Express misses on Q1 earnings, sales

Specialty apparel retailer Express Inc. did not reach Wall Street expectations with declining profit and flat sales in a generally sluggish first quarter of fiscal 2016.



Net income slipped 1% to $12.9 million from $13.1 million in the same quarter the previous fiscal year. Outlet- and IT-related expense growth helped drive down profit.



Net sales stayed essentially flat at $502.9 million, compared to $502.4 million a year earlier. Same-store sales fell 3%, including a 1% dip in e-commerce sales.



Looking ahead, Express sees some rough road for net income and same-store sales. Second quarter net income is forecast at $12-$15 million, compared to $21 million in the second quarter of fiscal 2015. Full-year net income is expected to range from $106-$116 million, compared to $116.5 million the previous fiscal year.



Meanwhile, same-store sales are projected to decline in the mid-single digits for the second quarter and mid-to-low single digits for the full fiscal year.



David Kornberg, Express president and CEO, maintained a positive focus in his remarks.



“In the first quarter, we delivered increased merchandise margin, expansion in gross margin, and higher diluted earnings per share in line with our guidance through the disciplined execution of our strategy,” said Kornberg. “We believe that our product is on trend and we are providing customers with engaging experiences across each of our channels. That being said, our second quarter and full year guidance reflect the challenges presented by the current retail environment.”