Bath & Body Works faces its May 27 first-quarter print with the stock down 16% on the week, short interest near its highest level of the past month, and three analyst firms trimming targets in the past five days alone.
The short side has been quietly building. Short interest as a percentage of the free float rose from roughly 7.5% in late April to 8.3% now — a step change that coincides almost exactly with last week's sharp price break. The move higher in shorts came in one jump: SI climbed from 7.6% to 8.4% in a single session on May 11–12, and has held there. That 8.3% reading puts it close to the April 9 peak of 8.5%, which was itself the highest point in the dataset. Borrow costs, at 0.35%, remain negligible — the lending market is not squeezed in the slightest, with availability at nearly 3,900% of short interest. That level of availability means anyone wanting to add a short position faces no friction from the borrow market.
Options tell a different story. Despite the week's selloff, call demand has held up relative to recent norms. The put/call ratio is running at 0.71, well below its 20-day average of 0.87, and the z-score of -0.92 suggests options traders are leaning toward calls rather than hedging aggressively. The gap between the elevated short interest and the call-tilted options positioning is the week's central tension: one set of participants is pressing the short side, while another appears positioned for a bounce or recovery into earnings.
The Street has moved decisively negative in the run-up to the May 27 print. UBS lowered its target to $19 from $22 on May 20, maintaining Neutral. TD Cowen cut from $26 to $20 earlier in the week, keeping its Buy but with diminished conviction. Piper Sandler downgraded to Neutral on May 15, moving away from its prior Overweight. The mean price target from all analysts is $26.43 — still 64% above the current $16.11 close — but that headline number reflects older, higher targets that predate this week's cuts. The bull case rests on brand strength, the Amazon channel launch, and expansion into men's and lip products. Bears point to margin pressure, competition from Amazon resellers, and limited near-term visibility. With EV/EBITDA at 5.9x and a trailing PE near 5.9x, the valuation is undemanding; the EV/EBIT factor ranks in the 89th percentile of the universe. The stock's weakness is less about being expensive and more about whether earnings growth can materialise.
Insider activity adds a mild positive wrinkle. The 90-day net is a modest buy of roughly 24,000 shares worth $459,000 — though that figure is flattered by a cluster of board-level purchases back in November 2025 near $15, when five directors bought a combined ~62,500 shares. The CEO sold 7,334 shares in mid-May at $17.09, a small transaction with significance rated at the lowest tier. The directional message from insiders is mixed rather than alarming.
The closest US peers have also sold off. SCVL dropped 6% on the week and VSCO fell about 3%. WSM and HD saw shallower declines of 2% and 2.6% respectively, suggesting BBWI's 16% drop reflects something company-specific rather than pure sector rotation. The prior earnings print on March 4 produced a modest -0.6% one-day reaction but a -10.6% five-day drift — a reminder that weak results can take several sessions to fully reprice.
The May 27 print is the next hard catalyst. With shorts near a recent peak, three analyst target cuts in five days, and a stock trading below every fresh price target on the board, the focus will be on whether the Q1 print and any guidance revision can either confirm the bears' thesis or give the options-market bulls the bounce they appear to be positioned for.
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