Argus cuts Bath and Physique Performs to hold, citing on the net pressure, economy

By Liz Moyer

Investing.com — Argus downgraded Bath&ampBody Performs Inc. (NYSE:BBWI) shares to Hold from Receive, citing enhanced pressure from on the net retailers and economic uncertainty.

Shares of the home fragrance, physique care and soap retailer fell two.9% on Friday and are down 18.eight% so far this year.

The analysts stated in a evaluation note on Friday that Bath&ampBody’s shares have underperformed the S&ampP 500 much more than the earlier quarter, falling 16% compared to a .1% decline for the index.

“The mall-mostly primarily based segment of retail — in which BBWI competes — has been beneath increasing pressure from on the net retailers, who are swiftly gaining share,” Argus stated in the note. “Economic uncertainty is also substantially impacting sales, as shoppers remain cautious with their purchases.”

The analysts noted that fiscal year 2023 sales have been down 4% from the prior year, and management projects fiscal year 2024 sales to be flat or down in mid-single digits.

Argus did outline some great developments. Bath&ampBody introduced a loyalty program final August and now has much more than 33 million members. “Management noted loyalty sales at the moment represent about two thirds of total U.S. sales due to the truth launch. The Men’s enterprise continues to create swiftly as the company tests new varieties and merchandising recommendations.”

Mainly primarily based on management guidance and present earnings trends, Argus stated it is lowering its fiscal year 2024 adjusted earnings per share estimate to $two.75 from $3.85, which is at the midpoint of management’s guidance and implies a decline of 19% from fiscal year 2023, the analysts stated. The analysts see improvement in fiscal year 2025, with an estimated adjusted EPS of $3.20.

“We would seem to return this stock to the Receive list as the economy stabilizes and if management can overcome competitors from on the net retailers,” the analysts wrote.

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