Market Insider

Express stumbles after tough quarter, lower guidance

Sale in store, reduced
Dan Dalton | Getty Images

Shares of Express fell 8.4 percent Wednesday after the company reported disappointing quarterly results and gave lower full-year guidance.

The apparel and accessories retailer reported first-quarter earnings of 25 cents per share, missing consensus estimates by 2 cents, according to Thomson Reuters. Sales came in at $502.9 million versus consensus expectations of $521.4 million.

Express, which targets 20 to 30-year-old customers, saw a 3 percent decline in comparable sales. E-commerce also fell 1 percent, with sales of $77 million.

The company's 640 retail and outlet stores are in located primarily in high-traffic shopping malls, which have taken a hit this year as consumers continue to shop online.

Retail faces ‘double-edged sword’ in internet age: JPMorgan Analyst
A Walmart employee changes a price at a store in Miami.
This Wal-Mart tactic should send shivers across retail

"From mid-March through the back half of the quarter, traffic declined unexpectedly in each of our channels and impacted our quarterly results," David Kornberg, president and CEO of Express, said in a statement.

Full-year guidance was lowered to $1.41 to $1.54 a share, from $1.56 to $1.71 a share.

"The full year guidance we issued this morning makes clear that we will encounter obstacles along the way, but we believe our 2016 priorities provide a sound road map but navigating with a difficult environment," Kornberg said.

The company is looking to reach its core audience through social media and new partnerships.

This summer, Express is bringing a new "visual" search to its shopping app. Users submit a photo of an item they like, and are then guided to relevant products for sale.

Express also launched a new men's Instagram account, and is "ramping up" its Snapchat presence with a strategic partnership. Karlie Kloss, a super model and Instagram star with 4.7 million Instagram followers, will return to Express later this year as the company's brand ambassador.

Source: FactSet

The stock closed at $14.68 Wednesday, down from its 52-week high of $21.57. Shares of Express are down more than 15 percent so far this year and more than 13 percent in the last 12 months.