Bath & Body Works Q2 Profit Beats View; Warns On Q3 Earnings, Updates FY24 Outlook; Stock Down

(RTTNews) - Home fragrance company Bath & Body Works, Inc. (BBWI) reported Wednesday higher profit in its second quarter, despite weak sales. Adjusted earnings topped market estimates.

Further, the firm issued third-quarter outlook below market view, and updated its fiscal 2024 forecast. The company also increased its full-year expected share repurchases to $400 million from the prior expectation of $300 million.

In pre-market activity on the NYSE, Bath & Body Works shares were losing around 2.7 percent to trade at $33.80.

Outlook

For the third quarter, the company expects earnings per share to be between $0.41 and $0.47, compared to last year's earnings per share of $0.52 on a reported basis, and $0.48 on an adjusted basis.

Third-quarter 2024 net sales is projected to range between flat to an increase of 2.5 percent, compared to $1.56 billion a year ago. The third-quarter results will benefit by around 200 basis points from the shifted fiscal calendar, resulting from the extra week in 2023.

Analysts on average expect the company to report earnings of $0.53 per share on sales of $1.58 billion, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items.

Further, for fiscal 2024, earnings per share is now expected to be between $3.37 and $3.57, compared to last year's $3.84. Adjusted earnings per share is now expected to be between $3.06 and $3.26, compared to $3.27 in fiscal 2023.

The company now expects net sales to range between a decline of 4 percent to a decline of 2 percent, relative to $7.43 billion a year earlier.

Analysts expect the company to report earnings of $3.26 per share on sales of $7.37 billion for the year.

The company previously projected earnings in a range of $3.05 to $3.35 per share on revenues between a decline of 2.5 percent and flat from last years $7.43 billion, implying revenues between $7.28 billion and $7.43 billion.

Q2 Results

In its second quarter, net income was $152 million, compared to $99 million last year. Earnings per share climbed to $0.68 from $0.43 in the prior year.

Adjusted net income was $83 million, compared to $92 million last year. Adjusted earnings per share was $0.37, compared to $0.40 a year ago.

The company reported net sales of $1.53 billion, a decrease of 2.1 percent from prior year's $1.56 billion.

The Street was looking for earnings of $0.36 per share on sales of $1.54 billion for the quarter.

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