Bath & Body Works Narrows Guidance Amid Turnaround Push

Bath & Body Works Inc. expects full-year sales to decline slightly less that it previously did, a sign that attempts to revive growth and turn around its business might be gaining traction.

The Columbus, Ohio-based company now expects net sales to decline between 4% and 2.5% this year, compared with the 4.5% to 2.5% it saw previously. Second-quarter revenue was $1.51 billion. That’s ahead of consensus expectations of $1.5 billion.

The personal care and fragrance retailer has been trying to turn around its business over the past few years, as the mall staple known for its scented candles, lotions and soaps has fallen out of favor with consumers. It kicked off a transformation push late last year, though the company said Wednesday it expects the plan to have more of an impact in the second half of this year and into early 2027.

“We remain in the early stages of the transformation,” Chief Executive Officer Daniel Heaf said in a statement. “Our priority remains improving the trajectory of the business while continuing to build the product, brand and marketplace capabilities that we believe will position Bath & Body Works for sustainable, durable growth in 2027.”

Bath & Body Works expects sales in the current quarter to decline between 5% and 2.5% from $1.59 billion a year earlier. That implies persistent, if not worse, sales declines in the second half of this year than in the first, Bloomberg Intelligence analyst Lindsay Dutch wrote in a post-earnings note, even though the second half of the year is typically stronger thanks to holiday shopping.

“Though guidance could be conservative, as it’s been for the past three quarters, demand appears challenged heading into the pivotal holiday season,” she wrote, adding that the company may need to use more discounts than normal to woo shoppers.

Bath & Body Works is also trying to launch new products to win back shoppers that have turned to higher-end personal care products and trendier retailers like Sephora over the past few years.

On Monday, the company announced the launch of a new “Reserve Collection” of higher-priced home fragrances and decor as part of its efforts to expand from a specialty retailer to a larger brand selling a wider variety of products.

But the new, more expensive items may not help the company win back shoppers, since they don’t match the cheaper lotions and candles it’s historically known for, Dutch said in a note following the announcement. “The new collection also doesn’t support the company’s effort to draw younger, beauty-focused consumers, suggesting that push has yet to fuel growth,” she wrote.

In June, the company announced a partnership with Ulta Beauty to sell some of its products in Ulta stores and on its website, while starting to sell on Amazon.com earlier this year. Bath & Body Works is also trying to become an e-commerce player in its own right as foot traffic to malls continues to decline — it said Wednesday that non-store sales in the US and Canada grew 3% from a year earlier to $275 million, the biggest increase since 2021.