Bath & Body Works Inc. (BBWI)

Debt-to-capital ratio

Feb 3, 2024 Jan 28, 2023 Jan 29, 2022 Jan 30, 2021 Feb 1, 2020
Long-term debt US$ in thousands 4,388,000 4,862,000 4,854,000 6,366,000 5,487,000
Total stockholders’ equity US$ in thousands -1,627,000 -2,206,000 -1,518,000 -662,000 -1,499,000
Debt-to-capital ratio 1.59 1.83 1.46 1.12 1.38

February 3, 2024 calculation

Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $4,388,000K ÷ ($4,388,000K + $-1,627,000K)
= 1.59

The debt-to-capital ratio of Bath & Body Works Inc. has fluctuated over the past five years. The ratio stood at 1.38 in 2020 and increased to 1.59 in 2024, indicating a higher level of debt relative to total capital employed in the business. This suggests that the company has been relying more on debt financing compared to equity financing.

The peak ratio of 1.83 in 2023 indicates a significant increase in debt relative to capital, which may raise concerns about the company's financial leverage and ability to meet its debt obligations in the future. However, the ratio decreased to 1.46 in 2022 and further dropped to 1.12 in 2021, which could indicate management efforts to reduce debt levels or increase equity capital in the business.

Overall, the trend in the debt-to-capital ratio for Bath & Body Works Inc. shows some level of volatility, with fluctuations over the years. Investors and analysts should closely monitor this ratio to assess the company's financial risk and capital structure decisions.


Peer comparison

Feb 3, 2024

Company name
Symbol
Debt-to-capital ratio
Bath & Body Works Inc.
BBWI
1.59
Victoria's Secret & Co
VSCO
0.73