Bath and Body Works posted stronger-than-expected first-quarter results Wednesday, sending its stock up 14% in premarket trading and offering a rare bright spot in a sluggish retail environment.
The company reported net sales of $1.38 billion for the quarter ending May 2, ahead of the $1.36 billion analysts had anticipated. Adjusted earnings came in at 32 cents per share, topping the 29-cent consensus forecast tracked by Zacks Investment Research, as reported by Yahoo Finance through The Associated Press. On a reported basis, earnings per diluted share were 90 cents, compared with 49 cents a year ago. Net income rose to $183 million from $105 million in the same quarter last year.
Not all of those gains came from operations. The reported figures included an $88 million pretax gain from settlements of payment card interchange fee litigation, a $62 million tax benefit from the resolution of certain tax matters, and aggregate costs of $8 million tied to business transformation activities.
Net sales still declined 3% from $1.42 billion in the year-earlier quarter. The company maintained its full-year 2026 guidance, forecasting net sales to decline between 4.5% and 2.5% from $7.29 billion in fiscal 2025. Bath and Body Works expects full-year adjusted earnings per diluted share of $2.40 to $2.65 and free cash flow of approximately $600 million. The company said no share repurchases or tariff refunds are assumed in the outlook.
CEO Daniel Heaf acknowledged both the strength and the limits of the results. Heaf said in a statement that first-quarter results exceeded guidance but "remain below the standard our brand is capable of delivering." He added that the company expects the impact of its strategic efforts to build through the rest of 2026 and more meaningfully in 2027.
Even with sales declining year over year, shoppers have continued buying the company's candles and body care products. Analysts have described the brand as an affordable luxury play in home fragrance and self-care, a category that has held up relatively well even as consumers pull back elsewhere, according to Reuters. The company expanded its distribution to Amazon earlier this year as part of an effort to reach younger, affluent customers.
The company also disclosed a leadership change Wednesday. CFO Eva Boratto will step down on June 12. Tom Javitch, who has been with the company for more than 16 years, will serve as interim CFO while a permanent replacement is identified. Boratto has been appointed chief financial officer at drug distributor Cencora, according to Reuters.
