by Vicki M. Young
From WWD Issue 05/25/2011
Express Inc. Tuesday posted better-than-expected first-quarter results but delivered second-quarter guidance that fell short of Wall Street’s expectations.
For the three months ended April 30, net income rose 14.6 percent to $35 million, or 39 cents a diluted share, from $30.6 million, also 39 cents, in the year-ago quarter. Excluding special items, EPS in the most recent quarter was 42 cents, 2 cents better than analysts’ consensus estimates.
Sales gained 9.6 percent, to $467.4 million from $426.5 million, and rose 8 percent on a comparable-store basis. Gross margin rose 130 basis points to 38.2 percent of sales from 36.9 percent a year ago.
In an earnings report issued after the close of the markets, the company projected second-quarter net income in the range of $11 million to $13 million, or between 12 cents and 15 cents a diluted share, below analysts’ estimates for EPS of 16 cents. For the full year, the company raised guidance for adjusted earnings to between $1.52 and $1.61 a share. Its previous projection was between $1.48 and $1.60 a diluted share.
Express shares were up 53 cents, or 2.4 percent, to $22.87 Tuesday. However, they fell 6 percent in early after-hours trading.
“Customers are responding favorably to our assortments across our end uses,” said Michael Weiss, president and chief executive officer. “Our store expansion remains on track, including the scheduled opening of our first locations in Canada in September 2011.”
He told Wall Street analysts during a conference call that the women’s business was driven by growth in dresses, pants, knit tops, sweaters and jewelry. Highlights in the men’s business included jackets, shorts and accessories.
According to Weiss, the company raised prices in certain areas, such as the Adidas pants in women’s, with “no significant push-back from our customers.”
