BBWI Stock Forecast & Price Target

Bath & Body Works has narrowed its annual sales guidance for fiscal 2024, now projecting an increase of 1.5% to 2.7% year-over-year, which reflects a positive adjustment in its financial outlook. The company anticipates third-quarter sales growth between 1% and 3% year-over-year, indicating a steady performance amid evolving consumer shopping patterns. The continued strength of its brick-and-mortar operations, complemented by plans for store upgrades and expansion into digital and international markets, supports a favorable growth trajectory.

Bath & Body Works experienced a significant decline in direct revenues, which fell 10.1% year-over-year in the second quarter to $267 million, following a 4.2% decrease in the previous quarter and a 9.7% decline in the same period last year. The company's body care segment showed weakness, with low single-digit declines attributed to a lackluster Mother's Day performance, although there was some growth in the men's category during Father's Day. Additionally, the earnings miss was exacerbated by greater-than-expected operating deleverage, despite a modestly better gross margin, indicating ongoing challenges in overall profitability.