Bath & Body Works has officially announced a year-over-year decline in fiscal fourth-quarter sales, setting the stage for expectations of an earnings decline in the upcoming year. The company's revenue decreased to $2.79 billion for the three months ending February 1, compared to $2.91 billion from the same period last year.
Despite this decline, the figures slightly exceeded the average analyst estimate of $2.78 billion, as reported by FactSet. Chief Executive Gina Boswell expressed optimism during a recent conference call with analysts, stating, "While we continue to see value-seeking customer behavior and competitive intensity, we closed out the year strong," noting that net sales were above the high end of management's guidance. In further elaboration, Chief Financial Officer Eva Boratto underscored that the sales growth was primarily driven by volume.
"Despite complex challenges facing the broader retail sector, we ended the second half of the year strong," Boswell stated in her remarks. The management has set its sights on the fiscal year 2025, showcasing excitement and a commitment to building on their momentum. Looking ahead to 2025, Bath & Body Works is guiding for a sales growth trajectory between 1% to 3%, following 2024’s revenue of $7.31 billion, which already indicated a 1.6% decline year-over-year.
The company has established a GAAP EPS guidance range between $3.25 and $3.60, contrasted with the $3.61 reported in the previous year ending on February 1. Analysts surveyed by FactSet are predicting revenues of $7.52 billion alongside a GAAP EPS of $3.64 for the active fiscal year. In its most recent trading session, shares of Bath & Body Works plummeted by 11%.
For the upcoming first quarter, management anticipates a modest sales growth between 1% to 3%. Additionally, earnings per share guidance is projected in the range of $0.36 to $0.43, in comparison to last year’s first quarter figure of $0.38. Analysts are estimating revenue of $1.42 billion and an EPS of $0.44 for the current quarter. Notably, the guidance issued reflects the repercussions of import tariffs on China, which constitutes roughly 10% of Bath & Body Works' supply chain.
Boratto specified, "We have not included other potential tariff impacts in our guidance due to the current uncertainty." This cautious approach indicates that while the company is preparing for growth, it remains vigilant about external economic factors that could influence its performance this year..