News Column

Ahead of the Bell: Express shares fall on 1Q miss

May 30, 2014

COLUMBUS, Ohio (AP) — Shares of Express Inc. fell 11 percent in premarket trading after the company reported a steep drop in first-quarter net income and gave a weak outlook.

The clothing and accessories chain has been dealing with declining mall traffic and tough competition. In addition, its clothing offerings have not struck a chord with fickle teenagers.

"We had anticipated a very challenging first quarter, but our actual results were weaker than planned," CEO Michael Weiss said.

Stifel Nicolaus analyst Richard Jaffe, in a note to investors, blamed the drop on unappealing merchandise.

"We believe much of Express' weakness is self-inflicted merchandise misses, which will take time to correct," he said.

For the first quarter, net income fell 84 percent to $5.1 million, or 6 cents per share. That compares with net income of $32.4 million, or 38 cents per share last year. Analysts expected 14 cents per share, according to FactSet.

Revenue fell 10 percent to $460.7 million from $509.4 million last year. Analysts expected $463.7 million. Revenue at stores open at least a year, a key retail metric, fell 11 percent.

Weiss said second-quarter results will be hurt by steep discounts to clear out inventory. The company expects a net loss of 3 cents to a profit of 3 cents per share in the second quarter. Analysts had expected a profit of 12 cents per share.

For the year, the company expects 74 cents per share to 90 cents per share. Analysts had expected $1.15 per share.

Shares of Express fell $1.54, or 11.3 percent, to $12.09 in premarket trading.

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Source: Associated Press

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