What Happened?
Shares of personal care and home fragrance retailer Bath & Body Works (NYSE: BBWI) fell 22.9% in the morning session after the company reported disappointing third-quarter results and provided a weak full-year profit forecast.
The personal care retailer's third-quarter revenue was flat year-on-year at $1.59 billion, missing analyst expectations of $1.63 billion. Its earnings of $0.37 per share also fell short of the consensus estimate of $0.39. Compounding the miss, Bath & Body Works issued full-year earnings per share guidance with a midpoint of $2.83, which was 16.1% below what analysts had been forecasting. The results pointed to ongoing demand headwinds, as the company's same-store sales have been declining over the last two years.
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What Is The Market Telling Us
Bath and Body Works’s shares are very volatile and have had 21 moves greater than 5% over the last year. But moves this big are rare even for Bath and Body Works and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock gained 23% on the news that the company reported a "beat and raised" quarter. Q3 financial results exceeded analysts' revenue and EPS expectations. Guidance was also strong as it raised its Q4 revenue and EPS outlook. The company cited improved momentum with solid contributions from new and existing customers. This is an encouraging signal heading into the important holiday season. Overall, this was a solid quarter.
Bath and Body Works is down 57.9% since the beginning of the year, and at $15.98 per share, it is trading 61.1% below its 52-week high of $41.08 from February 2025. Investors who bought $1,000 worth of Bath and Body Works’s shares 5 years ago would now be looking at an investment worth $399.67.
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