Bath & Body Works (NYSE:BBWI) shares plunged by over 8% in the premarket session today after the specialty retailer reported its first-quarter results. While the company’s Q1 performance fared better than estimates, its dismal financial outlook largely failed to boost investor sentiment.
Bath & Body Works’ Earnings Beat
BBWI’s Q1 revenue declined marginally by 0.9% year-over-year to $1.38 billion, outpacing expectations by $10 million. Similarly, its diluted EPS of $0.38 exceeded estimates by $0.05. This was an improvement of roughly 15% in the company’s bottom line.
BBWI’s Fineprint Disappoints
During the quarter, BBWI’s store sales in the U.S. and Canada improved by 3% to $1.06 billion. Its Direct sales (inclusive of wholesale sales and franchised stores), on the other hand, declined by 6.8% to $261 million. The company’s International segment sales contracted by 29.3% to $58 million.
Another Not-So-Great Outlook for BBWI
Despite this somewhat mixed performance, the company narrowed its financial outlook for the full year. For Fiscal year 2024, BBWI now anticipates a flat to -2.5% net sales growth. EPS for the year is seen landing at $3.05-$3.35. Previously, BBWI anticipated a flat to -3% net sales growth and an EPS of $3-$3.35 for the year. For the upcoming quarter, the retailer anticipates a flat to -2% net sales growth and an EPS of $0.31-$0.36.
Is Bath & Body Works a Buy, Sell, or a Hold?
Today’s price decline comes after a nearly 41% jump in the company’s share price over the past six months. Overall, the Street has a Moderate Buy consensus rating on Bath & Body Works, alongside an average BBWI price target of $50.43. However, analysts’ views on the stock could see changes following today’s earnings report.
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