Bath & Body Works is preparing for tougher months ahead after posting weaker third-quarter results and lowering its full-year outlook, with CEO Daniel Heaf saying the retailer is moving quickly to reset the business for long-term growth.
For the quarter ended November, net sales fell by 1 per cent to $1.594 billion, down from $1.610 billion a year earlier.
Operating income declined to $161 million from $218 million, while net income dropped to $77 million from $106 million.
“Our third quarter results were below expectations, and we are lowering our outlook for the remainder of the year, reflecting current business trends and continuation of recent macro consumer pressures,” Heaf continued.
“While this is disappointing, we are acting swiftly and decisively to position the business for sustainable, long-term growth.”
The company expects fourth-quarter net sales to fall by high single digits compared with $2.788 billion in the same quarter last year.
Bath & Body Works said its guidance reflects continued weak consumer sentiment and the impact of current tariff rates imposed by the US and other countries.
Heaf said consumers will start to see the benefits of the company’s transformation efforts in the coming quarters, although improvements will take time to show in financial performance.
“While we have significant work ahead, I am confident in Bath & Body Works’ bright future and the immense opportunity in front of us,” he added.
Business analyst Neil Saunders, MD at GlobalData, said the softer results were “disappointing” but not indicative of structural weakness.
“The sales slip is not too terrible in the scheme of things – but it does show that the company is having a hard time driving up its already enormous volumes,” he explained.
He noted that net income falling 27.4 per cent highlights the impact of cost pressures and muted growth.
Saunders said the company is facing two major challenges: consumers pulling back on discretionary spending, and rising competition in candles and home fragrance, particularly from small online-first brands on platforms like TikTok Shop and Amazon.
He added that online sales are under more pressure than stores, but that this also creates an opportunity for the retailer to strengthen its digital presence and fulfilment.
Saunders said the transformation plan unveiled by the company – which focuses on product innovation, cultural moments, distribution opportunities, and becoming a faster, leaner organisation – addresses these issues but will take time to deliver.
“It leaves the final quarter looking somewhat dicey,” he concluded.
