US: Express lowers FY outlook on Q3 profit fall
Apparel retailer Express has lowered its full-year earnings outlook after booking a 46.7% fall in third-quarter net profit.
Net income dropped to US$17.4m for the 13 weeks to 27 October, compared to $32.7m last year.
The retailer saw sales slide 4% to $468.5m, from $486.8m in the same period last year, while comparable sales fell 5%. Gross margin was 32.3% of net sales, down from 36.2% a year ago on higher occupancy costs and a 150 basis point decline in merchandise margin.
"The third quarter was a very challenging one for our company," said chairman and CEO Michael Weiss. "We were disappointed with our results."
Express said it has rebalanced its sweater assortment, introduced entry price point fashion items and started to set clearer pricing and promotional strategies.
Weiss added: "As we begin the fourth quarter, we are pleased to report that our clear promotional messaging contributed to a record Black Friday performance that exceeded our expectations.
"However, we remain cautious on the overall performance of the fourth quarter given that the majority of the holiday season lies ahead. We expect to make sequential improvement as our corrective measures get further underway."
The company now expects full-year earnings to range from $1.47 to $1.53 per share, compared to earlier guidance of between $1.69 and $1.79 per diluted share.
|EXPRESS, INC. REPORTS THIRD QUARTER RESULTS|
|-- Third quarter diluted EPS of $0.20, at high-end of updated guidance
-- Inventory per square foot decreased 1.3%
-- Invested $15.0 million to repurchase 1.3 million shares
-- Updates fourth quarter diluted EPS guidance to a range of $0.62 to $0.68
COLUMBUS, Ohio, Nov. 28, 2012 /PRNewswire/ -- Express, Inc. (NYSE: EXPR), a specialty retail apparel chain operating more than 600 stores, today announced its third quarter 2012 financial results for the thirteen and thirty-nine week periods ended October 27, 2012, which compares to the same period ended October 29, 2011 last year.
Michael Weiss, Express, Inc.'s Chairman and Chief Executive Officer commented: "The third quarter was a very challenging one for our Company. We were disappointed with our results, which included a net sales decrease of 4% and a comparable sales decrease of 5% compared to the prior year third quarter. However, we believe we have identified the issues impacting our performance and have developed, and begun to execute, a plan to fix them. To that end, we re-balanced our sweater assortment, introduced entry price point fashion items in key categories, and began to set and communicate clearer pricing and promotional strategies for our customers. We believe that these actions will position us well for the future. We also continued to focus on our four growth pillars. We saw continued positive momentum in our men's business, experienced double digit growth in e-commerce sales versus the prior year, and achieved our store expansion goals with the opening of eight new stores, including one in Canada. In addition, we continued our international expansion with the opening of four additional franchise stores in the Middle East. As we begin the fourth quarter, we are pleased to report that our clear promotional messaging contributed to a record Black Friday performance that exceeded our expectations. However, we remain cautious on the overall performance of the fourth quarter given that the majority of the holiday season lies ahead. We expect to make sequential improvement as our corrective measures get further underway. We remain confident in, and committed to, our strategies and four pillars of growth, which we believe position us for improved results over the long term."
Third Quarter Operating Results:
Thirty-Nine Week Operating Results:
Third Quarter Balance Sheet Highlights:
During the third quarter of 2012, the Company opened 8 new stores, including 1 in Canada, and closed 1 store. At quarter end, the Company had 618 locations and 5.4 million gross square feet in operation.
Conference Call Information:
A conference call to discuss third quarter results is scheduled for November 28, 2012, at 9:00 a.m. Eastern Time (ET). Investors and analysts interested in participating in the call are invited to dial (877) 705-6003 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at: http://www.express.com/investor and remain available for 90 days. A telephone replay of this call will be available at 12:00 p.m. ET on November 28, 2012 until 11:59 p.m. ET on December 5, 2012 and can be accessed by dialing (877) 870-5176 and entering replay pin number 403560.
Express is a specialty apparel and accessories retailer of women's and men's merchandise, targeting the 20 to 30 year old customer. The Company has over 30 years of experience offering a distinct combination of fashion and quality for multiple lifestyle occasions at an attractive value addressing fashion needs across work, casual, jeanswear, and going-out occasions. The Company currently operates over 600 retail stores, located primarily in high-traffic shopping malls, lifestyle centers, and street locations across the United States, in Canada and in Puerto Rico. Express merchandise is also available at franchise stores in the Middle East and Latin America. The Company also markets and sells its products through the Company's e-commerce website, www.express.com.
Original source: http://www.express.com/content.jsp?pageName=Investor
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