What Happened?
Shares of personal care and home fragrance retailer Bath & Body Works (NYSE: BBWI) fell 4.9% in the afternoon session after the company reported weak third-quarter results that missed expectations and lowered its full-year financial guidance, prompting a series of analyst downgrades.
The retailer's net sales for the quarter fell 1% from the previous year to $1.59 billion, while earnings per share dropped to $0.37 from $0.49. Citing weak consumer demand, Bath & Body Works slashed its annual forecast, now expecting a low single-digit decline in net sales, a sharp reversal from its prior projection of growth. The company also cut its full-year earnings per share guidance. In response to the disappointing results and outlook, analysts moved to lower their ratings. Goldman Sachs and Telsey both downgraded the stock, and B of A Securities cut its price target, all reflecting concerns about the company's path to recovery.
The shares closed the day at $14.85, down 6.1% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bath and Body Works? Access our full analysis report here.
What Is The Market Telling Us
Bath and Body Works’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 22.9% on the news that 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.
Bath and Body Works is down 60.8% since the beginning of the year, and at $14.85 per share, it is trading 63.9% 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 $371.31.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free for active Edge members and will only take you a second.
