Bath & Body Works Inc. (BBWI) shares plummeted 5.12% in intraday trading on Thursday, despite reporting better-than-expected first-quarter earnings. The stock's decline appears to be driven by disappointing second-quarter guidance that fell short of analyst expectations.
The personal care and home fragrance company reported first-quarter earnings per share of $0.49, surpassing the FactSet consensus estimate of $0.42. Sales for the quarter came in at $1.42 billion, in line with analyst projections. Despite the earnings beat, investors seem to be focusing on the company's cautious outlook for the upcoming quarter.
Bath & Body Works provided second-quarter guidance that dampened investor enthusiasm. The company expects earnings per share for Q2 to be between $0.33 and $0.38, significantly below the FactSet consensus estimate of $0.42. This conservative projection, coupled with expectations of flat to 2% sales growth for the quarter, appears to have sparked concerns about the company's near-term performance. However, Bath & Body Works maintained its full-year 2025 outlook, projecting net sales growth of 1% to 3% and earnings per share between $3.25 and $3.60. The market's negative reaction suggests that investors may be worried about potential headwinds in the retail sector and the company's ability to navigate evolving consumer trends and economic challenges in the coming months.