Express Inc. modestly beat fourth-quarter profit expectations, but warned that it would get a slower-than-expected start to 2013, driving its stock down 9.5 percent to $17.06 in the opening minutes of Wall Street trading.
The retailer’s fourth-quarter rose 5.9 percent to $64 million, or 75 cents a share, from $60.4 million, or 68 cents, a year ago. Profits came in 1 cent ahead of the 74 cents analysts projected.
Sales for the 14 weeks ended Feb. 2 gained 8.3 percent to $728.7 million from $673.2 million. The fourth-quarter benefited from an extra week versus a year ago.
“We ended the year positively, with the initiatives we implemented in our women’s business driving improved results,” said Michael Weiss, chairman and chief executive officer. “These initiatives included: re-balancing our sweater assortment, introducing entry price point fashion items in key categories, especially cut-and-sew knitwear, and communicating clearer pricing and promotional strategies.”
But for the first quarter, Express is expecting earnings per diluted share of 34 cents to 38 cents, well below the 46 cents analysts projected.
“While our guidance anticipates a softer start to the year, reflecting the impact of reduced traffic levels and consumer spending in the month of February, our spring merchandise has been received favorably by our customers, resulting in an improvement in conversion, which we do consider to be a leading indicator, early in the first quarter,” Weiss said.
This year the company plans to develop an outlet business.