Bath & Body Works’ Q2 Sales Decline; Lowers Sales Forecast for 2023

New Bath & Body Works' CEO Gina Boswell said consumers cut back on spending in the second quarter, leading to a decline in sales. Her assessment was echoed by retailers as diverse as Macy's and Kohl's. Retailers said consumers pulled back due to high inflation and rising interest rates.

BBW's Q2 sales fell 3.6% to $1.56 billion. Those results were in line with Wall Street estimates. Adjusted second quarter earnings per diluted share were 40 cents; that's better than 33 cents expected by analysts. Adjusted gross income was $92 million. For the year, BBW expects sales to fall 1.5-3.5%. The company had predicted sales to be flat or post mid-single gains. 

“As expected, we continue to see some pressure on basket size during the quarter,” said Boswell. “To be clear, we aren’t seeing any trade down in our business, but we’ve observed that the customer is carefully managing their spending against the backdrop of a challenging macroeconomic environment.”

BBW said higher sales of fragrance plug-ins and the launch of men's grooming couldn't offset declines in home fragrances, soaps and sanitizers. Consumers eschewed those products in a post-covid world. Sales of home fragrances, soaps and sanitizers account for more than half of BBW's sales. BBW isn't the only company reporting a decline in home fragrance sales. According to Circana, US mass market sales of candles fell 4.4% to just under $2.0 billion last year.

For more on the home fragrance category, be sure to read the September issue of Happi.

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