Bath & Body Works Cuts Annual Sales Forecast on Weak Demand | kbnmart

Bath & Body Works Inc. on Wednesday cut its annual sales forecast, citing weak demand for its high-priced products such as perfumes and scented candles in the face of high inflation.

Consumers, struggling with rising costs of living, remain cautious about spending on big-ticket discretionary items ranging from electronics and clothing to household goods, and are instead prioritizing shopping for essential products like groceries and medicine.

Although the Ohio-based company has stepped up its promotional campaign and launched new fragrances and grooming products in the men’s category, its sales have been affected in its core markets of the United States and Canada.

Bath & Body Works expects its net sales in 2024 to decline by 2% to 4%, compared to its previous forecast of a decline of 2.5% to a flat level.

The company expects adjusted annual net income to be between $3.06 and $3.26 per share, compared with $3.05 and $3.35 per share in a previous forecast.

Major retailers like Estee Lauder andOpens a new tab Elf Beauty has also been affected by cautious consumer spending on luxury beauty products and “affordable luxuries” like lipstick and perfume.

Bath & Body Works’ direct sales in the U.S. and Canada fell 9.7% in the second quarter, compared with a 6.8% decline in the prior three months.

Net sales came in at $1.53 billion, compared with analysts’ average estimate of $1.54 billion, according to LSEG data.

However, its adjusted earnings of 37 cents a share for the quarter ended Aug. 3 beat analysts’ estimates of 36 cents, helped by cost-cutting measures and a reduction in transportation expenses.