Bath and body careThe stock jumped more than 10% in premarket trading on Thursday after beating fiscal first-quarter earnings expectations and raising its forecast.
While sales and net income have fallen year over year, the retailer now expects full-year 2023 earnings per share to be between $2.70 and $3.10, compared to the range of $2.50 to $3.00 given in the previous quarter. He expects adjusted earnings per share to be between $2.68 and $3.08 for the year.
The longtime mall store, known for its lotions, hand sanitizers and soaps, attributed the more optimistic forecast to “better than expected” profits and the impact of an early debt repayment. in the first trimester.
“We achieved first quarter sales in line with our expectations while our EPS was better than expected as we saw the benefits of our work to improve the merchandise margin as well as the early benefits of our cost optimization initiatives. “CEO Gina Boswell said in a statement.
The company’s 2023 fiscal year will include a 53rd week and its outlook includes that extra week, which it says will impact earnings by 7 cents per share, the company added.
Here’s how Bath and Body Works fared in its first fiscal quarter compared to what Wall Street expected, based on a Refinitiv analyst survey:
- Earnings per share: 33 cents adjusted vs. 26 cents expected
- Revenue: $1.40 billion vs. $1.40 billion expected
The company’s net profit for the three months ended April 29 was $81 million, or 35 cents per share, about half of the reported $155 million, or 64 cents per share. in the quarter of the previous year.
Sales fell to $1.40 billion, down 4% from $1.45 billion a year earlier.
The retailer expects earnings per share of 27 to 32 cents in the next quarter, against an estimate of 32 cents per share. He expects sales to decline in the lower to mid-single digits, compared to an estimate down 3%.
It reaffirmed its full-year sales guidance of flat net sales at a mid-single-digit decline.
As consumers become more cautious and retail discounts and promotions increase in a difficult macroeconomic environment, Bath and Body Works margins have fallen. They fell about three and a half percentage points to 42.7% from 46.1% in the year-ago quarter.
It’s unclear why margins fell, but they were 41.2% better than analysts had expected, according to a research note from Simeon Siegel, retail analyst for BMO Capital Markets. Margins also exceeded pre-Covid levels, Siegel noted.
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