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."
Supermodel @helenachristensen teamed up with longtime friend and designer @camillastaerk on a joint @paredeyewear collaboration. The lineup features three styles and 11 offerings, all of which embody a vintage feel. Get all the details on how they celebrated the collab on WWD.com. #wwdaccessories #wwdeye (📷: @slovekinpics)
“It’s a hard industry to keep motivated, as well, so finding different subjects and people is what makes it worth it – when you’re like, oh, I’ve met great people, I feel like I’ve done something good, and I feel proud of having done this,” said French actress Stacy Martin on being grateful for the variety of roles she’s take on. Read @ktauer’s full interview with Martin on her her latest film “Godard Mon Amour.” #wwdeye (📷: @danieldorsa)
After showing in front of the Eiffel Tower for his last two women’s ready-to-wear collection, it looks like @anthonyvaccarello may be heading to the Big Apple. Sources say the designer will stage his next @ysl show in NYC on June 6. Get all the details on WWD.com. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion