ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Bath & Body Works's annualized return on capital (ROC %) for the quarter that ended in Apr. 2026 was 26.40%.
As of today (2026-06-25), Bath & Body Works's WACC % is 8.71%. Bath & Body Works's ROC % is 27.19% (calculated using TTM income statement data).
Bath & Body Works generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Bath & Body Works (WBO:LBRA) ROC % Explanation
ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Bath & Body Works's WACC % is 8.71%. Bath & Body Works's ROC % is 27.19% (calculated using TTM income statement data).
Bath & Body Works generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Bath & Body Works ROC % Related Terms
Bath & Body Works ROC % Historical Data
* Premium members only.
The historical data trend for Bath & Body Works's ROC % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Note:
The Operating Income data used here is four times the quarterly (Apr. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Bath & Body Works (WBO:LBRA) has a ROC % of 26.40% as of Apr. 2026. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Bath & Body Works and its competitors.
Is Bath & Body Works' ROC % too high?
Bath & Body Works' current ROC % is 26.40%. The Retail - Cyclical industry median ROC % is 4.37. Bath & Body Works' value of 26.40% is 504.1% above this industry median. Overall, Bath & Body Works has a GF Score™ of 62/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Bath & Body Works' ROC % compare to MNSO and ASO?
Bath & Body Works' ROC % of 26.40% can be compared against companies in the Retail - Cyclical industry. The industry median ROC % is 4.37. Bath & Body Works' value of 26.40% is 504.1% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROC % for a Retail - Cyclical company?
The median ROC % among Retail - Cyclical companies is 4.37, based on 1,113 companies in the industry. Companies in the top quartile (top 25%) have a ROC % significantly above this median, while those in the bottom quartile fall well below. However, ROC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Bath & Body Works's current ROC % of 26.40% is 504.1% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROC % mean?
A high ROC % can signal that a stock is expensive relative to its fundamentals. Return on capital is the ratio of current-period net income to average two-period capital. View historical data on Bath & Body Works and its competitors. For the Retail - Cyclical industry, the median ROC % is 4.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Bath & Body Works's current ROC % is 26.40%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Bath & Body Works stock overvalued right now?
Based on GuruFocus' analysis, Bath & Body Works (WBO:LBRA) is currently considered Significantly Undervalued. The stock's GF Value™ is €29.07, compared to a current price of €18.91 — trading 35% below its estimated fair value. The current ROC % is 26.40% and 504.1% above the Retail - Cyclical industry median of 4.37. Bath & Body Works' overall GF Score™ is 62/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROC % calculated?
ROC % is calculated from a company's financial statements. For Bath & Body Works (WBO:LBRA), the current ROC % is 26.40% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Bath & Body Works (WBO:LBRA) Overvalued in 2026?
Based on GuruFocus' analysis, Bath & Body Works stock appears to be undervalued.
The current stock price of €18.91 is trading 35% below its estimated GF Value™ of €29.07.
GuruFocus considers Bath & Body Works to be Significantly Undervalued.
Key valuation signals for WBO:LBRA:
ROC %: 26.40%
GF Value™: €29.07 vs. price of €18.91 (35% below fair value)
Industry Position: 504.1% above the Retail - Cyclical median
No single metric tells the full story. See the WBO:LBRA stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Bath & Body Works is a specialty home fragrance and fragrant body care retailer operating under the Bath & Body Works, C.O. Bigelow, and White Barn brands. The company generates most of its business in North America, with just 4% of sales from international markets in fiscal 2025. For fiscal 2025, 77% of sales stemmed from the brick-and-mortar network of more than 1,900 retail stores, similar to 2024 levels, as consumer shopping patterns remained normal. Future growth is expected from store upgrades, digital and international channels, as well as adjacent category expansions like men's and lip.
62GF Score
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