Shares of Express Inc. lost more than one-fifth of their value in morning trading today after the apparel specialty retailer reported disappointing third-quarter results and provided a bleak outlook for the holiday season.
Noting that Thanksgiving week sales exceeded last year’s but fell short of company expectations, Michael Weiss, chairman and chief executive officer, commented, “We had been planning a promotional holiday season but we now expect the intensity of those promotions to reach heightened levels and we are updating our full-year guidance accordingly.”
Full-year earnings, originally expected to land between $1.52 and $1.60 a diluted share, were lowered to a range of $1.46 to $1.51. Fourth-quarter EPS is projected to fall to between 66 and 71 cents a diluted share, down from 75 cents in the final quarter of 2012 and below the 78 cents previously anticipated, on average, by analysts. Comparable sales, including e-commerce revenues, are expected to rise in the low-single digits.
In the first hours of trading, Express shares were down $5.39, or 21.9 percent, to $19.28. The weak showing by Express also put pressure on shares of Aéropostale Inc., down 3.2 percent to $9.43, and Guess Inc., down 1.8 percent to $33.27, both of which are scheduled to report third-quarter results after market today.
The S&P 500 Retailing Industry Group was off 0.2 percent to 917.46, with most teen and youth retailers hit by sharper declines.
Third-quarter earnings also fell short of analysts’ consensus estimates. In the 13 weeks ended Nov. 2, net income rose 11.1 percent to $19.3 million, or 23 cents a diluted share, from $17.4 million, or 20 cents, in the prior-year period. The consensus estimate among analysts was for EPS of 25 cents.
Revenues rose 7.4 percent to $503 million from $468.5 million. Comparable sales rose 5 percent, including a 21 percent hike in e-commerce to $55 million. Gross margin expanded to 32.9 percent of sales from 32.3 percent a year ago.
“Despite the promotional environment,” the company said, “we were able to recover some of the margin lost in last year's third quarter by delivering a stronger product assortment, especially on the women's side of the business.”
Weiss noted, “Our overarching goal is to continue presenting Express as a premier fashion authority for our demographic, and we believe that our current and go-forward assortments demonstrate that standing."
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye