Bath & Body Works, Inc.

Good morning. My name is Danielle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Bath & Body Works third quarter 2022 earnings conference call. Please be advised that today's conference is being recorded. During the question and answer portion, you may ask a question from the phone by pressing star 1. I will now turn the call over to Ms. Wendy Arlen, Chief Financial Officer at Bath & Body Works. Wendy, you may begin.

Thank you, Danielle. Good morning, and welcome to Bath & Body Works' third quarter earnings conference call for the period ended October 29th, 2022. As a matter of formality, any forward-looking statements we may make today are subject to our safe harbor statement found in our SEC filings and in our press releases. Joining me on the call today are Executive Chair of the Board and Interim CEO, Sarah Nash, and Brand President, Julie Rosen. All of the results we discussed today are adjusted and exclude the charges related to the early extinguishment of debt in 2021. Additionally, the results represent results from continuing operations and exclude the discontinued operations related to Victoria's Secret. I will now turn the call over to Sarah.

Thanks, Wendy. And thank you, everyone, for joining the call today. Let's start with our third quarter results. We are pleased to have delivered EPS of 40 cents, double the high end of our guidance range. Given these strong bottom line results, we are raising our full year EPS guidance to $3.20 from our prior guidance range of $2.70 to $3.00. Our sales for the quarter were at the high end of our expectations. and reflected our team's closeness to our customer, our focus on innovation and newness, and our success in leveraging our vertically integrated supply chain to chase key winners. Our nationwide launch of our loyalty program has been a great success. We achieved industry-leading speed in customer adoption in our program, with over 21 million members enrolled to date. Loyalty members now make up more than a third of our overall customer base and loyalty sales represent about two-thirds of our total U.S. sales since launch. We are excited about the potential of this program as our loyalty customers spend more, visit us more, and have significantly higher retention rates than those not in the program. We continue to take rigorous actions to improve profitability, including proactively revisiting our promotions and pricing plans, as well as product costing to improve merchandise margins. Additionally, we are actively working with our vendor base to streamline operations to combat inflationary pressures and improve product cost without compromising our focus on quality. We have also implemented several expense reduction actions during the quarter, including optimization of corporate overhead and store selling expenses. We will continue our focus in this area given the challenging business environment. Before I turn it back to Wendy, I'd like to share my perspective on our recent CEO announcement and the company's overall positioning. Our board was very thoughtful as we conducted the search for our next CEO. We were delighted that we found in Gina the global omni-channel personal care company leader that we were looking for. Gina brings more than 30 years of experience including leadership roles at global companies such as Unilever, Alberto Culver Company, and the Estee Lauder Company. She has deep expertise in sales, marketing, brand building, and business development and strategy, along with strong operational experience and a demonstrated track record of delivering successful business outcomes. The board is confident Gina is the right leader to drive the company's next chapter of growth across our channels and categories globally while delivering enhanced value for shareholders. During my time as interim CEO, I have been impressed by the talent and dedication of the Bath & Body Works team. I'd like to thank the company's management team, and all our associates for their commitment to driving innovation and agility and to enhancing our customers' experience. I am confident that Bath & Body Works will continue to capitalize on our tremendous potential to expand our brand globally. Wendy? Thank you, Sarah.