Bath & Body Works’ sales returned to positive growth in the third quarter after a streak of decline despite continued challenges from soft demand and heightened competition.
The company’s net sales rose 3 per cent year-on-year to $1.61 billion, which exceeded management’s expectations. Sales at physical stores and online increased 4.4 per cent and 1.5 per cent, respectively.
GlobalData MD Neil Saunders said the results are pleasing as they were delivered against a backdrop of constrained discretionary spending by consumers and heightened competition in the body care and home fragrance spaces.
“One of the areas where Bath & Body Works has excelled is in trying to reinvigorate its core product categories,” he continued. “There has been a significant amount of innovation around scents, product design, and in-store displays to capture consumer imaginations and drive volume.”
The brand was also conscious of the need to promote value, which it has done via smaller sized products and refills which help consumers save money, the analyst said.
On the bottom line, operating income edged down from $221 million last year to $218 million, and net income fell from $119 million to $106 million.
The company has raised its full-year outlook, expecting net sales to range between a decline of 2.5 per cent to a decline of 1.7 per cent. The 53rd week in FY23 represents a headwind of approximately 100 basis points to net sales change in this fiscal year.
