Bath & Body Works (NYSE:BBWI) saw its shares tumble in premarket trading on Thursday, sliding more than 16% after the retailer lowered its full-year guidance and delivered third-quarter results that fell short of Wall Street forecasts.
For Q3, the company posted earnings of $0.35 per share, missing analysts’ expectations of $0.40, while revenue came in at $1.6 billion, slightly under the projected $1.63 billion.
Alongside the earnings release, Bath & Body Works introduced its new Consumer First Formula, a multi-pronged restructuring strategy focused on four key areas: accelerating and modernizing product innovation, reenergizing brand relevance through storytelling and cultural engagement, widening customer reach across digital, in-store, and emerging wholesale channels, and boosting organizational efficiency and speed.
As part of the initiative, the retailer aims to generate $250 million in cost savings over two years, with more than half of that expected to be realized in 2026 to support new growth investments.
“Today, we are excited to announce a comprehensive transformation plan to revitalize Bath & Body Works across brand, product, and marketplace,” said CEO Daniel Heaf.
“Our third quarter results were below expectations, and we are lowering our outlook for the remainder of the year reflecting current business trends and continuation of recent macro consumer pressures.”
The company now expects fourth-quarter 2025 net revenue to decline at a high-single-digit rate from last year’s $2.79 billion, while forecasting Q4 EPS of at least $1.70, well below the $2.18 average analyst estimate. Management pointed to continued weakness in consumer sentiment and ongoing global tariff effects.
The biggest shift came in the full-year outlook: Bath & Body Works now anticipates a low-single-digit drop in 2025 net sales, compared with its prior forecast calling for 1.5% to 2.7% growth. Full-year adjusted EPS is expected to reach $2.87, significantly under the $3.42 consensus estimate.