Bath & Body Works Delivers Growth Amid Challenges, Beats Q3 Expectations And Lifts 2024 Projections

Bath & Body Works, Inc. BBWI shares are trading higher after the company reported better-than-expected third-quarter results and raised its 2024 outlook.

BBWI’s third-quarter adjusted earnings per share of 49 cents, beating the analyst consensus of 47 cents.

Quarterly sales of $1.610 billion, a growth of 3.1% year-over-year, above the street view of $1.579 billion.

The gross margin was 43.5%, down 20 bps YoY, and the operating margin was 13.5% compared to 14.2% YoY.

Related: Bath & Body Works Gears Up For Q3 Print; Here Are The Recent Forecast Changes From Wall Street’s Most Accurate Analysts

“Innovation across our core products, adjacencies, and collaborations is resonating with both new and existing customers supported by the investments we have made in marketing and technology. We are capitalizing on our agile business model and predominantly U.S.-based supply chain, and we believe we are well-positioned to navigate a volatile retail environment and shorter holiday calendar,” commented Gina Boswell, CEO of Bath & Body Works.

Net cash used for operating activities year-to-date totaled $69 million, compared to cash provided of $28 million a year ago.

Bath & Body Works exited the quarter with cash and equivalents of $191 million. The company’s inventories as of quarter end totaled $1.178 billion, with long-term debt of $3.88 billion.

Bath & Body Works had recently declared a regular quarterly dividend of $0.20 per share, payable on December 6, 2024, to shareholders of record at the close of business on November 22, 2024.

Also Read: Bath & Body Works Stock Downgraded Due To This Risk: Details

Q4 Outlook: Bath & Body Works projects net sales to decline of 6.5% to a decline of 4.5% year-over-year, reflecting a 500-basis-point headwind from a shifted fiscal calendar. Earnings per share are expected to be between $1.94 and $2.07, versus the $1.98 consensus.

2024 Outlook: The company raised fiscal 2024 guidance and now expects net sales to decline 2.5% – 1.7% (prior view: decline of 4% – 2%), including a 100-basis-point headwind from the 53rd week in 2023. Adjusted earnings per share are projected at $3.15 – $3.28 (prior view $3.06 – $3.26) versus the $3.18 consensus.

Price Action: BBWI shares are trading higher by 19.2% at $36.61 premarket at the last check Monday.

Image via Unsplash