Express profits down, has upbeat outlook for 2015

Increased marketing costs failed to deliver fourth quarter same store sales growth at Express and also took a toll on the specialty retailer’s profitability.

Express reported net income of $41.8 million, down 16% from $49.7 million last year. Net sales increased 1% to $725.8 million from $715.9 million. Same-store sales, including e-commerce, dropped 2%. E-commerce sales climbed 4% to $144.3 million.

"Our fourth quarter comparable sales and earnings performance exceeded the increased guidance that we issued in January,” said David Kornberg, president and CEO Express. “Sales picked up substantially during the final two weeks of December and remained strong throughout the balance of the quarter. I'm particularly pleased that as we reduced all-store promotional activity in January versus the prior year, we drove merchandise margin gains and positioned ourselves to begin 2015 with a better composition of spring inventory than at this time last year."

For the full fiscal year, Express reported net income of $68.3 million, down 41% from $116.5 million the prior fiscal year. Net sales decreased 2% to $2.17 billion, from $2.22 billion. Same-store sales decreased 5%. E-commerce sales rose 4% to $354.2 million.

Express operates in a challenging retail environment. The retailer was hurt by decreased traffic, e-commerce declines and dismal same store sales in 2014. To compete in an increasingly promotional retail environment, Express has invested in its marketing strategies this past fiscal year.

For the first quarter of fiscal 2015, Express is forecasting net income of $3 to $6 million and same-store sales growth in the low-single-digits.

The company currently operates more than 600 retail and factory outlet stores, located primarily in high-traffic shopping malls, lifestyle centers, and street locations across the United States, Canada and Puerto Rico.