Bath & Body Works Inc. (NYSE: BBWI) saw its stock price plummet 24.24% in Thursday's pre-market trading following the release of disappointing third-quarter results and a significant cut to its full-year guidance. The personal care and home fragrance retailer reported adjusted earnings per share of $0.35, missing analysts' expectations of $0.39 and down from $0.49 in the same quarter last year. Net sales declined 1% to $1.59 billion, falling short of the $1.63 billion forecast by analysts.

The company drastically lowered its outlook for fiscal year 2025, citing weakening consumer sentiment and macro pressures. Bath & Body Works now expects full-year net sales to decline in the low single digits, a stark contrast to its previous forecast of 1.5% to 2.7% growth. The adjusted earnings per share guidance was slashed to "at least $2.87," down from the prior range of $3.35 to $3.60. This revised outlook includes the anticipated impact of all current tariff rates.

In response to these challenges, Bath & Body Works announced a strategic transformation plan dubbed the "Consumer First Formula." CEO Daniel Heaf outlined four key priorities: reinvigorating core product categories, enhancing brand appeal, improving digital and in-store experiences, and optimizing operations. The company aims to deliver $250 million in cost savings over the next two years, with more than half targeted for 2026. Despite these efforts, management warned that annual sales are unlikely to return to growth until 2027, signaling a prolonged period of difficulty for the retailer in the face of changing consumer behaviors and economic pressures.