Express loss widens; cuts 10% of corporate staff
Express Inc. continues to struggle amid the pandemic.
The apparel retailer reported third-quarter earnings and sales that missed estimates and revealed that it has completed a 10% workforce reduction at its Columbus, Ohio, corporate headquarters. Express said it is also pursuing additional financing to provide flexibility in managing its liquidity.
The company had a net loss of $90.3 million, or $1.39 a share, in the quarter ended Oct. 31, compared to a loss of $3.1 million, or $0.5 a share, in the year-ago period. Excluding the income tax benefit from a CARES Act payment of $8.0 million, Express had an adjusted per-share loss of $1.17, much bigger than analysts’ estimates of a loss of $0.51 a share.
Sales fell 34% to $322.1 million, missing estimates of $376 million. Same-store sales, which includes both Express stores and e-commerce, fell 30%. Outlet same-store sales fell 20%.
In a statement, Express CEO Tim Baxter expressed both optimism and caution about the coming months.
“In the third quarter, we continued to advance the ‘EXPRESSway Forward’ strategy while taking decisive and appropriate action to manage our liquidity,” he said. “Our e-commerce business continues to gain momentum and the new fashion product that fully reflects the ‘Express Edit’ viewpoint is outpacing the balance of our assortment. We have effectively managed that which was within our control, and as I look ahead, I am optimistic about our ability to deliver improved results and cautious about the continued uncertainty brought about by the current environment.”
Express said its workforce reduction is expected to result in $13 million in benefits in 2021, and is in addition to the $95 million cash tax benefit it expects to receive in the second quarter of 2021 as part of the CARES Act.
The company is aiming to realize about $550 million in liquidity benefits, with about $440 million expected in 2020.