Bath & Body Works stock slides on annual sales forecast cut

Bath & Body Works (NYSE: BBWI) shares fell over 6% Wednesday after the retailer trimmed its annual sales forecast.

For the Q2, the company reported earnings per share (EPS) of $0.37, just ahead of consensus expectations of $0.36. The company’s revenue for the quarter reached $1.5 billion, falling short of the consensus estimate of $1.55 billion.

In the U.S. and Canada, store sales amounted to $1.14 billion, just below the projected $1.15 billion. Direct sales in these regions came in at $297 million, missing the $320 million estimate.

Operating income for the quarter was $183 million, a 2.7% year-over-year decline, but still above the $173.9 million estimate.

For fiscal 2024, Bath & Body Works has revised its guidance, now projecting its annual adjusted profit to be between $3.06 and $3.26 per share, compared with the $3.05 and $3.35 per share forecast earlier.

For full-year net sales, BBWI projects a decline of 4% to 2%, down from its prior forecast of a 2.5% drop to flat.

"Clearly, needing to lower is not ideal, but based on our conversations, we believe most investors were already there, with some fearing worse, driving an attractive valuation," analysts at BMO Capital Markets commented.

The company said its guidance includes the impact of $400 million in cash allocated for share repurchases, an increase from the previously expected $300 million.

For the third quarter, Bath & Body Works expects EPS to range between $0.41 and $0.47, below the analyst estimate of $0.53. The company also projects Q3 2024 net sales to range from flat to a 2.5% increase, compared to the 1.5% growth estimated by analysts.

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