Another apparel retailer sounds cautious note on holiday

Express reported a drop in third-quarter profit and slashed its full-year adjusted earnings outlook, warning that the holiday season will "remain challenging."



In recent days, an array of apparel retailers have expressed caution about the holiday selling season, including Gap, Abercrombie & Fitch and American Eagle Outfitters.



Express earned $11.6 million, 15 cents per share, for the quarter ended Oct. 29, down from $26.3 million, or 31 cents per share, a year earlier.



Revenue declined 7% to $506.1 million from $546.6 million, but topped Wall Street's view. E-commerce sales rose 15% to $96.3 million. Same-store (including e-commerce sales) decreased 8.5%.



“Our third quarter performance was highlighted by sales and earnings in line with our guidance and progress made addressing the areas noted for improvement during our second quarter call,” said David Kornberg, president and CEO. “Notably, while mall traffic challenges continued to impact our store performance, we achieved a double digit increase in e-commerce sales. We expect the holiday season to remain challenging as mall traffic and a highly promotional retail environment continue to be headwinds.”



Going forward, Express sees fourth-quarter earnings in a range of 26 cents to 30 cents per share, with sales at stores open at least a year down by low double digits. Analysts had expected earnings of 54 cents per share.



For the year, the retailer now anticipates full-year adjusted earnings between 78 cents and 82 cents per share. Its prior guidance was for earnings in a range of $1 and $1.14 per share.