Bath & Body Works, Inc.’s (NYSE:BBWI) price-to-earnings (or “P/E”) ratio of 8.5x might make it look like a strong buy right now compared to the market in the United States, where around half of the companies have P/E ratios above 18x and even P/E’s above 32x are quite common. However, the P/E might be quite low for a reason and it requires further investigation to determine if it’s justified.

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While the market has experienced earnings growth lately, Bath & Body Works’ earnings have gone into reverse gear, which is not great. It seems that many are expecting the dour earnings performance to persist,…