Express Profit Plunges, Cuts FY14 Outlook; Shares Plummet 10%

(RTTNews) - Express Inc. (EXPR) Thursday reported its profit for the first quarter plunged, as revenues declined and margins dropped. Both earnings and revenues for the quarter came in short of Wall Street estimates.

Moving ahead, the clothing retailer lowered its outlook for the full year 2014 and announced plans to close 50 stores in next three years, dragging its shares down ten percent in after-hours trade on the Nasdaq.

Express now expects full-year 2014 earnings of $0.74 to $0.90 per share and comparable store sales growth of negative mid single digits. Previously, Express projected earnings of $1.03 to $1.23 per share on comparable sales between a low-single-digit decline and flat.

For the second quarter, the company expects loss per share of $0.03 to profit of $0.03 with comparable sales to range from negative mid to high single digits.

Eighteen analysts polled by Thomson Reuters currently project earnings of $0.12 per share for the second quarter and $1.14 per share for full year 2014. Analysts' estimates typically exclude one-time items.

The company said it plans to close about 50 stores over the next 36 months, which are expected to result in profit improvement of $5 to $8 million.

Commenting on the results, Chief Executive Michael Weiss said, "We had anticipated a very challenging first quarter, but our actual results were weaker than planned. While external challenges contributed to the decline in our first quarter performance, we also did not execute as well as we could have."

Columbus, Ohio-based Express' first-quarter profit dropped to $5.1 million or $0.06 per share from $32.4 million or $0.38 per share last year. Eighteen analysts, on average, expected earnings of $0.14 per share for the quarter.

Net sales for the first quarter dropped to $460.7 million from $509.4 million a year ago. Sixteen analysts had a consensus revenue estimate of $464.06 million for the quarter.

Comparable sales, including e-commerce sales, decreased 11 percent, following flat comparable sales last year.

Gross margin as a percentage of net sales declined 370 basis points to 29.8 percent from last year.

The company has also got an authorization to repurchase up to $100 million of its common stock.

EXPR closed Thursday's trading at $13.63, up $0.08 or 0.59%, on a volume of 3.70 million shares. In after hours, the stock plunged $1.38 or 10.12%, to trade at $12.25.