Shares of Bath & Body Works Inc. fell 8% early Thursday after the soap and perfume retailer said it expects earnings to decline in fiscal 2024, overshadowing its fourth-quarter numbers quarter better than expected.
Columbus, Ohio-based Bath & Body Works, which spun out of Victoria’s Secret in August 2021, reported net income of $579 million, or $2.55 per share, for the quarter, compared with $434 million dollars, or $1.89 per share, in the previous quarter. period of the previous year.
The earnings result included a tax benefit of $112 million from the partial release of a valuation allowance on a foreign deferred tax asset, a pre-tax impairment charge of $8 million, and a gain of $6 million. million dollars before taxes on early repayment of debt.
Excluding these items, adjusted EPS was $2.06, higher than the FactSet consensus of $1.88.
Sales rose to $2.912 billion from $2.889 billion a year ago, also beating the FactSet consensus of $2.840 billion.
Chief Executive Officer Gina Boswell said sales and earnings were above the high end of the company’s expectations and were supported by strong holiday performance.
Read also: Victoria’s Secret shares had their best day in 2 years as sales continue to improve
The company now expects sales for fiscal 2024 to range from a decline of 3% to a stable level. Adjusted EPS is expected to range between $3.00 and $3.35.
The FactSet consensus implies sales growth of about 8% and EPS is forecast at $3.36.
The 53rd week of 2023, which will not be repeated in 2024, represents a headwind of about 100 basis points to sales growth, the company said.
For the first quarter, the company expects sales to decline 4.5% to 2.0% and EPS to range from 28 cents to 33 cents, down from 35 cents a year ago. The FactSet consensus implies a sales decline of just 1.1% and EPS is forecast at 39 cents.
The company’s board of directors has approved a new shareholder buyback program of up to $500 million.
The stock has gained 18% over the past 12 months, while the S&P 500 SPX,
it gained 27.7%.