BBWI Stock Forecast & Price Target

Bath & Body Works has narrowed its annual sales guidance for fiscal 2024, now expecting an increase of 1.5% to 2.7% year-over-year, reflecting steady performance amidst consumer shopping normalization. For the third quarter, the company anticipates sales growth between 1% and 3% year-over-year, indicating resilience despite previous forecasts. Additionally, a significant 33% year-over-year increase in buy online, pick up in store (BOPIS) demand highlights the effectiveness of their omnichannel strategy and suggests positive momentum in customer engagement and sales channels.

Bath & Body Works experienced a significant decline in direct revenues, plummeting 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 body care segment weakened, showing low single-digit declines, primarily influenced by underperformance during Mother's Day, although there was some offset from growth in the men's product category. Additionally, an earnings miss was reported due to greater operating deleverage than anticipated, despite a modest improvement in gross margins, indicating underlying challenges in maintaining profitability amid declining sales.