A stockholder has taken legal action against a major retail company, alleging that its board of directors and executive officers have engaged in serious misconduct. Edward Smith filed a verified stockholder derivative complaint on January 30, 2026, in the United States District Court for the Southern District of Ohio against Bath & Body Works, Inc., accusing them of breaches of fiduciary duties, gross mismanagement, waste of corporate assets, unjust enrichment, and violations of federal securities laws.
The lawsuit details how the company’s executives and board members allegedly made materially false and misleading statements about the company’s financial health and business operations from January 1, 2024, to November 19, 2025. According to the complaint, during this period, Bath & Body Works reported declining earnings per share and net income while simultaneously reducing their full-year financial guidance. These actions were purportedly masked by a strategy focused on “adjacencies, collaborations and promotions,” which failed to grow the customer base or achieve expected sales growth. The plaintiff argues that these strategies obscured weak underlying financial results and ultimately led to significant drops in stock prices when financial realities came to light.
The complaint cites several instances where Bath & Body Works released optimistic financial projections only to later revise them downward significantly. For example, on August 28, 2025, the company reported a sharp decline in earnings per share compared to the previous year and adjusted its full-year earnings guidance downward. Following these announcements, Bath & Body Works’ stock price fell sharply. Similarly, further disappointing third-quarter results were announced on November 20, 2025, leading to another steep decline in stock value.
Edward Smith seeks judicial intervention for damages caused by these alleged actions. He requests that the court hold the board members accountable for their breach of fiduciary duties and seeks relief including monetary damages for losses incurred by shareholders due to these misrepresentations.
The case is being handled by Judge Edmund A. Sargus Jr., with attorneys representing both sides yet unnamed in public records. The case identification number is 2:26-cv-00112-EAS-EPD.
Source: 226cv00112_Smith_v_Heaf_Complaint_Southern_District_Ohio.pdf