Bath & Body Works Inc beat first-quarter profit expectations on Thursday, as higher product prices outweighed cost pressures and a slowdown in demand, sending its shares up over 9% in premarket trading.

Specialty retailers such as Bath & Body Works have selectively raised prices to shield profit margins from spiraling costs associated with transportation, raw materials, labor and supply chain.

But that forced budget-conscious shoppers to tighten their purse strings on non-essential items as fears of a recession mount in the U.S. This was also evident in the recent warnings from home improvement chain Home Depot Inc and big-box retailer Target Corp.

Ohio-based Bath & Body Works saw net sales fall about 4% to $1.40 billion in the quarter ended April 29, but were in line with analysts' average estimate, according to Refinitiv data.

Excluding items, the home fragrance and personal care products maker earned 33 cents per share, topping analysts' expectations of 26 cents.

It reaffirmed its previous projection for annual net sales of flat to a mid-single-digit decline, but raised its forecast for annual earnings from continuing operations per diluted share.

The beauty and skincare firm also expects full-year adjusted earnings per diluted share to be between $2.68 and $3.08, the mid-point of which is slightly below the analysts' estimate of $2.89.

Separately, Bath & Body Works in April had said its finance chief would step down in July or earlier after the company faced a potential challenge from billionaire investor Daniel Loeb's hedge fund Third Point.

(Reporting by Granth Vanaik in Bengaluru; Editing by Shilpi Majumdar)