Global Finance News
27 May 2026, 16:50
BBWI fell 12% today after Bath & Body Works reported first-quarter 2026 earnings that exceeded guidance but reinforced investor concerns about slowing sales growth, weak forward outlooks and ongoing uncertainty surrounding the retailer’s turnaround strategy.
The company posted first-quarter net sales of $1.38 billion, down 3% year over year, while reaffirming its full-year forecast for revenue to decline between 4.5% and 2.5%. Management also projected second-quarter sales to fall another 3% to 5%, signaling that demand pressures are expected to persist through much of 2026.
Although reported earnings per diluted share rose to $0.90 from $0.49 a year earlier, much of the improvement came from one-time items, including an $88 million pre-tax litigation settlement gain and a $62 million tax benefit. Excluding special items, adjusted EPS came in at just $0.32, reflecting ongoing pressure on the core business.
CEO Daniel Heaf acknowledged that while results exceeded guidance, performance still remains “below the standard our brand is capable of delivering.” The company said its “Consumer First Formula” turnaround plan is beginning to generate early positive signs through investments in hero product categories, brand modernization and customer engagement initiatives, but management made clear that meaningful improvement is expected to build gradually into 2027 rather than immediately.
Investors also appeared unsettled by the sudden departure of Chief Financial Officer Eva Boratto, who will step down in June. The company announced an interim CFO appointment while conducting a broader executive search, creating additional uncertainty at a time when Bath & Body Works is already navigating slowing sales and shifting consumer demand trends.
The market reaction suggests investors were hoping for stronger evidence of stabilization and a more optimistic near-term outlook. While Bath & Body Works maintained full-year earnings guidance and continues to generate solid cash flow, the retailer still faces a difficult environment marked by cautious consumer spending, promotional competition and pressure on discretionary retail categories.
The sharp selloff indicates investors remain skeptical that the company’s turnaround efforts will produce a meaningful acceleration in growth anytime soon, despite management’s confidence in the longer-term recovery strategy.
The company posted first-quarter net sales of $1.38 billion, down 3% year over year, while reaffirming its full-year forecast for revenue to decline between 4.5% and 2.5%. Management also projected second-quarter sales to fall another 3% to 5%, signaling that demand pressures are expected to persist through much of 2026.
Although reported earnings per diluted share rose to $0.90 from $0.49 a year earlier, much of the improvement came from one-time items, including an $88 million pre-tax litigation settlement gain and a $62 million tax benefit. Excluding special items, adjusted EPS came in at just $0.32, reflecting ongoing pressure on the core business.
CEO Daniel Heaf acknowledged that while results exceeded guidance, performance still remains “below the standard our brand is capable of delivering.” The company said its “Consumer First Formula” turnaround plan is beginning to generate early positive signs through investments in hero product categories, brand modernization and customer engagement initiatives, but management made clear that meaningful improvement is expected to build gradually into 2027 rather than immediately.
Investors also appeared unsettled by the sudden departure of Chief Financial Officer Eva Boratto, who will step down in June. The company announced an interim CFO appointment while conducting a broader executive search, creating additional uncertainty at a time when Bath & Body Works is already navigating slowing sales and shifting consumer demand trends.
The market reaction suggests investors were hoping for stronger evidence of stabilization and a more optimistic near-term outlook. While Bath & Body Works maintained full-year earnings guidance and continues to generate solid cash flow, the retailer still faces a difficult environment marked by cautious consumer spending, promotional competition and pressure on discretionary retail categories.
The sharp selloff indicates investors remain skeptical that the company’s turnaround efforts will produce a meaningful acceleration in growth anytime soon, despite management’s confidence in the longer-term recovery strategy.
