Bath & Body Works Analysts Cut Their Forecasts After Q2 Earnings

Bath & Body Works, Inc. BBWI reported worse-than-expected second-quarter sales results and issued FY24 adjusted EPS guidance with its midpoint below estimates. Also, the company issued third-quarter EPS guidance below estimates.

The company reported the second quarter adjusted earnings per share of 37 cents, beating the analyst consensus of 36 cents. Quarterly sales of $1.526 billion (down 2.1%) missed the street view of $1.543 billion.

"We are leveraging our agile business model to navigate the dynamic retail environment. We are poised to meet their demand through our good, better, best assortment, which offers exceptionally crafted products and fragrances at price points for everyone," Gina Boswell, CEO of Bath & Body Works, said.

Bath & Body Works anticipates that its net sales for FY24 will decline between 4% and 2%, down from the previous forecast range of a 2.5% decline to no change. The company has also revised its adjusted EPS forecast to between $3.06 and $3.26, compared to the estimate of $3.26.

The company's full-year guidance includes the anticipated impact of $400 million of cash deployed towards share repurchases, which is an increase from the prior expectation of $300 million.

Bath & Body Works expects its third quarter net sales to remain flat to increase by 2.5%, with earnings per share projected to be between 41 cents and 47 cents, compared to the estimate of 53 cents.

Bath & Body Works shares dipped 7% to close at $32.29 on Wednesday.

These analysts made changes to their price targets on Bath & Body Works following earnings announcement.

• Baird analyst Mark Altschwager maintained Bath & Body Works with an Outperform and lowered the price target from $54 to $45.
• B of A Securities analyst Lorraine Hutchinson maintained the stock with a Buy and lowered the price target from $54 to $45.
• UBS analyst Jay Sole maintained Bath & Body Works with a Neutral and cut the price target from $52 to $38.
• Barclays analyst Adrienne Yih maintained the stock with an Equal-Weight and lowered the price target from $32 to $31.
• Raymond James analyst Olivia Tong maintained Bath & Body Works with an Outperform and lowered the price target from $51 to $42.

Considering buying BBWI stock? Here’s what analysts think: