30 (in 87 days)
- ~2027-03-11 10-K expected by 2027-03-23 (in 200 days)
- ~2027-05-25 10-Q expected by 2027-06-06 (in 275 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-27 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-05-27 10-Q Quarterly Report
- 2026-04-28 DEF 14A Proxy Statement
- 2026-03-12 10-K Annual Report
- 2026-03-04 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-02-25 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-11-20 10-Q Quarterly Report
- 2025-11-20 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-08-28 10-Q Quarterly Report
- 2025-08-28 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-05-29 10-Q Quarterly Report
- 2025-05-29 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-05-22 8-K Material Agreement Entered; Material Financial Obligation
- 2025-05-19 8-K Earnings Release; Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-03-19 8-K Other Events; Financial Statements and Exhibits