Bath & Body Works Declines 6.2% Despite Upbeat Q1 Results

Specialty retailer Bath & Body Works, Inc. (NYSE: BBWI) has reported better-than-expected results for the first quarter ended April 30, 2022.

However, following the upbeat earnings, shares of the company declined 6.2% to close at $40.30 in Wednesday’s extended trading session. The decline can be attributed to the year-over-year fall witnessed in net sales reported by the company.

Revenue & Earnings

Bath & Body Works reported quarterly net sales of $1.45 billion, down 1% year-over-year. The figure, however, surpassed the consensus estimate of $1.43 billion.

Earnings per share (EPS) for the quarter stood at $0.64, up 100% from the same quarter last year, surpassing the consensus estimate of $0.53 per share.

The company’s partner-operated stores in the U.S. and Canada stood at 1,759 at the end of the quarter, down from 1,755 as of January 29, 2022. Its international stores stood at 356, up from 338 as of January 29, 2022.

Management’s Commentary

The CEO of Bath & Body Works, Sarah Nash, said, “Our business is very strong, our execution is excellent, and our strategy of delivering affordable luxuries to our customers is more relevant than ever. We have built on the past two years of extraordinary growth with strong momentum as we entered fiscal 2022.”

“Looking ahead in 2022, we are continuing to plan prudently and use our agility to chase winners. We are accelerating investments in the business to drive our long-term growth, while at the same time, our team continues to successfully navigate the inflationary environment,” the CEO added.

Stock Rating

Consensus among analysts is a Strong Buy based on 13 Buys and two Holds. BBWI’s average price target of $78.07 implies upside potential of 81.8% from current levels. Shares have declined 21.1% over the past year.

Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Bath & Body Works’ performance this quarter.

According to the tool, the Bath & Body Works website recorded a 121.07% monthly rise in global visits in April, compared to the same period last year. Further, the footfall on the company’s website has increased 96.11% year-to-date, compared to the previous year.

It is worth mentioning here that the data from TipRanks’ Website Traffic tool acted as a timely precursor to Bath & Body Works’ quarterly results, which exceeded expectations.

Conclusion

A year-over-year fall witnessed in the company’s net sales can be attributed to macroeconomic headwinds like inflation and muted demand. However, the growth in earnings and better-than-expected results highlight the fact that the company’s future prospects are solid.

Learn more about the Website Traffic tool in this video by Youtube sensation Tom Nash.

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