- Bath & Body Works lowered its second-quarter and full-year sales guidance.
- The company cited inflation and a more difficult macroeconomic environment.
- Shares bounced back Wednesday afternoon after a sharp decline in the morning.
Shares of Bath & Body Works initially fell Wednesday after the company lowered its sales and earnings outlook, citing a more challenging macroeconomic environment.
But the stock clawed its way into positive territory later in the day, closing up 3% at $31.10.
“Our data indicates that customers, particularly lower income customers, have become more cost conscious and are limiting purchases,” the company said in a statement.
For the second quarter, the home fragrance and personal care retailer said it now expects sales to be down 6% to 7% from the same time last year. For the full year, it now expects sales to be down mid- to high-single digits from 2021.
Previously, Bath & Body had forecast second-quarter and full-year sales to grow in the low single digits from a year ago.
Bath & Body Works also said it now expect second-quarter earnings from continuing operations to be 40 to 42 cents per share, down from its previous forecast of 60 to 65 cents a share.
The company said it sought to address the more cautious spending by increasing sales and promotions, but noted that the moves have impacted its margins.
Bath & Body Works is scheduled to report its second-quarter earnings on August 17.
Analysts at Raymond James said Wednesday they were remaining bullish on the stock.
“We continue to rate shares Strong Buy as we believe they already reflect the impact of a more significant slowdown, while the company’s solid innovation pipeline and initiatives such as the loyalty program, as well as margin pressure alleviating, position the company well for medium- to long-term growth,” they wrote.
Source: Business - cnbc.com
