Bath & Body Works (NYSE:BBWI) revised its full-year profit outlook downward, significantly falling short of Wall Street expectations, and anticipates a decline in annual sales.
The company’s shares dropped more than 12% intra-day today following the announcement. The company now projects net sales for 2024 to decrease by 2.5% to remain flat, a slight improvement from its previous forecast of a 3% decline to flat, but still below analysts’ expectations of a 0.37% drop.
Despite efforts to boost sales through promotions, increased marketing, and new product launches, the company is grappling with subdued demand for its scented candles and body care products amid persistent inflation. Consumers, facing budget constraints, are reluctant to spend on non-essential luxury items.
The company expects Q2 diluted EPS to range between 31 cents and 36 cents, below the anticipated 39 cents, with net sales expected to decline by 2% to remain flat, slightly better than the projected 1.41% drop.
In Q1, the company reported a 0.9% decline in net sales to $1.38 billion, slightly above the $1.37 billion forecast. Earnings per share stood at $0.38, surpassing the Wall Street estimate of $0.33.