Bath & Body Works, the US-based personal care and home fragrance retailer, reported a decline in second-quarter net sales despite year-over-year improvements in operating income and net income, as the company continued to navigate subdued consumer demand.
For the quarter ended 1 August, net sales totaled $1.51 billion, down 2.3% compared with the prior-year period.
Operating income climbed to $216 million from $157 million, while net income rose to $118 million from $64 million.
Diluted earnings per share increased to $0.58 from $0.30, and adjusted earnings per share reached $0.62, up from $0.37 a year earlier.
Chief executive officer Daniel Heaf noted that the quarter exceeded the company’s internal sales and EPS guidance but warned that “underlying business trends remain pressured.”
“We are seeing further evidence that elements of the Consumer First Formula are beginning to work,” Heaf said, highlighting sequential improvement in body care, stronger average unit retail driven by new product innovation, enhanced brand discoverability, and continued momentum in marketplace partnerships.
A notable highlight for the quarter was the return to growth in direct sales, which rose 3% to $275 million in the US and Canada. The increase marked the first year-over-year gain in this channel since 2021, supported by digital investments made over the past 12 months.
Store sales in the US and Canada declined 5.4% to $1.13 billion, while international and other revenue grew 24.9% to $108 million.
Looking ahead, Bath & Body Works raised its full-year 2026 EPS outlook to between $3.13 and $3.33, up from prior guidance of $3.00 to $3.25. The company also lifted its adjusted EPS guidance to $2.60–$2.80, compared with the previous range of $2.40–$2.65.
The retailer narrowed its full-year sales outlook to a decline of between 4% and 2.5%, versus its earlier forecast of a 4.5% to 2.5% decrease.
Free cash flow is now projected to reach approximately $650 million.
For the third quarter, the company anticipates sales to decline between 5% and 2.5%, with adjusted EPS expected in the range of $0.07 to $0.12.
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