Bath & Body Works Inc (NYSE:BBWI) shares are trading lower in premarket on Thursday after the fourth-quarter earnings.

The company reported a fourth-quarter sales decline of 4.3% year-on-year to $2.788 billion, beating the analyst consensus estimate of $2.777 billion.

Fourth quarter net sales incurred a headwind of approximately 500 basis points due to the shifted fiscal calendar, resulting from and including the extra week in 2023.

Gross profit decreased 2.7% to $1.3 billion with a margin of 46.6%. The operating margin was 24.3%, and operating income for the quarter declined 2.6% to $678 million.

Adjusted EPS of $2.09 beat the consensus estimate of $2.05.

Bath & Body Works held $674 million in cash and equivalents as of February 1, 2025. At the end of the fourth quarter, inventories increased 3.4% Y/Y to $734 million.

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The operating cash flow for the twelve months totaled $886 million. Bath & Body Works' debt leverage ratio for the year was 2.5.

The Board of Directors approved a new share repurchase program authorizing the company to repurchase up to $500 million of shares.

The approval replaces the approximately $120 million remaining authority under the January 2024 program.

“Despite complex challenges facing the broader retail sector, we ended the second half of the year strong. As we enter 2025, we have a lot to be excited about, and we are eager to build on our momentum,” said CEO Gina Boswell.

Outlook: Bath & Body Works sees FY25 EPS of $3.25 – $3.60 with an estimate of $3.60. The company expects net sales growth of 1% – 3%.

The company sees first-quarter EPS of $0.36 – $0.43 against an estimate of $0.44, and expects net sales growth of 1% – 3%.

Price Action: BBWI shares are trading lower by 8.96% at $37.40 in premarket at last check Thursday.

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