On Wednesday, mall retailer Express Inc. reported its second quarter fiscal 2016 results. Earnings per share came in at 13 cents, falling short of the Zacks Estimate of 17 cents per share and declining 48% year-over-year. Net sales decreased 6% to $504.8 million, missing our consensus estimate of $524.8 million.
EXPR has plummeted as a result of the company’s weak quarterly performance, down over 25% in mid-morning trading.
Results
Comparable sales, including e-commerce sales, declined 8%, compared to an increase of 7% in the second quarter of 2015. Express reported that merchandise margin fell by 200 basis points, driven by increased markdowns on clearance items as inventory for the upcoming fall season became a main focus.
Operating income was $17.0 million, or 3.5% of its net sales. Net income was $10.1 million.
“I am disappointed with our second quarter performance as sales and earnings were below our guidance, reflecting challenging store traffic,” said President and CEO David Kornberg. “This was compounded by a lack of clarity across the assortment. We believe we have identified the necessary actions to position Express to regain momentum and we are moving on them.
“Our fall assortment is more cohesive across our wearing occasions, clearly identifying the important trends, and we are aggressively pursuing several marketing initiatives focused on driving new customer acquisition and retention,” he continued.
Looking Ahead
Express again cut its profit forecast for the full year. The company now expects adjusted earnings of $1 to $1.14 per share, well below its previous guidance for $1.41 to $1.51 per share.
For the current quarter, Express forecasts earnings between 9 cents to 15 cents per share, a sharp decline from analysts’ previous projections of 32 cents per share. Same-store sales are expected to decrease in the high-single to low-double digits.
As Express and other retailers head into their next quarter, as well as the looming, all-important holiday quarter, they will need smart and innovative strategies for getting customers to their stores. However, these tactics should stay away from continuous sales that negatively impact the brand’s image and reputation.
EXPR has fallen over 7% year-to-date, and sits at a #3 (Hold) on the Zacks Rank.
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On Wednesday, mall retailer Express Inc. reported its second quarter fiscal 2016 results. Earnings per share came in at 13 cents, falling short of the Zacks Estimate of 17 cents per share and declining 48% year-over-year. Net sales decreased 6% to $504.8 million, missing our consensus estimate of $524.8 million.
EXPR has plummeted as a result of the company’s weak quarterly performance, down over 25% in mid-morning trading.
Results
Comparable sales, including e-commerce sales, declined 8%, compared to an increase of 7% in the second quarter of 2015. Express reported that merchandise margin fell by 200 basis points, driven by increased markdowns on clearance items as inventory for the upcoming fall season became a main focus.
Operating income was $17.0 million, or 3.5% of its net sales. Net income was $10.1 million.
“I am disappointed with our second quarter performance as sales and earnings were below our guidance, reflecting challenging store traffic,” said President and CEO David Kornberg. “This was compounded by a lack of clarity across the assortment. We believe we have identified the necessary actions to position Express to regain momentum and we are moving on them.
“Our fall assortment is more cohesive across our wearing occasions, clearly identifying the important trends, and we are aggressively pursuing several marketing initiatives focused on driving new customer acquisition and retention,” he continued.
Looking Ahead
Express again cut its profit forecast for the full year. The company now expects adjusted earnings of $1 to $1.14 per share, well below its previous guidance for $1.41 to $1.51 per share.
For the current quarter, Express forecasts earnings between 9 cents to 15 cents per share, a sharp decline from analysts’ previous projections of 32 cents per share. Same-store sales are expected to decrease in the high-single to low-double digits.
As Express and other retailers head into their next quarter, as well as the looming, all-important holiday quarter, they will need smart and innovative strategies for getting customers to their stores. However, these tactics should stay away from continuous sales that negatively impact the brand’s image and reputation.
EXPR has fallen over 7% year-to-date, and sits at a #3 (Hold) on the Zacks Rank.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>