Bath & Body Works lifts forecast on better-than-expected Q1 results
Bath & Body Works reported first-quarter earnings amid sales that beat Street expectations and boosted its full-year guidance.
Gina Boswell, who took the reins as CEO in November, said the company is benefiting from a loyal customer base that is receptive to product innovations, such as its new soap formulation made without paraben, sulfate or dyes. Bath & Body Works is also benefitting from its loyalty program, which launched in August 2022 and now counts 37 million members.
The retailer reported net income of $81 million, with earnings per share of $0.35, for the quarter ended April 29, down from $155 million, or $0.64 a share in the year-ago quarter. Adjusted earnings per share were $0.33, topping analysts’ expectations of of $0.26 per share.
Sales fell 4% to $1.396 billion, just ahead of the $1.393 billion that analysts had forecast.
“We delivered first quarter sales in line with our expectations while our EPS was better than anticipated as we saw benefits from our work to improve merchandise margin as well as early benefits from our cost optimization initiatives,” Boswell stated in the earnings release. “Looking forward, we are moving quickly and implementing our plans to profitably grow sales and drive long-term value for our shareholders.”
In February, Bath & Body Works announced plans to undertake about 115 total real estate projects in 2023, consisting of about 90 new off-mall stores and 25 remodels to the White Barn store design. The openings will be offset by about 50 mall closures.
The company updated its full-year forecast to reflect better-than-expected bottom line results and the impact of the gain on the early extinguishment of debt in the first quarter. While the retailer still expects sales to be flat to down in the mid-single digits, it now forecasts adjusted earnings per share to range from $2.68 to $3.08. Analysts had forecast earnings per share of $2.94.
Bath & Body works noted that fiscal 2023 will include a 53rd week, with the fourth quarter of fiscal 2023 consisting of 14 weeks.
Bath & Body Works has more than 1,800 company-operated locations in the U.S. and Canada and more than 435 international franchised locations in addition to an online storefront.