Bath & Body Works may have beat Wall Street expectations on the top and bottom lines, but chief executive officer Daniel Heaf was not satisfied with first-quarter results.
Bath & Body Works’ first-quarter net sales came in at $1.4 billion, down 3 percent from a year earlier, but beat analysts’ expectations of $1.36 billion. Adjusted earnings per diluted share were 32 cents, up from expectations of 29 cents.
Bath & Body Works reaffirmed full-year 2026 guidance of net sales down 4.5 percent to down 2.5 percent, earnings per diluted share of $3 to $3.25, and adjusted earnings per diluted share of $2.40 to $2.65.
It also said that chief financial officer Eva Boratto would step down June 12. Tom Javitch has been appointed interim CFO, effective upon Boratto’s departure, while the company initiates a search process. Javitch has been with Bath & Body Works for more than 16 years and former parent L Brands for 25 years, holding a number of senior finance leadership roles across the organization.
The company’s stock rose by more than 12 percent to $20.03 in midday trading Wednesday on the back of the earnings report.
Still, Heaf believes there’s much more to be done to get the company to where he wants it.
In an interview, he said: “I’m pleased that we exceeded guidance on the top and the bottom lines, but we’re not satisfied with performance here. I’m not here to manage this business quarter by quarter being down less than everyone expected. We’re rebuilding the foundations of this business to deliver sustainable, profitable growth, and everybody in this company is focused on bringing us back to our full potential. So we’re exactly where we expected to be, and yet no one is satisfied.”
He is hoping that his Consumer First Formula strategy, already underway, will turn its fortunes around. The strategy aims to boost innovation in core categories and exit ones like hair and men’s grooming; reignite brand position through more targeted moments and deeper creator advocacy, and acquire new consumers by meeting them where they are, including launching on Amazon and in college book stores.
On Amazon, Heaf is seeing consumers shop differently to in-store. “We are seeing stronger purchasing in men’s, in aromatherapy and in wallflowers, so we’ve seen in some ways some of the things that haven’t performed as well in our stores are performing back to our own Amazon [store]. But we’re still optimizing the assortment and our own channels will always be the place where we offer the broadest assortment. It’s about 7 percent of our total store assortment currently on Amazon, and we’re dialing it up in the places where we’re seeing strength.”
As for his read on consumer behavior, he said: “The consumer continues to be value seeking and intentional. We have not seen any change in our consumer patterns in the first half, or certainly in the first quarter. There’s no doubt that the consumer remains pressured. To pretend otherwise would fall on deaf ears. But what we are seeing is that the categories that we operate in are growing and healthy, and that the consumer is willing to spend on small emotionally rewarding indulgences, where they see clear value, and we sit right at that intersection of affordable indulgence, gifting, and self care. And so I think the consumer is under pressure, but I like where we sit as a category and as a business.”