Bath & Body Works, Inc. (NYSE:BBWI) shares slipped after it reported second-quarter fiscal 2025 net sales of $1.55 billion, up 1.5% from $1.53 billion a year earlier and in line with the $1.55 billion consensus estimate.
Net income was $64 million, or $0.30 per diluted share, compared with $152 million, or $0.68 per share in 2024. Adjusted earnings were $0.37 per share, unchanged from the prior year and in line with analyst expectations.
Operating income was $157 million compared to $183 million a year ago. On an adjusted basis, operating income was $172 million compared to $183 million.
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Adjusted net income was $78 million compared with $83 million last year. Reported results included $15 million in pre-tax leadership transition costs, while the prior-year quarter included a $39 million investment gain and a $44 million tax benefit.
U.S. and Canada store sales rose 4.9% to $1.196 billion. Direct channel sales declined 10.1% to $267 million, and international sales fell 2.9% to $86 million.
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The company operated 1,904 stores at quarter end, up from 1,895 at the start of the year.
For the first half of fiscal 2025, net sales increased 2.2% to $2.97 billion from $2.91 billion a year ago. Net income was $169 million, or $0.79 per diluted share, versus $239 million, or $1.06 per share, last year. Adjusted EPS was $0.86 compared with $0.76 last year.
Cash provided by operating activities was $145 million, compared with $30 million in the prior year. The company ended the quarter with $364 million in cash and $3.89 billion in long-term debt.
"Our team delivered a solid quarter, with revenue and adjusted earnings per share at the high end of our guidance range. Based on our strong first-half results and our confidence in our outlook, we are raising the low end of our full-year adjusted earnings per share guidance range," CEO Daniel Heaf said.
"We are moving with urgency on three no regret moves: elevating the digital experience, amplifying product efficacy, and expanding distribution to meet consumers where they are to unlock opportunities for durable long-term growth," he added.
Outlook:
For fiscal 2025, Bath & Body Works narrowed its sales outlook to $7.42 billion from $7.50 billion, compared with the consensus of $7.47 billion, and projected GAAP EPS of $3.28 to $3.53 versus a $3.46 estimate.
Adjusted EPS guidance was raised to $3.35 to $3.60 from $3.25 to $3.60, compared with the $3.46 analyst estimate.
Free cash flow for fiscal 2025 is expected to range between $750 million and $850 million.
For the third quarter, the company forecasted sales of $1.63 billion to $1.66 billion, versus the consensus estimate of $1.64 billion, and adjusted EPS of $0.37 to $0.45, which fell below the $0.49 estimate. The outlook takes into account the impact of current tariff rates.
Price Action: As of the last check on Thursday, BBWI shares were trading 3.36% lower at $30.48 premarket.
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