BBWI Stock Cracks After CEO Warns Of Tough Holiday Quarter, Slashes Full-Year Guidance

• Bath & Body Works now expects annual adjusted earnings per diluted share to be at least $2.87, compared to the prior estimate of $3.35 to $3.60.
• The company added that the fourth-quarter outlook includes the anticipated impact of all tariff rates currently in effect, levied by the U.S. government and other countries.
• The company reported third-quarter net sales of $1.59 billion, compared with Wall Street expectations of $1.63 billion, according to data from Fiscal AI.

Bath & Body Works (BBWI) shares tumbled nearly 23% in early trading on Thursday after CEO Daniel Heaf noted that the company’s third-quarter results were below expectations and that the retailer was lowering its outlook for the remainder of the year to reflect current business trends and the continuation of recent macro consumer pressures. 

“While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth,” Heaf said. He added that the consumers will begin to see the benefits of these changes in the coming quarters, though it will take time for the impact to be reflected in the company’s financial performance.

The company said it was revising its full-year 2025 net sales guidance to a decline in the low single digits, compared with the previous forecast of 1.5% to 2.7% growth. Bath & Body Works now expects annual adjusted earnings per diluted share to be at least $2.87, compared to the prior estimate of $3.35 to $3.60.

BBWI’s Transformation Plan

Heaf outlined a plan to turn the struggling personal care products company around at a time when demand for its scented candles and perfumes had taken a hit from consumers, mainly in the United States, shunning purchases of higher-end products due to price hikes in the economy.

The CEO noted that the plan focuses on Bath & Body Works’ investments mainly by creating “disruptive and innovative” products, reigniting the brand, winning in the marketplace, and operating with speed and efficiency.

“We will transform Bath & Body Works to be a faster and more efficient organization. Work has already begun, and we will continue to break down silos, speed up decision making and strengthen the agile operating model that makes this company great,” the company said.

Bath & Body Works said that, as part of its turnaround plans, it expects to deliver $250 million in cost savings over two years, with over half of those identified for 2026. “These savings will be used to invest in revenue-generating initiatives across product and brand,” the company said.

Holiday Quarter Forecast

The company said it expects fourth-quarter 2025 net sales to be down in the high single digits, compared with $2.79 billion in the fourth quarter of 2024. Bath & Body Works said that fourth-quarter earnings per share are expected to be at least $1.70, compared to $2.09 a year ago.

“Our fourth quarter guidance reflects the continuation of recent negative macro consumer sentiment weighing heavily on our consumers’ purchase intent,” the company said.

Bath & Body Works added that the fourth-quarter outlook includes the anticipated impact of all tariffs currently in effect, levied by the U.S. government and other countries.

The company reported third-quarter net sales of $1.59 billion, compared with Wall Street expectations of $1.63 billion, according to data from Fiscal AI. Its quarterly adjusted earnings per share were $0.35, compared with estimates of $0.40.

What Is Retail Thinking?

Retail sentiment on Bath & Body Works jumped to ‘extremely bullish’ from ‘neutral’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Shares of Bath & Body Works have declined over 45% this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Also See: Walmart Raises FY26 Outlook, Outgoing CEO McMillon Says Retailer Is Winning Market Share

Share

·

Add us on