Bath & Body Works Inc (NASDAQ:BBWI) stock jumped more than 5% Wednesday afternoon — a dramatic turnaround from premarket trading when shares were down more than 12% on quarterly results that initially seemed to disappoint.
Sales at the specialist retailer amounted to US$1.559 billion, short of the US$1.564 billion forecast by Wall Street analysts, and, below the US$1.618 billion achieved in the same period last year. Net income was reported at US$99 million, from US$120 million last year.
Perhaps investors took a second look at the company's earnings (adjusted EBITDA), which came in at $0.40 per share. That was better than the analyst consensus of $0.33.
The company also upped its full-year adjusted earnings guidance to a range of $2.80 to $3.10 from a prior range of $2.68 to $3.08. Analysts expect $3.04 per share, according to FactSet
Gina Boswell, Bath & Body Works chief executive, in a statement, said that early benefits of prior cost optimization and merchandising margin improvements had helped drive what she described as “earnings which outperformed our expectations.”
Bath & Body Works added that full-year net sales are now expected to decline by 1.5% to 3.5% from the US$7.56 billion it generated in 2022. Third-quarter net sales are seen between 2.5% and 4% lower than last year (US$1.604 billion), with earnings guidance set in a wide range between $0.30 to $0.40 per share.
“Our team remained agile in response to the dynamic macroeconomic environment, with a focus on delivering innovation and building capabilities to position our company for topline growth and margin expansion,” Boswell said.
“We are executing well against a diverse set of opportunities within our key areas of focus, which will enable us to better serve our customers, drive profitable growth and create long-term value for our stakeholders.”