(Bloomberg) -- Bath & Body Works Inc. shares jumped the most since 2022 after the fragrance retailer raised its profit forecast for the year, citing strong results in the most recent quarter.
The company now expects adjusted earnings per share to be between $3.15 to $3.28, up from previous guidance for a range of $3.06 to $3.26. The market consensus is for $3.23, according to the average estimate of analysts surveyed by Bloomberg.
The shares soared as much as 22% in New York trading Monday, the biggest move since in two years. The stock had declined 29% for the year through Friday’s close, while the S&P Small Cap 600 Index gained 15%.
Chief Executive Officer Gina Boswell credited innovation across the company’s core products and collaborations, along with investment in marketing and technology for the “strong results” in the third quarter. The company, known for its hand soaps and candles, has recently teamed up with Netflix Inc. to release collections tied to shows such as Emily in Paris and Stranger Things.
“We are capitalizing on our agile business model and predominantly US-based supply chain, and we believe we are well-positioned to navigate a volatile retail environment and shorter holiday calendar,” she said in a statement.
Budget-conscious consumers are shopping thoughtfully amid high inflation and economic uncertainty. Analysts say companies that can lure customers with innovative products, value and convenience will be holiday winners.
Bath & Body Works’ results are “particularly pleasing” coming against “a backdrop of constrained discretionary spending by consumers and of heightened competition in the body care and home fragrance spaces,” wrote Neil Saunders, managing director at GlobalData.
Bath & Body Works also narrowed its sales guidance to a decline of 1.7% to 2.5% from a previous outlook for a drop of 2% to 4%.
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