Naweed & Kamran Research
May 19, 2022

The merchandise margin rate decline compared to 2021 was driven by increased inflationary costs, which were in line with BBWI’s first quarter forecast of about $50 million. 

BBWI’s operating income rate for the quarter of 19.3% decreased 360 basis points compared to the prior year, driven by the previously described inflationary impact of approximately 350 basis points.

BBWI is forecasting incremental pressure versus its initial estimate, and it now estimated that its full year inflation impact could range between $225 million and $250 million, or about $75 million higher than its initial estimate. 

BBWI expects its gross margin rate for the second quarter of 2022 to decline significantly, to about 43% compared to 48.6% in 2021. This decline is primarily the result of an estimated $70 million in increased inflationary costs as compared to last year.

BBWI expects the full year gross margin rate to be


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