Bath & Body Works is changing the way it plans and purchases inventory for promotional events, with the retailer reporting lower levels of distressed merchandise ahead of its June semiannual sale period.
The shift was highlighted during the company’s Q2 earnings call last week. CEO Daniel Heaf attributed the reduction in distressed inventory to what he described as “buying our seasonal business correctly.”
Although total inventory was up 10% year over year at the end of the quarter, Heaf said the company had significantly improved the quality of its forward inventory position.
A different approach to promotional inventory
Bath & Body Works is no longer looking to build large inventories specifically to clear them through its semiannual sales.
“We aren’t looking to buy large amounts of inventory that we can flush through in semiannual sales,” Heaf said, explaining that promotional activity will become less of a priority during the second half of the year.
The change represents a broader adjustment to the retailer’s supply planning and purchasing strategy. Promotions and markdowns will remain important tools for Bath & Body Works, but the company intends to rely on them more heavily during the first six months of the year.
Heaf said the retailer is increasingly looking toward brand marketing and new products to support growth in the second half.
“My macro is you can’t promote a business back to health,” Heaf said. “So, we’re using that lever less, and we’re using brand marketing and product as the things that we are leaning on to drive growth in the back half.”
Inventory remains focused on demand
Despite the 10% year-over-year increase in overall inventory reported at the end of June, Heaf said the company’s forward inventory was “clean” and that Bath & Body Works was “well positioned to deliver in the back half.”
The retailer is also actively replenishing inventory for popular product launches. One example is its Fruit Fusion line, for which pop star and actress Hilary Duff serves as both brand ambassador and creative partner.
SKU reduction remains part of the turnaround
Bath & Body Works’ efforts to rightsize its product mix remain a central part of its broader turnaround strategy, following sluggish sales in 2025.
The company previously announced that it would begin exiting selected product categories in Q1 of this year as it introduced its “Consumer First Formula” growth strategy. During last week’s earnings call, Heaf said the retailer was broadly on track with its SKU simplification program at the end of Q2.
The decision to reduce the number of products carried by the retailer was driven in part by customer feedback. During a November earnings call, the company said customers found some stores “too overwhelming and confusing” because of the breadth of the assortment.
Bath & Body Works’ approach mirrors moves being made by other retailers seeking to simplify their product ranges. BJ’s Wholesale Club, for example, recently announced plans to cut its product count by 20% over the next several years after determining that it had become “over SKUed,” according to President and CEO Bob Eddy.
For Bath & Body Works, the combination of tighter SKU management, more disciplined seasonal purchasing and a reduced reliance on markdowns is becoming an important component of its strategy to improve inventory quality and support growth beyond promotional events.
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