Express Triples Profit
26 August 2015 - 10:50PM
Dow Jones News
Express Inc. said income tripled in its latest quarter, as the
apparel retailer's sales and profit margin grew amid better product
mix and scaled-back promotional activity.
The company's per-share profit easily beat its forecast and as a
result, Express further lifted its full-year outlook, and issued
upbeat guidance for the current quarter.
Shares in the company, up about 19% this year, surged 13%
premarket.
Mall-based chains like Express—which spun off from L Brands Inc.
in 2007—have struggled in recent years amid dwindling foot traffic
and margin-eating promotions.
But on Wednesday, Chief Executive David Kornberg said inventory
management and improved product assortment "enabled us to reduce
the breadth, depth and frequency of our promotions."
Overall, the retailer booked a profit of $21 million, or 25
cents a share, up from $6.9 million, or 8 cents, a year earlier.
Revenue increased 11% to $535.6 million.
The company had guided for 13 to 16 cents in per-share profit.
Analysts had anticipated $504.8 million in sales.
During the period, sales at stores open at least a
year—including e-commerce—jumped 7%, a sharp reversal from a year
earlier. In last year's quarter, same-store sales fell 5%.
Meanwhile, Express managed to improve its gross profit margin to
33.1% from 28.3%.
For the year ending in January, Express now expects to earn
$1.30 to $1.37 a share, up from its earlier prediction of $1.11 to
$1.22 a share. The company expects to achieve same-store sales
growth in the mid-single digits; previously, it guided for growth
in the low-single digits. Analysts have projected $1.20 in
full-year earnings per share, according to Thomson Reuters.
Express said third-quarter profit will be between 26 cents and
29 cents a share, above the 25 cents analysts have projected.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 26, 2015 08:35 ET (12:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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