Express swings to Q3 loss but tops estimates; new strategy in the works
Express managed to beat Street estimates for its top and bottom line as the company continues its turnaround efforts.
The apparel retailer reported a net loss of $3.1 million, or $0.05 per diluted share, in the quarter ended Nov. 3, compared to net income of $8.0 million, or $0.11 per diluted share, in the year-ago period. The adjusted net loss was $1.8 million, or $0.03 per share, beating analysts’ estimates of a loss of $0.09 per share.
Consolidated net sales decreased 5% to $488.5 million, above estimates of $483.3 million. Comparable retail sales, which includes both Express stores and e-commerce, decreased 5%.
“While we are certainly not satisfied with our results, sequential improvement over the last two quarters, and throughout the third quarter is compelling evidence that the immediate changes we have been able to make to our product, merchandising and marketing approach are resonating with customers,” said Timothy Baxter, who took the reins as CEO of Express in June 2019.
Baxter added that the development of a new corporate strategy “is well underway and the executive leadership team is almost fully in place.” In September, Malissa Akay and Sara Tervo joined the leadership team at Express as executive VP and chief merchandising officer and executive VP and chief marketing officer, respectively.
Express will hold an investor event on January 22 to discuss details of the new strategy, including cost optimization and fleet rationalization.
“The third quarter results reflect some of the new ideas and strategic direction, and the company expects these initiatives to continue to positively impact results in the fourth quarter and beyond,” Baxter said.
Express operates more than 600 retail and factory outlet stores in the United States and Puerto Rico, as well as an online destination.