Bath & Body Works implemented layoffs in the most recent quarter as it looks to save costs against an uncertain economic backdrop.
Reporting its second-quarter earnings, the company revealed that it had eliminated about 130 roles, the majority of which were leadership positions as it pursues “a number of initiatives to improve financial performance and better position the organization for long-term growth.”
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“These initiatives include organizational changes, additional cost-control actions and merchandise margin improvement opportunities,” it said in a release accompanying earnings, adding that together these actions are expected to result in estimated savings of approximately $30 million in the second half of 2022, prior to any impact from severance.
This came as the company reported net sales of about $1.618 billion for the second quarter ended July 30, down 5 percent from a year earlier, but narrowly beating analysts’ estimates of $1.615 billion.
Earnings from continuing operations per diluted share were 52 cents, compared to 77 cents for the same period in 2021. This also beat estimates of 44 cents. Operating income was $241.8 million, compared to $384.2 million last year, and net income from continuing operations was $120 million, down from $215.3 million.
Sarah Nash, executive chair and interim chief executive officer, said, “Our results in the second quarter were better than our most recent expectations, reflecting improvement in sales toward the end of the quarter as customers responded to newness in our assortment as well as favorability in expenses. The business continues to perform at levels significantly above pre-pandemic and our team is effectively navigating the challenging environment and inflationary pressure affecting our customers and our business.”
The company is forecasting third-quarter earnings from continuing operations per diluted share of between 10 cents and 20 cents. For fiscal 2022, the company is forecasting earnings from continuing operations per diluted share of between $2.70 and $3.
In August 2021, the former L Brands split into two companies — Victoria’s Secret and Bath & Body Works — and each company began trading individually on the New York Stock Exchange. The latter is still searching for a permanent CEO after Andrew M. Meslow’s departure due to health reasons.