US: Express Q4 profit down on promotions
- Q4 profit down 25% to US$47.9m from $63.9m
- Sales up 2.2% to $715.9m
- Comparable sales climb 1%
Specialty retail apparel chain Express has reported a 25% decline in fourth-quarter profit, weighed down by accelerated promotions in December and January.
Gross margin declined 300 basis points to 32% and merchandise margin fell 220 basis points during the 13 weeks to 1 February.
Chairman and CEO Michael Weiss said: "Our fourth quarter results were within the range of our revised guidance but disappointing nonetheless given the strength of our collection across both genders.
"We delivered positive comps for the quarter, but the heavier than planned pace of promotions impacted both top-line and margins. On the plus side, we ended the quarter with lean inventories heading into spring.
For the full year, net income fell 16.4% to $116.5m from $139.3m in the prior year period, while sales increased 3% to $2.21bn against $2.16bn last year.
The company expects 2014 earnings per share to be $1.03 - $1.23, down on last year's $1.37, while comparable sales are forecast to be between a decline of low single digits and flat, compared to a 3% increase in the previous year.
For the first quarter, earnings per share are expected to be $0.12 - $0.18 and comparable store sales are forecast to fall low double to high single digits.
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