Bath & Body Works is declining despite profit growth, and guidance is disappointing

Shares of retailer Bath & Body Works (BBWI) fell in pre-market trading on Tuesday, despite a first-quarter earnings report that beat analyst expectations and the company’s own guidance.

Net sales fell less than 1% year-over-year to $1.38 billion, slightly above analyst expectations of $1.37 billion, according to estimates compiled by Visible Alpha. Profit rose 7% to $87 million, or 38 cents a share, better than analysts’ expectations of $72.4 million, or 32 cents a share. In guidance released in its previous quarterly report, Bath & Body Works projected a first-quarter sales decline of 2% to 4.5%, with EPS expected to range from 28 cents to 33 cents.

Narrowed full-year outlook, second quarter guidance excludes estimates

The retailer also raised the lower end of its guidance for the full fiscal year, forecasting net sales to range from a 2.5% decline to $7.43 billion in 2023, while EPS is expected to range from $3.05 to $3.35 , compared to last year’s level of $3.84. character.

Originally, Bath & Body Works projected that sales would range from a 3% decline to flat while EPS would range from $3.00 to $3.35. Analysts are projecting revenue of $7.41 billion for the full year and EPS of $3.31.

Bath & Body Works forecast second-quarter sales to range from a 2% decline to flat from last year’s level of $1.56 billion, while analysts forecast $1.54 billion. The retailer cut EPS from 31 cents to 36 cents, with the high end of the range matching what analysts were predicting.

Shares fell 5.4% to $49.00 about 30 minutes before Tuesday’s opening bell, but are still up more than 13% year to date.