Investing.com -- Bath & Body Works, Inc. reported third-quarter earnings that exceeded analyst expectations, driving shares up more than 20% in early Monday trading.
The personal care and home fragrance company posted adjusted earnings per share of $0.49, surpassing the analyst estimate of $0.47. Revenue for the quarter came in at $1.61 billion, beating the consensus estimate of $1.58 billion and representing a 3% YoY increase.
CEO Gina Boswell attributed the strong performance to successful product innovation and investments in marketing and technology. "Our strong results exceeded the high end of our net sales and earnings per diluted share guidance," Boswell stated.
In response to the better-than-expected results, Bath & Body Works (NYSE:BBWI) raised its full-year 2024 guidance. The company now expects net sales to decline between 2.5% and 1.7% compared to fiscal 2023, an improvement from its previous forecast. Full-year adjusted earnings per share are projected to be between $3.15 and $3.28.
For the fourth quarter, Bath & Body Works anticipates net sales to decline between 6.5% and 4.5% YoY, factoring in a 500 basis point headwind due to the shifted fiscal calendar. Fourth quarter earnings per share are expected to range from $1.94 to $2.07.
The company's guidance includes the anticipated impact of $400 million in share repurchases for the full year.
"BBWI reported a much better than expected F3Q this morning, and raised sales and profit expectations for the full year, including the all-important F4Q which typically accounts for ~38% of
sales and 50-60% of profit for the year," noted Raymond (NS:RYMD) James analysts.
"Moreover, with potential impending tariffs on international imports, it bears reminding that BBWI has a predominantly U.S.-based supply chain, a competitive advantage that will become that much more important should tariffs materialize," they added.
Telsey Advisory Group said BBWI delivered "a nice start to the second half of the year." They added that despite a still uncertain macro-operating environment, they "are encouraged by the topline beat and return to growth as innovation in the offering is resonating with the consumer, with momentum building heading into the all-important holiday season."
Bank of America believes BBWI's sales momentum and conservative outlook set the company up well for the important season ahead. "We think BBWI’s product newness and innovation provide a pathway to sales and margin recovery despite a tough consumer backdrop," they wrote.