Express swings to loss in Q1, but cost savings plan stays on track

Despite a rough first fiscal quarter, Express remains committed to its ongoing plan to manage costs, optimize its store fleet and improve profitability.



For the quarter ended April 29, the specialty apparel retailer posted a net loss of $4.5 million, or $0.06 per share. This included a net negative $0.03 per share impact related to certain discrete tax items and the exit of Canada.



The loss compares to net income of $12.9 million, or $0.16 per diluted share, in first quarter 2016. First quarter 2016 net income included $11.4 million of non-core expenses related to the amendment of the Times Square Flagship store lease.



Express’ net sales decreased 7% to $467.0 million from $502.9 million in first quarter 2016. Comparable sales (including e-commerce sales) decreased 10%, compared to a 3% decrease in first quarter 2016. However, e-commerce sales increased 27% year-over-year to $97.6 million.



“E-commerce sales accelerated in the first quarter, increasing 27%, and are on track for another record year,” said David Kornberg, the company’s president and CEO. “Store performance is also showing sequential progress. This led to a comparable sales improvement as we moved through the first quarter, a trend that has continued into the second quarter."



Looking ahead to the remainder of 2017, the chain expects comparable sales to be in the negative low single digits, and net income to range between $16 million and $22 million. Its adjusted diluted EPS will range between $0.41 and $0.48.



“As we look to the balance of the year, we are increasingly optimistic about our ability to drive improved performance,” said Kornberg. “We remain focused on carefully managing our cost base, further optimizing our store footprint, and improving profitability.”



He added, “Our balance sheet remains strong with more than $190 million in cash and no debt, and we continue to have solid cash flow. We strongly believe we have the right initiatives in place and are committed to driving shareholder value.”