Columbus, OH—Express Inc. reported Tuesday increases in its first quarter earnings and sales. But the results missed analysts’ expectations as did its forecast, sending the specialty retailer’s shares to their lowest since its IPO two year ago.
For the quarter ended April 28, Express posted net income of $42 million, or 47 a share, compared to $35 million, or $39 a share, last year.
Net revenue was up 6% to $496 million with comparable store sales up 4% on top of an 8% increase a year ago.
Nonetheless, the report missed analysts’ expectations for earnings of 49 cents a share on sales of $503.17 million.
Delayed Flagship Openings Planned for Fall
“We had a solid start to the year, reporting a double digit increase in earnings per diluted share while making steady progress toward our long-term goals,” said Michael Weiss, chairman/president/ceo.
“The first quarter included the roll out of our new loyalty program, Express NEXT, to all stores in the United States and the opening of four new stores in our new design format,” Weiss said. “In addition, shortly after quarter end, we entered into a multi-country international franchise arrangement, marking our entry into Latin America.”
Express expects to end it the year with 627 doors as it plans to open about 30 new stores in the U.S. and Canada while closing roughly 12 U.S. stores.
The opening of two flagship locations in San Francisco and New York has been delayed the company said.
“We had anticipated these locations would open ahead of holiday 2012,” Weiss said on a conference call. “We now plan to open both flagship stores in fall 2013, possibly sooner.”
Express also said that it cut its 2012 outlook partly to account for some non-cash expenses related to two store openings. Hence, Express now expects second quarter comparable sales to increase low- to mid-single digits. Second quarter net income was forecast at $13 million to $16 million, or 15 to 18 cents a share. But analysts’ consensus expects 20 cents a share.
For its full fiscal year, Express now expects earnings of $1.79 to $1.89 a share, down from its prior outlook of $1.84 and $1.97 a share. Analysts expect earnings of $1.95 a share.