Bath & Body Works Inc (NYSE:BBWI) tumbled on Thursday after the specialty retailer cut its full-year outlook and posted quarterly results that fell short of Wall Street estimates, citing soft consumer sentiment and weaker spending on discretionary items.
Shares of the company slid about 20% in premarket trading, hitting their lowest level in five years.
The retailer reported third-quarter earnings of $0.35 per share, below analysts’ expectations of $0.40, while revenue fell to $1.6 billion from $1.63 billion estimated.
Management said it now expects 2025 net sales to decline by a low single-digit percentage, with adjusted earnings per share of about $2.87, well below the $3.42 consensus. The company also projected fourth-quarter sales to fall by a high single-digit rate.
The guidance cut highlights ongoing pressure on US consumers, who have grown more cautious amid inflation and tighter household budgets. Bath & Body Works said waning sentiment is weighing on shoppers’ willingness to spend, particularly on non-essential categories.
The retailer said it is bracing for slower growth as customers pull back, reflecting broader caution in the retail sector heading into the holiday season.