Bath & Body Works cut its annual sales forecast on Wednesday, a sign of weaker demand for its pricey products such as fragrances and scented candles in the face of still-high inflation.

Consumers, grappling with rising costs of living, are still cautious on spending on expensive discretionary items ranging from electronics and apparel to home goods and instead prioritizing shopping for essential products such as groceries and medicines.

While the Ohio-based company ramped up promotion and launched new fragrance and personal care products in men’s categories, its sales were impacted in core markets of the United States and Canada.

Bath & Body Works expects 2024 net sales to decline between 2% and 4%, compared with its prior forecast of a fall of 2.5% to flat.

It projects annual adjusted profit to be between $3.06 and $3.26 per share, compared with the $3.05 and $3.35 per share forecast earlier.

Larger retailers Estee Lauder and, opens new tab Elf Beauty were also hurt by cautious consumer spending for their premium beauty products and “affordable luxuries” such as lipsticks and perfumes.

Direct sales in Bath & Body Works’ U.S. and Canada were together down 9.7% for the second quarter, compared with the 6.8% decline in the preceding three months.

Net sales of $1.53 billion compared with analysts’ average estimate of $1.54 billion, according to LSEG data.

Its adjusted profit of 37 cents per share for the quarter ended Aug. 3, however, edged past analysts’ estimate of 36 cents, helped by its cost-reduction measures and easing transportation expenses.