Comparing Bath & Body Works (NYSE:BBWI) and Kirkland’s (NASDAQ:KIRK)

Bath & Body Works (NYSE:BBWI) and Kirkland’s (NASDAQ:KIRK) are both retail/wholesale companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, institutional ownership, profitability and earnings.

Profitability

This table compares Bath & Body Works and Kirkland’s’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	12.43%	-44.03%	14.45%
Kirkland’s	-4.56%	N/A	-6.56%

Risk & Volatility

Bath & Body Works has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Kirkland’s has a beta of 2.42, suggesting that its stock price is 142% more volatile than the S&P 500.

Earnings and Valuation

This table compares Bath & Body Works and Kirkland’s”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bath & Body Works	$7.43 billion	1.11	$878.00 million	$4.10	9.31
Kirkland’s	$468.69 million	0.05	-$27.75 million	($1.60)	-1.06

Bath & Body Works has higher revenue and earnings than Kirkland’s. Kirkland’s is trading at a lower price-to-earnings ratio than Bath & Body Works, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Bath & Body Works and Kirkland’s, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	6	9	0	2.50
Kirkland’s	0	1	1	0	2.50

Bath & Body Works presently has a consensus target price of $42.50, suggesting a potential upside of 11.31%. Kirkland’s has a consensus target price of $4.50, suggesting a potential upside of 164.71%. Given Kirkland’s’ higher possible upside, analysts plainly believe Kirkland’s is more favorable than Bath & Body Works.

Insider and Institutional Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. Comparatively, 15.4% of Kirkland’s shares are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by insiders. Comparatively, 5.0% of Kirkland’s shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Bath & Body Works beats Kirkland’s on 9 of the 13 factors compared between the two stocks.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.

About Kirkland’s

Kirkland’s, Inc. operates as a specialty retailer of home décor and furnishings in the United States. Its stores provide various merchandise, including holiday décor, furniture, textiles, ornamental wall décor, decorative accessories, art, mirrors, home fragrance, lighting, floral, housewares, outdoor, and gifts. The company operates its stores under the Kirkland’s, Kirkland’s Home, Kirkland’s Home Outlet, Kirkland’s Outlet, and Kirkland Collection names. It also operates an e-commerce website, kirklands.com. The company was founded in 1966 and is headquartered in Brentwood, Tennessee.