Bath & Body Works (NYSE:BBWI) reported second-quarter earnings significantly above Wall Street expectations and raised its full-year profit guidance, although a weaker-than-expected third-quarter earnings forecast highlighted continued pressure on the underlying business.
The company posted second-quarter earnings of $0.62 per share, comfortably exceeding the analyst consensus estimate of $0.24.
Revenue reached $1.5 billion, broadly matching market expectations but declining 2.3% from the same quarter last year.
Consumer First strategy shows early signs of progress
Management said the quarterly performance exceeded the company’s own expectations for both sales and earnings, despite continued challenges across the wider business.
“Our second-quarter results exceeded our sales and earnings per share guidance. Underlying business trends remain pressured, but we are seeing further evidence that elements of the Consumer First Formula are beginning to work,” said CEO Daniel Heaf.
Bath & Body Works has been investing in initiatives designed to improve the customer experience and strengthen engagement across its sales channels.
“Additionally, this quarter marks the first direct net sales growth since 2021. The investments we’ve made over the past year are strengthening the customer proposition through a more seamless and engaging shopping experience, and these improvements are resonating with consumers,” he added.
Third-quarter earnings guidance misses expectations
Despite the second-quarter earnings beat, Bath & Body Works issued a cautious outlook for the third quarter of 2026.
The retailer expects net sales to decline between 2.5% and 5% compared with the $1.59 billion generated in the same period last year.
Adjusted diluted earnings are forecast at between $0.07 and $0.12 per share, substantially below the consensus estimate of $0.26.
The guidance indicates that near-term trading conditions remain challenging even as some of the company’s strategic initiatives begin to deliver improvements.
Bath & Body Works raises full-year EPS forecast
For the full 2026 fiscal year, Bath & Body Works narrowed its sales outlook and increased its earnings expectations.
The company now forecasts annual net sales to decline between 2.5% and 4% compared with fiscal 2025 revenue of $7.291 billion.
Full-year earnings per share are expected to reach between $2.60 and $2.80, up from the previous guidance range of $2.40 to $2.65.
The revised range also places the midpoint above the current analyst consensus estimate of $2.65, reflecting the stronger-than-anticipated profitability delivered during the second quarter.
While the improved annual earnings outlook provides evidence of progress, the softer third-quarter forecast suggests Bath & Body Works still faces pressure on sales and will need further gains from its Consumer First strategy to support a more sustained recovery.
Bath & Body Works stock price
