On Wednesday, shares of struggling mall retailer Express Inc. are crashing, down about 12% after the retailer reported disappointing fourth quarter fiscal 2016 financial results, in addition to plans to improve merchandise selection.
Express reported diluted earnings of 29 cents per share, matching the Zacks Consensus Estimate but declining almost 57% year-over-year. Total revenues came in at $678.8 million, missing our consensus estimate of $681 million and decreasing 11% from the prior-year period. Full-year revenues decreased 7% to $2.2 billion.
Comparable sales decreased 13% in the fourth quarter, compared to a 4% increase in the year-ago period. Net income slipped to $22.8 million, compared with $56.1 million in the same period a year earlier. Operating income was $38.8 million, or 5.7% of total revenues. A bright spot for Express, however, was its e-commerce sales, which grew 9% to $170.1 million.
David Kornberg, Express’ president and chief executive officer, noted that, "Despite ongoing pressures in the retail sector, our fourth quarter earnings were in line with previously issued guidance.”
“As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment. As our industry adapts to changing consumer preferences, we continue to invest in our omni-channel and marketing capabilities to ensure that we capitalize on this evolution,” he continued.
Looking ahead, Express expects comparable sales in the negative high single digits for the first quarter of 2017, with diluted EPS between a loss of 4 cents to flat per share. The retailer is also hoping some new initiatives will help spur much needed growth. These include improving “fashion clarity” in stores by lessening the amount of product, a new brand campaign, “compelling” new products, and improving its key existing categories.
Currently, EXPR is a #4 (Sell) on the Zacks Rank, and has lost over 42% in the past one year.
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Here's Why Express (EXPR) Stock Crashed 12% After Earnings
On Wednesday, shares of struggling mall retailer Express Inc. are crashing, down about 12% after the retailer reported disappointing fourth quarter fiscal 2016 financial results, in addition to plans to improve merchandise selection.
Express reported diluted earnings of 29 cents per share, matching the Zacks Consensus Estimate but declining almost 57% year-over-year. Total revenues came in at $678.8 million, missing our consensus estimate of $681 million and decreasing 11% from the prior-year period. Full-year revenues decreased 7% to $2.2 billion.
Comparable sales decreased 13% in the fourth quarter, compared to a 4% increase in the year-ago period. Net income slipped to $22.8 million, compared with $56.1 million in the same period a year earlier. Operating income was $38.8 million, or 5.7% of total revenues. A bright spot for Express, however, was its e-commerce sales, which grew 9% to $170.1 million.
David Kornberg, Express’ president and chief executive officer, noted that, "Despite ongoing pressures in the retail sector, our fourth quarter earnings were in line with previously issued guidance.”
“As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment. As our industry adapts to changing consumer preferences, we continue to invest in our omni-channel and marketing capabilities to ensure that we capitalize on this evolution,” he continued.
Looking ahead, Express expects comparable sales in the negative high single digits for the first quarter of 2017, with diluted EPS between a loss of 4 cents to flat per share. The retailer is also hoping some new initiatives will help spur much needed growth. These include improving “fashion clarity” in stores by lessening the amount of product, a new brand campaign, “compelling” new products, and improving its key existing categories.
Currently, EXPR is a #4 (Sell) on the Zacks Rank, and has lost over 42% in the past one year.
Interested in the other retail news? Listen to Zacks Shopping for Stocks to catch up on the hottest stores influencing the changing retail industry.
Which Stocks are Zacks Experts Talking About?
Stocks in today's headlines may be tempting buys, but how would you like a sneak peek at the stocks Zacks experts recommend? Starting today, for the next month, you can follow all of Zacks' private buys and sells in real time. You can track value and momentum stocks, ETFs, stocks under $10, options moves, insider trades, and stocks set to report positive earnings surprises (we've called them with 80%+ accuracy). Click here for all Zacks trades >>