What Happened?

Shares of personal care and home fragrance retailer Bath & Body Works (NYSE: BBWI) jumped 3.4% in the morning session after the company announced the launch of a new Disney Villains-inspired fragrance collection, building on the success of its popular Disney Princess line. 

This new line, inspired by iconic characters like the Evil Queen and Maleficent, builds on the significant success of its previous Disney Princess collection. The launch is a key strategic move for the company, as it marks the first time a Disney-inspired collection will be released simultaneously in both domestic and international markets. This global rollout is designed to capitalize on Disney's powerful brand equity to boost sales and expand market share. The collaboration also signals a deepening, long-term relationship between the two brands, potentially unlocking future collections featuring other iconic characters. The Disney Villains collection will be available to loyalty members on August 26 and 27, with a full public launch on September 3.

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What Is The Market Telling Us

Bath and Body Works’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 4 days ago when the stock dropped 3% on the news that a hotter-than-expected wholesale inflation report fueled concerns about slowing consumer spending. 

The market was rattled by a Labor Department report showing the Producer Price Index (PPI), a measure of wholesale inflation, jumped 0.9% in July, significantly exceeding economists' expectations of a 0.2% rise. This was the largest monthly increase since March 2022, reigniting worries that businesses will be forced to pass higher costs on to consumers, who are already showing signs of price sensitivity. This inflation data has fanned concerns that U.S. tariffs on imported goods could start to translate into higher prices for shoppers. The inflation report landed amid growing evidence of consumer caution, with recent reports highlighting that shoppers are cutting back on non-essential spending, seeking out sales, and trading down to cheaper brands.

Bath and Body Works is down 20.5% since the beginning of the year, and at $30.14 per share, it is trading 26.6% below its 52-week high of $41.08 from February 2025. Investors who bought $1,000 worth of Bath and Body Works’s shares 5 years ago would now be looking at an investment worth $1,070.

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