The net sales of $502.9 million were just barely over last year’s net sales of $502.4 million and short of the FactSet estimate of $522 million. Comparable sales including e-commerce fell 3 percent. E-commerce sales declined 1 percent to $77 million.
Net income was $12.9 million or 16 cents a diluted share, which was lower than last year’s $13.1 million and missed the FactSet estimate of 27 cents a share. With an adjustment related to the Times Square flagship lease, the net income was $19.8 million or 25 cents a diluted share.
“We believe that our product is on trend and we are providing customers with engaging experiences across each of our channels,” said chief executive officer David Kornberg. “That being said, our second quarter and full-year guidance reflect the challenges presented by the current retail environment.”
The forecast for 2016 second quarter is pretty dismal. The comparable sales are expected to be in the negative midsingle digits, while net income is forecast to be in the range of $12 million to $15 million. The full-year 2016 guidance is for comp sales to be negative mid to low-single digits. Adjusted earnings per share are forecast to be in the range $1.41 to $1.54. The Capital IQ estimate was for $1.62.
On a positive note, merchandising margins rose by 20 basis points and gross margins rose by 30 basis points. For the quarter margins represented 33.4 percent of sales versus 33.1 percent for the same time period last year.
Express closed 14 stores in the quarter and opened four. In the second quarter, Express plans to open six more stores and close one. For the full year, Express plans to close a total of 16 stores and open 20.
Express stock has only fallen 3 percent for the past year; but year-to-date, it has been a roller-coaster ride. The stock dropped below $16 and then rose above $21, only to fall once again.