June 4 Reuters Bath Body Works forecast fullyear profit largely below market estimates on Tuesday and said it expects annual sales to drop, signaling demand for its scented candles and body care products would remain subdued amid sticky inflation.

Shares of the Ohiobased beauty and skincare company fell 8.8 in premarket trading as it also expects secondquarter profit below estimates.

Customers with constrained budgets are still unwilling to spend on expensive nonessential products such as home goods, while they have begun to open their wallets to smaller discretionary items like trendier clothes and accessories.

Results from bigbox retailer Target last month also showed shoppers were delaying their purchases, even as they were spending increasingly on outofhome activities.

The company now expects 2024 net sales to drop 2.5 to flat, compared with its previous forecast of a decline of 3 to flat. Analysts were expecting sales to drop 0.37.

It sees fullyear adjusted earnings per diluted share to be between 3.05 and 3.35, versus a prior projection of 3.00 and 3.35. Analysts were expecting a profit of 3.31 per share, according to LSEG data.

The forecast comes even as Bath Body Works has tried to offer promotions, increased its marketing efforts and introduced newer products to drive more customers to its stores.

The company sees adjusted earnings per diluted share between 31 cents and 36 cents for the second quarter, below expectations of 39 cents.

However, it expects…