Bath & Body Works raised its annual adjusted profit forecast on Wednesday, citing stronger-than-expected digital sales that offset continued weakness in store traffic. The Columbus, Ohio-based retailer now expects adjusted earnings per share of $2.60 to $2.80 for the full year, up from its prior guidance of $2.40 to $2.65 per share.
The company reported second-quarter net sales of $1.51 billion, narrowly exceeding the $1.50 billion estimate compiled by LSEG. Excluding a $80 million benefit from tariff refunds, adjusted earnings came to 31 cents per share, compared with the 24-cent estimate. Bath & Body Works attributed the outperformance to robust demand for body care and home fragrance products sold through digital channels, which helped counterbalance declining mall traffic and softer in-store sales.
Chief Executive Daniel Heaf acknowledged the challenges in the company's turnaround efforts, noting that early progress has not yet fully offset broader retail weakness. "The progress in its turnaround efforts, because it's early, has yet to offset the changes in the whole business," Heaf said, highlighting declines in store traffic and mall performance. The company is pursuing a strategy focused on product innovation and digital platform enhancements to drive growth.
Bath & Body Works is expanding its distribution beyond its own stores through partnerships with Amazon and Ulta Beauty, targeting younger, affluent consumers. The company also reported that third-quarter net sales are expected to decline between 2.5% and 5%, a smaller drop than the 2.9% decline forecast by analysts. However, adjusted earnings per share for the quarter are projected at just 7 to 12 cents, well below the 26-cent estimate, reflecting ongoing pressure in the retail environment.
The company's updated guidance comes amid mixed signals in the consumer sector. Earlier in the week, cosmetics maker Coty lowered its current-quarter earnings outlook, citing selective spending and elevated oil prices. Bath & Body Works' performance underscores the divergent trends between digital and physical retail channels as younger consumers prioritize smaller, affordable luxuries amid broader economic uncertainty.
