Bath & Body Works Inc. cut its full-year outlook, saying weak consumer sentiment is hurting shoppers’ willingness to spend and the expected impact of tariffs imposed by the US and other countries.
For the full year, net sales are expected to decline in the low single digits, a cut from its previous forecast of a 1.5 percent to 2.7 percent increase. Adjusted earnings per share are expected to be at least $2.87, below the Street’s estimated $3.42.
That implies a high single-digit net sales decline in the final quarter of the year.
Results in the third quarter fell short of expectations, with revenue of $1.59 billion trailing the average analyst estimate of $1.63 billion. Earnings, less some items, of 37 cents a share were below the 39-cent consensus.
“While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth,” Chief Executive Officer Daniel Heaf said in a statement Thursday. “Consumers will begin to see the benefits of these changes in the coming quarters, though it will take time for the impact to be reflected in our financial performance.”
Bath & Body Works also launched a transformation plan — named the Consumer First Formula — which is projecting $250 million in cost savings over the next two years, according to the filing.
Heaf, who took over as CEO of the Ohio-based company in May, is focused on driving durable, long-term growth by enhancing digital capabilities, amplifying product efficacy messaging, and supporting product launches, TD Cowen analyst Jonna Kim wrote in a note before the report.
While sales slowed down toward the end of the quarter, according to Bloomberg Second Measure, the company is in the “early innings of a turnaround with a path toward sustainable and durable sales growth,” Kim said in the note. “But it may take a couple of quarters to see visible results.”
The company expects roughly $650 million in free cash flow for 2025, factoring in tariffs and $400 million in share buybacks.
Shares fell as much as 12 percent in premarket trading. The stock had fallen 46 percent this year before today, compared with a 1.2 percent gain for the S&P 400 Midcap Index.
By Arvelisse Bonilla Ramos
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