Express Inc. didn’t have the luxury of great timing with its initial public offering. It hit the New York Stock Exchange on May 13, just 17 days after the S&P Retail Index hit a 52-week high of 499.41 and began a descent that has resulted in a drop of more than 15 percent since. In its time as a freestanding public company, Express shares have dropped 20.5 percent, but simply making it to the public markets put it in select company.
The specialty chain raised $272 million in its IPO, selling 16 million shares at $17 apiece. The shares (under the ticker symbol EXPR) closed at $16.75 in the first day of trading. It priced lower than the expected range of $18 to $22, but Express Parent LLC still managed to raise more than the hoped-for $200 million stated in the prospectus it filed with the Securities and Exchange Commission in February. The SEC filing said the proceeds from the IPO would be used to prepay debt due in 2015. Its total debt is $416.9 million, the regulatory filing said.
In July 2007, Limited Brands Inc. sold 75 percent of Express to Golden Gate Capital for $602 million.
In last February’s SEC filing, the company said women’s comprised 68 percent of net sales, and men’s represented 32 percent in fiscal 2008. The chain posted a net loss of $29 million on net sales of $1.74 billion in year ended Jan. 31, 2009.
Before it went public, the company said in a regulatory filing for a 39-week period ended Oct. 31, 2009, that income was $29.3 million on sales of $1.17 billion.
In its first quarterly filing as a public company, the firm said first-quarter income for the three months ended May 1 more than quadrupled to $30.6 million, or 39 cents a diluted share, from $7.6 million, or 10 cents, in the prior-year quarter. Sales climbed 13.9 percent, to $426.5 million, as comparable-store sales rose 12 percent.
On Sept. 1, the company reported second-quarter net income of $22.1 million, or 25 cents a diluted share, versus a net loss of $6.8 million, or 9 cents, a year earlier. Excluding a tax benefit and other items, profits tallied $7.1 million, or 8 cents a share. Sales for the quarter grew 8.9 percent, to $407.3 million, while comps grew 6 percent. E-commerce sales, considered a major growth opportunity for Express, rose 60 percent to $27.3 million, or 6.7 percent of overall sales.
The 576-unit chain expects income for the full year 2010 in the range of $109 million to $114 million, or $1.27 to $1.33 a diluted share, excluding one-time items.
Express said in its regulatory filing that it plans to open an average of 30 stores across the U.S. and Canada over each of the next five years, representing annual store growth of 5 percent. It also hopes to expand the brand internationally over that span. It already operates four Express stores in the Middle East.