Bath & Body Works shares dropped by 8.86% yesterday after the beauty and personal care brand announced a lowered 2022 guidance in its first quarter results.
The budget-friendly American brand said the updated fiscal 2022 outlook reflected projected increases in inflationary pressures.
Beyond the overall economic price hike, Bath & Body Works has also made the decision to accelerate investments in information technology and its customer loyalty programme.
“We are accelerating investments in the business to drive our long-term growth, while at the same time, our team continues to successfully navigate the inflationary environment,” said Sarah Nash, Executive Chair and Interim CEO of Bath & Body Works.
“Long-term, we continue to see exceptional opportunities to capitalise on Bath & Body Works’ existing strengths and extend the brand’s global potential.”
Bath & Body Works, despite this, said it delivered better-than-expected sales and earnings results in the quarter.
Reported net sales for the first quarter ended 30 April were US$1.450bn, a decrease of 1% compared with the same period last year.
First quarter operating income was $280m compared with $337.2m in 2021, and net income from continuing operations was $154.9m compared to $90.3m last year.
The company’s first quarter operating income was 19.3% of net sales.
“Our business is very strong, our execution is excellent, and our strategy of delivering affordable luxuries to our customers is more relevant than ever,” added Nash.
“We have built on the past two years of extraordinary growth with strong momentum as we entered fiscal 2022. We are pleased to have delivered better-than-expected sales and earnings results in the quarter.”