Bath & Body Works cuts 130 jobs, COO exits as sales, profits fall
Bath & Body Works is taking steps to improve profitability in the wake of a tough quarter, and its operations chief is leaving the company.
The specialty retailer has eliminated about 130 roles, the majority of which were leadership positions, as part of recent efforts to simplify and realign its operating structure. These initiatives also include organizational changes, additional cost control actions, and merchandise margin improvement opportunities.
Together, Bath & Body Works said these actions are expected to result in estimated savings of approximately $30 million in the second half of 2022, prior to any impact from severance. The company expects to record severance and other charges of approximately $6 million in the third quarter of 2022 related to the organizational actions.
Second quarter 2022 results
Bath & Body Works reported net sales of $1.62 billion for the second quarter of fiscal 2022, ended July 30, 2022, a decrease of 5% compared to net sales of $1.7 billion for the second quarter ended July 31, 2021, but an increase of 45% compared to the second quarter of 2019.
The company reported earnings from continuing operations per diluted share of $0.52 for the second quarter ended July 30, 2022, compared to $0.77 for the quarter ended July 31, 2021. Net income from continuing operations was $120 million, down 44% from $215.3 million in the same quarter in fiscal 2021. In July 2022, Bath & Body Works downgraded its second-quarter forecast, citing a “challenging operating and macroeconomic environment.”
Looking ahead, Bath & Body Works is forecasting third-quarter earnings from continuing operations per diluted share between $0.10 and $0.20. For fiscal 2022, the company is forecasting earnings from continuing operations per diluted share between $2.70 and $3.00.
Separately, Bath & Body Works COO Chris T. Cramer has officially left the company. In an SEC filing, the retailer said Cramer’s decision to resign was not due to a dispute or disagreement with the company or its management. The company does not intend to fill the COO role, and Cramer’s responsibilities will be overseen by other members of the corporate management team.
“Our results in the second quarter were better than our most recent expectations, reflecting improvement in sales toward the end of the quarter as customers responded to newness in our assortment as well as favorability in expenses,” said Sarah Nash, executive chair and interim CEO of Bath & Body Works. “The business continues to perform at levels significantly above pre-pandemic and our team is effectively navigating the challenging environment and inflationary pressure affecting our customers and our business.”
Bath & Body Works, along with Victoria’s Secret, was previously a part of L Brands. The two brands were spun off into two independent public businesses in August 2021. Bath & Body Works operates more than 1,770 company-operated Bath & Body Works locations in the U.S. and Canada, and more than 360 international franchised locations, as well as an online storefront at bathandbodyworks.com.