Bath & Body Works Inc (NYSE:BBWI) stock fell 3.41% (As on August 29, 11:26:52 AM UTC-4, Source: Google Finance) after the company cut its annual sales forecast, a sign of weaker demand for its pricey products such as fragrances and scented candles in the face of still-high inflation. Consumers, grappling with rising costs of living, are still cautious on spending on expensive discretionary items ranging from electronics and apparel to home goods and instead prioritizing shopping for essential products such as groceries and medicines. Second quarter operating income was $183 million compared to $188 million last year, and net income was $152 million compared to $99 million last year. The company has reported second quarter 2024 results included a $39 million pre-tax gain ($25 million net of tax of $14 million) related to the sales of certain Easton investments and a $44 million tax benefit related to the release of a valuation allowance on a deferred tax asset.
BBWI in the second quarter of FY 24 has reported the adjusted earnings per share of 37 cents, beating the analysts’ estimates for the adjusted earnings per share of 36 cents. This is helped by its cost-reduction measures and easing transportation expenses. The company had reported the adjusted revenue decline of 2.1 percent to $1.53 billion in the second quarter of FY 24, missing the analysts’ estimates for revenue of $1.54 billion, according to LSEG data.
Bath & Body Works expects 2024 net sales to decline between 2% and 4%, compared with its prior forecast of a fall of 2.5% to flat. It projects annual adjusted profit to be between $3.06 and $3.26 per share, compared with the $3.05 and $3.35 per share forecast earlier. 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.
The company expects third quarter 2024 net sales to range between flat to an increase of 2.5%, compared to $1,562 million in the third quarter 2023. We expect the third quarter will benefit by approximately 200 basis points from the shifted fiscal calendar, resulting from the extra week in 2023. Third quarter earnings per diluted share is expected to be between $0.41 and $0.47, compared to earnings per diluted share of $0.52 and adjusted earnings per diluted share of $0.48 in the third quarter 2023.