Key facts
- Bath & Body Works raised its annual profit forecast and beat Q2 estimates.
- Digital sales of body care and home fragrances drove performance.
- Q2 sales reached $1.51 billion, exceeding the $1.50 billion estimate.
- Annual adjusted profit is now expected to be between $2.60 and $2.80 per share.
- The company expects a 2.5% to 5% drop in Q3 net sales.
- Q3 adjusted EPS is projected to be between 7 cents and 12 cents.
Bath & Body Works on Wednesday raised its forecast for full-year profit and beat estimates for second-quarter results, benefiting from demand for body care products and home fragrances on digital channels. The company posted second-quarter sales of $1.51 billion, edging past analysts' estimate of $1.50 billion. CEO Daniel Heaf noted that while turnaround efforts are progressing, they have yet to fully offset changes in the business, with a decline in store traffic and broader mall traffic weakness observed. The company is expanding distribution through third-party channels like Amazon and Ulta Beauty to attract younger consumers. Bath & Body Works now expects annual adjusted profit between $2.60 and $2.80 per share, an increase from its prior forecast of $2.40 to $2.65 per share. The company also benefited from approximately $80 million in tariff refunds during the second quarter. Excluding this benefit, earnings per share stood at 31 cents, surpassing the analyst estimate of 24 cents per share. For the third quarter, Bath & Body Works forecasts a net sales drop of between 2.5% and 5%, with adjusted EPS projected between 7 cents and 12 cents, below the analyst expectation of 26 cents.