Bath & Body Works Q1 earnings: revenue slides 0.9%

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.

Bath & Body Works stock slips on muted guidance

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:

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

• 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:

Is $BBWI worth owning in 2024?

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.