Bath & Body Works' (BBWI) underlying sales trends were pressured through July, setting up for relatively in-line Q2 earnings per share, UBS Securities said.
The company is scheduled to report its Q2 results before the market opens Aug. 26.
UBS said in a Tuesday note that it expects the company to reiterate its fiscal 2026 earnings guidance of $2.40 to $2.65 per share. It said that data points are consistent with conversations with investors, indicating that sentiment around the stock has weakened recently and is now mixed.
UBS's evidence lab and industry data point to soft Q2 and Q3-to-date trends, with US store sales growth expected to be around mid-single-digit declines in Q2 and double-digit declines in Q3-to-date.
The investment firm expects Q3 earnings per share of $0.25 to $0.30 and sales growth in the low-single-digit percentage decline range year over year, bracketing the Street's $0.26 EPS view.
Analysts said, however, that Bath & Body Works will drive long-term growth, primarily related to wholesale channel expansion and ongoing product innovation.
UBS has a neutral rating and a $19 price target on the stock.
Price: $20.00, Change: $-0.04, Percent Change: -0.20%