(Reuters) -Bath & Body Works ( BBWI ) forecast a surprise sales decline for the crucial holiday quarter on Thursday, warning of weak demand for its scented candles and fragrances among cash-strapped shoppers and sending its shares down nearly 14% in premarket trading.

The retailer, whose shares have lost 46% of their value so far this year, also slashed its annual sales and profit forecast and missed market estimates for the third quarter.

It also launched a transformation plan under which it will deliver $250 million in cost savings over the next two years, with over half of them in 2026.

The dour outlook comes at a time when shoppers in the U.S. are cautious of the Trump administration's ever-changing tariff policies, which has put shopping budgets under pressure, and weakened demand for discretionary items even in an otherwise busy holiday season.

The Ohio-based company expects its fourth-quarter net sales to be down in high single digit from $2.79 billion it reported a year earlier, weighed down by cash-strapped consumers' preference for cheaper alternatives over the retailer's higher-priced home and personal care products.

Analysts on average were expecting a 1.5% rise in sales, according to data compiled by LSEG.

Although insulated from direct impact of tariffs, thanks to its domestic sourcing, the firm has been pressured by mounting marketing and promotional costs to attract customers in a challenging macro-economic environment.

It now expects 2025 net sales to decline by low single digit, compared with its prior forecast of growth between 1.5% and 2.7%. It slashed its fiscal 2025 earnings per share forecast to at least $2.87, from the company's previous range of $3.35 to $3.60.

Bath & Body Works ( BBWI ) posted a profit of 35 cents per share on an adjusted basis for the quarter ended November 1, missing analysts' average estimate of 39 cents.

Its quarterly sales fell 1% to $1.59 billion from a year ago, below analysts' estimates of $1.63 billion.