Bath & Body Slumps as Outlook Cut Forces Strategic Rethink (1)

Bath & Body Works Inc. shares slumped after cutting its full-year outlook and announcing a turnaround plan to refocus the home products retailer on its core business.

The company’s previous strategy was aligned to drive incremental growth but led to weakness of the brand, as it expended beyond its core business, Chief Executive Officer Daniel Heaf told Bloomberg. That prompted a raft of promotions which eroded returns for the company.

“We sort of became a business that talked about price more than we talked about product,” said Heaf, who took over at the helm in May. “We’re going back to ...