Bath & Body Works shares fell in after-hours trading Wednesday after the retailer cut its profit outlook for the year, in part due to expected increases in inflationary pressures.
The stock fell more than 5% after hours, following an 8.6% decline during the trading day, amid a broader market selloff.
The company said in prepared remarks that it has been facing higher costs of raw materials, transportation and wages — like many retailers. Bath & Body Works now expects to take a hit of between $225 million and $250 million from inflation this fiscal year, or about $75 million more than originally planned.
The comments come after big-box retailers Target and Walmart both reported this week that these kinds of expenses ate into their profits in the first quarter, thereby denting their guidance for the coming months.
Bath & Body Works, which sells lotions, candles and other bath soaps, is forecasting its fiscal 2022 earnings from continuing operations per diluted share to be between $3.80 and $4.15, compared with a prior range of $4.30 to $4.70.
Its second-quarter earnings per share are expected to be between 60 cents and 65 cents, compared with 77 cents a year earlier.
For the three-month period ended April 30, Bath & Body Works reported net income of $154.9 million, or 64 cents per share, compared with income of $276.6 million, or 97 cents per share, a year earlier.
That topped analysts’ estimates for 53 cents a share, according to a Refinitiv survey.
Sales fell slightly to $1.45 billion from $1.47 billion a year earlier. But revenue beat expectations for $1.43 billion.
Bath & Body Works shares are down about 39% this year.
Find the full earnings press release here.