Bath & Body Works shares drop following adjusted 2022 guidance

By Alessandro Carrara 19-May-2022

The brand delivered better-than-expected sales and earnings results in its first quarter

Bath & Body Works saw positive store traffic and transaction trends as customers engaged more in person

Bath & Body Works saw positive store traffic and transaction trends as customers engaged more in person

Bath & Body Works shares dropped by 8.86% yesterday after the beauty and personal care brand announced a lowered 2022 guidance in its first quarter results.

The budget-friendly American brand said the updated fiscal 2022 outlook reflected projected increases in inflationary pressures.

Beyond the overall economic price hike, Bath & Body Works has also made the decision to accelerate investments in information technology and its customer loyalty programme.

“We are accelerating investments in the business to drive our long-term growth, while at the same time, our team continues to successfully navigate the inflationary environment,” said Sarah Nash, Executive Chair and Interim CEO of Bath & Body Works.

“Long-term, we continue to see exceptional opportunities to capitalise on Bath & Body Works’ existing strengths and extend the brand’s global potential.”

Bath & Body Works, despite this, said it delivered better-than-expected sales and earnings results in the quarter.

Reported net sales for the first quarter ended 30 April were US$1.450bn, a decrease of 1% compared with the same period last year.

First quarter operating income was $280m compared with $337.2m in 2021, and net income from continuing operations was $154.9m compared to $90.3m last year.

The company’s first quarter operating income was 19.3% of net sales.

“Our business is very strong, our execution is excellent, and our strategy of delivering affordable luxuries to our customers is more relevant than ever,” added Nash.

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“We have built on the past two years of extraordinary growth with strong momentum as we entered fiscal 2022. We are pleased to have delivered better-than-expected sales and earnings results in the quarter.”

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