With the colder months coming on, it should be little surprise to see thoughts turn to hot baths and scented candles. And why not? After a certain point, opening a window becomes an exercise in futility that wastes heat, so improving your indoor setting makes sense. But that is little comfort to Bath & Body Works (BBWI) investors, who sent shares down nearly 8% in Wednesday afternoon’s trading. The biggest reason for the decline is a slashed sales forecast.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Bath & Body Works now expects net sales for 2024 to decline between 2% and 4%, which compares to the earlier projections looking for a drop between 0% and 2.5%. Consumers are still in the grips of terrible inflation, after all, with the prices at the grocery store and nearly everywhere else cripplingly high.
Granted, Bath & Body Works released some new lines, including a line of fragrance and “personal care products” for men, but these lines have had limited impact so far. Indeed, men are spending just as much on essentials these days, and that limits the overall range of new products they can purchase that are not essential.
Stranger Things Themed Products
However, give Bath & Body Works credit; it will not go down without a fight. In fact, with rumors suggesting that a fifth season of Stranger Things will be released in 2025, Bath & Body Works is taking advantage with a new line of products that will be part of the “Stranger Things Chapter Two Collection.”
This will include hand sanitizers, candles, a “fragrance plug nightlight,” and more. Indeed, customers will be able to smell “The Upside Down,” a feature from the series. The fragrance is described as a combination of “mossy stone, smoky birch tree, and eerie fog,” intended to create “a sinking, creeping feeling that something isn’t quite right.”
Is Bath & Body Works a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BBWI stock based on eight Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After an 11.89% loss in its share price over the past year, the average BBWI price target of $47.73 per share implies 49.53% upside potential.
