Bath & Body Works Q1 earnings: revenue slides 0.9%

on Jun 4, 2024
  • Bath & Body Works reported its financial results for the first quarter today.
  • Here's what its CEO Gina Boswell said in a press release on Tuesday.
  • Bath & Body Works stock is currently up nearly 20% versus its YTD low.

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Bath & Body Works Inc (NYSE: BBWI) is trading down in premarket on Tuesday even though it came in ahead of Street estimates for its first financial quarter.

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Bath & Body Works stock slips on muted guidance

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Investors are concerned because the specialty retail firm issued muted guidance for the future. $BBWI now forecasts up to $3.35 of per-share earnings on down 2.5% to flat sales in fiscal 2024.

Last year, those two metrics stood at $3.84 a share and $7.429 billion, respectively. Gina Boswell – the chief executive of Bath & Body Works said in a press release today:

We are excited with success of our product introductions and newness, which drove performance of both our core business and new adjacencies. Our focus on building strong brand awareness and engagement is delivering greater customer retention and loyalty.

In May, the New York listed firm announced 20 cents a share of quarterly dividend. Bath & Body Works stock is up nearly 20% versus its year-to-date low in late January.

Bath & Body Works Q1 earnings snapshot

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  • Earned $87 million versus the year-ago $81 million
  • Per-share earnings also improved from 35 cents to 38 cents
  • Revenue inched down 0.9% year-over-year to $1.38 billion
  • Consensus was 33 cents a share on $1.37 billion in revenue

Bath & Body Works ended its Q1 with $855 million of cash and equivalents. CEO Boswell also said on Tuesday:

With our strong start to the year, I am proud of the way our team is executing on our strategic initiatives, and looking ahead, we remain confident in our ability to deliver long-term profitable growth.

Is $BBWI worth owning in 2024?

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Bath & Body Works failed to impress with its guidance for the current quarter this morning as well.

The $11 billion company based out of Columbus, Ohio forecasts a 2.0% year-on-year hit to its revenue in Q2 on up to 36 cents per share of earnings. Analysts, in comparison, were at a higher 39 cents a share. The outlook “excludes the impact of any future debt repurchase activity”, the earnings report added on Tuesday.

The earnings release arrives shortly after analysts at JPMorgan upgraded $BBWI to “neutral” and raised their price target to $53 which translates to about a 10% upside from here. The investment firm expects the retail company to over $500 million of free cash flow this year which would support its stock repurchase programme.

Note that Bath & Body Works stock does also pay a dividend yield of 1.54% which makes up for another good reason to have it in your portfolio.

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