Express stock is moving higher in pre-market trading after the retailer delivered third-quarter earnings that beat analysts’ estimates and also raised its 2015 outlook.
For the third quarter, Express reported that net sales increased 10 percent to $546.6 million from $497.6 million, beating the FactSet estimate of $540 million. Net income was $26.3 million, or 31 cents a share, which was better than last year’s third-quarter net income of $14.6 million and also clocked in higher than the FactSet estimate of 29 cents a share.
David Kornberg, president and chief executive officer, noted that, “I am pleased with our third-quarter performance. We presented our customers with compelling fashion. We maintained our balanced approach to running the business, used promotions with restraint and managed inventory with discipline. This led to a 10 percent increase in sales, with retail stores, outlets and e-commerce each growing. Comparable sales increased by 6 percent, operating margin expanded to 8.1 percent, and diluted EPS increased 82 percent compared to last year’s third quarter.”
Gross margins also improved to 35 percent compared to 31.7 percent in last year’s third quarter. The improvement was achieved by a reduction in promotions.
The guidance for the fourth quarter for 2015 is for comparable sales gains to be in the low-single digits, which tops last year’s negative 2 percent. Net income for the fourth quarter is forecast to be in the range of $50 million to $54 million. The outlook for full-year 2015 is for a comparable sales increase of midsingle digits, also higher than 2014’s negative 5 percent.
Looking ahead to the remainder of the holiday season, Kornberg went on to note that, “While we expect the holiday season to remain highly competitive, we believe we are well-positioned, and our positive outlook for the season is reflected in our guidance.”
Express stock has had a good year so far as it has gained 18 percent in value year-to-date.