Express Inc. said profit more than doubled in its first quarter,
as the women's apparel retailer scaled back promotional activity
and sales rose a better-than-expected 9%.
The company also issued upbeat earnings guidance for the current
quarter and full year Thursday.
Mall-based chains such as Express, which spun off from L Brands
Inc. in 2007, have struggled in recent years amid declining foot
traffic and heavy promotions. After seven months of buyout talks
with private-equity firm Sycamore Partners, negotiations ended in
January. As with women's retailer Chico's, Sycamore abandoned its
attempt to take Express private after failing to line up financing
for the deal on acceptable terms.
At the time, Express signed a so-called standstill agreement
that restricts it from working with third parties to acquire the
retailer until June 15. Following news last week that Ascena Retail
Group would buy Ann Inc. for $2 billion, some industry watchers
wonder if Sycamore will come back to the table or if other
potential suitors have their eye on Express.
Express said Thursday that better acceptance of its product
assortment and a more restrained use of promotions helped drive
first-quarter results.
For the current quarter, Express guided for 13 cents to 16 cents
in per-share profit, above the 11 cents analysts expected. Sales at
stores open at least a year will rise in the low-single digits, the
company said. Analysts, according to Thomson Reuters, anticipated
11 cents in earnings per share and $500 million in revenue.
Express lifted its full-year earnings outlook, now expecting
profit of $1.11 to $1.22 a share, up from its earlier guidance of
93 cents to $1.07 a share and well above the $1.06 average analyst
estimate. The retailer affirmed its same-store-sales forecast of
growth in the low-single digits. Analysts have been looking for
earnings of $1.06 a share and sales of $2.3 billion.
In all for the first quarter, Express reported a profit of $13.1
million, or 15 cents a share, up from a year-earlier profit of $5.1
million, or 6 cents a share.
Excluding expenses related to a debt redemption, per-share
earnings rose to 22 cents.
Revenue rose to $502.4 million from $460.7 million.
The company had guided for 11 cents to 14 cents in adjusted
per-share profit. Analysts expected $487.8 million in revenue.
Same-store sales rose 7%. Express had projected an increase in
the low- to mid-single digits. E-commerce sales increased 12% to
$77.6 million.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
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