Bath & Body Works forecast a steeper decline in annual sales on Wednesday than anticipated by Wall Street, as budget-conscious shoppers pull back spending on its pricey scented candles and fragrances.
Shares of the company, which lost nearly half of their value last year, were up about 5 percent premarket after reporting an upbeat holiday quarter.
Consumers struggling to make ends meet owing to concerns around rising costs-of-living and weak labor market have cut back spending on expensive non-essentials, in turn hurting companies such as Bath & Body Works.
Ohio-based Bath & Body Works expects full-year net sales to decline in the range of 2.5 percent to 4.5 percent, compared with analysts’ estimates of 1.9 percent decline according to data compiled by LSEG.
It also forecast full-year adjusted profit to be between $2.40 and $2.65 per share, the midpoint of which is below estimates of $2.56.
However, the company managed to raise demand during the all-important holiday quarter on the back of increased marketing and promotional efforts.
Under CEO Daniel Heaf’s “No-Regret Moves” transformation plan, Bath & Body Works has been focusing on building loyalty, elevating its digital platform and reigniting its brands through marketing, packaging and distribution.
“We are making progress, but transformations of this scale take time. We are undertaking a comprehensive, end-to-end evolution of our business,” Heaf said.
In an effort to appeal to more consumers and contend in a highly competitive retail marketplace, recently launched its products on e-commerce giant Amazon’s platform in the United States.
In November last year, the company said it would be resizing its products and exiting certain non-core categories, including hair and men’s grooming, in the first of 2026 to refocus on its key businesses.
Bath & Body Works posted quarterly sales of $2.72 billion, compared with analysts’ estimates of $2.62 billion.
It posted adjusted profit of $2.05 per share, beating estimates of $1.77 per share, for the quarter ended January 31.
By Anuja Bharat Mistry
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