Express earnings, sales beat Street, but cuts guidance on weak November
Express reported a strong third quarter, but it sounded a warning note about the holiday quarter and revised its earnings and sales outlook downward amid “challenging traffic” and a “highly promotional” apparel environment.
The apparel retailer reported net income was $8.0 million, or 11 cents per diluted share, for the quarter ended Nov.3, compared to $6.0 million, or eight cents per diluted share, in the year-ago period. Analysts’ estimates were for 10 cents a share.
Net sales increased 2% to $515.0 million, above estimates of $505.5 million. Same-store sales, including online, were flat, compared to a 1% increase in the year-ago quarter. E-commerce sales increased 26% to $149.1 million. On a comparable sales basis, e-commerce sales increased 23%.
“We entered the holiday season positioned to succeed with increased newness as compared to last year,” said David Kornberg, president and CEO. “However, sales to date in November have been below our expectations. The apparel specialty retail environment continues to be highly promotional and our traffic has been challenging. While the majority of the quarter is still in front of us, we are revising our guidance to reflect a more cautious stance given recent unexpected sales trends. Our financial position remains sound and we continue to have long-term confidence in our brand and business.”
For the fourth quarter, the company expects earnings per share of 11 cents to 20 cents, which was below analysts’ expectations of 31 cents, and same-store sales to decline 5% to 7%, compared with expectations of flat.
The apparel retailer reported net income was $8.0 million, or 11 cents per diluted share, for the quarter ended Nov.3, compared to $6.0 million, or eight cents per diluted share, in the year-ago period. Analysts’ estimates were for 10 cents a share.
Net sales increased 2% to $515.0 million, above estimates of $505.5 million. Same-store sales, including online, were flat, compared to a 1% increase in the year-ago quarter. E-commerce sales increased 26% to $149.1 million. On a comparable sales basis, e-commerce sales increased 23%.
“We entered the holiday season positioned to succeed with increased newness as compared to last year,” said David Kornberg, president and CEO. “However, sales to date in November have been below our expectations. The apparel specialty retail environment continues to be highly promotional and our traffic has been challenging. While the majority of the quarter is still in front of us, we are revising our guidance to reflect a more cautious stance given recent unexpected sales trends. Our financial position remains sound and we continue to have long-term confidence in our brand and business.”
For the fourth quarter, the company expects earnings per share of 11 cents to 20 cents, which was below analysts’ expectations of 31 cents, and same-store sales to decline 5% to 7%, compared with expectations of flat.