Tag Archives: NYSE:EXPR

Express: Zacks’ Bear of the Day Play

It has been a very challenging environment for mall based retailers due to declining traffic, rising trend for online shopping and increasing competition from off-price fashion chains. Many of them have seen declining sales of late despite improving labor market.

About the Company

Express (EXPRis a retailer of specialty apparel and accessories for women and men. The company targets the 20 to 30 year old customer. They currently operate over 600 retail stores, located primarily in shopping malls, lifestyle centers, and street locations across the US, in Canada and in Puerto Rico.

Their merchandise is also available at franchise stores in the Middle East and Latin America. Further, the Company also markets and sells its products through its e-commerce website.

Weak Results and Lower Guidance

The company reported Q3 results on December 1. Net income came in $11.6 million or 11 cents per share on an adjusted basis, short of the Zacks Consensus Estimate of 12 cents per share. Net income was also down significantly from $26.3 million, or 31 cents per share, in the same quarter a year ago.

Net sales were down 7% year-over-year, while comparable sales, including e-commerce sales, fell 8%. However, e-commerce sales were up 15% during the quarter.

The management slashes their guidance again for the year as declining mall traffic continues to impact their performance. They now expect adjusted earnings between $0.78 to $0.82 per share, down from previously lowered guidance of $1 to $1.14 per share.

They expect the” holiday season to remain challenging as mall traffic and a highly promotional retail environment continue to be headwinds.”

Shares fell about 15% after the report.

Falling Estimates

Analysts have slashed their estimates for the company after weak results and downbeat guidance.  Zacks Consensus Estimates for the current and next fiscal year have plunged to $0.79 per share and $0.98 per share from $1.06 and $1.16 respectively, before the report.

Declining estimates sent the stock to a Zacks Rank #5 (Strong Sell).

 

EXPRESS INC Price, Consensus and EPS Surprise

EXPRESS INC Price, Consensus and EPS Surprise | EXPRESS INC Quote

The Bottom Line

In addition to disappointing consumer spending and mall traffic, the retail space is going through a shift toward online shopping. With tightening labor markets, “wage pressure’ has also started hurting retailers.

Zacks Industry Rank of 213 out of 265 (Bottom 20%) for “Retail-Apparel and Shoes” and the Sector Rank of 14 out of 16 (Bottom 13%) for “Retail and Wholesale” indicate more pain ahead.

However, some retailers have been able to deliver much better-than-expected results Investors could look at a better ranked retailer Tilly’s (TLYS), which currently has a Zacks Rank #1 (Strong Buy). The company reported a huge beat and shares surged after the results.

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Express: Zacks’ Bear of the Day Play

It has been a very challenging environment for mall based retailers due to declining traffic, rising trend for online shopping and increasing competition from off-price fashion chains. Many of them have seen declining sales of late, despite improving labor market and still low gas prices.

About the Company

Express (EXPR) is a retailer of specialty apparel and accessories for women and men. The company targets the 20 to 30 year old customer. They currently operate over 600 retail stores, located primarily in shopping malls, lifestyle centers, and street locations across the US, in Canada and in Puerto Rico.

Their merchandise is also available at franchise stores in the Middle East and Latin America. Further, the company also markets and sells its products through its e-commerce website.

Weak Results and Lower Guidance

The apparel chain reported weak results for the second quarter and also slashed its guidance for the year, leading to a sharp decline in shares after the report.

Net sales decreased 6% during the quarter to $504.8 million while same store sales (including e-commerce sales) declined 8%, compared to a 7% increase in the same quarter a year ago. E-commerce sales were down 7% to $70.1 million.

Net income was $10.1 million, or $0.13 per share compared $21.0 million or $0.25 per share in the previous year quarter. Earnings were way short of the Zacks Consensus Estimate of $0.17 per share. This was the second consecutive quarterly miss for the retailer.

The management now expects adjusted earnings of $1 to $1.14 per share for the full year, down from previous guidance for $1.41 to $1.54 per share.

Falling Estimates

Analysts have slashed their estimates for the company after weak results and downbeat guidance.  Zacks Consensus Estimates for the current and next fiscal year have plunged to $1.05 per share and $1.21 per share from $1.47 and $1.59 respectively, before the report.

Declining estimates sent the stock to a Zacks Rank #5 (Strong Sell).

The Bottom Line

In addition to disappointing consumer spending and mall traffic, the retail space is going through a shift toward online shopping. With tightening labor markets, “wage pressure’ has also started hurting retailers.

However some retailers have been able to deliver positive surprises in the latest quarter, with significant cost cutting measures and some changes in their business model. Investors could look at a better ranked retailer Nordstrom (JCP), which currently has a Zacks Rank #1 (Strong Buy). The company reported a huge beat and shares surged after the results.

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Express: Zacks’ Bull of the Day Play

Express (EXPRSnapshot Report) continues to hit the right fashion trends, driving strong sales growth and boosting profit margins as it avoids heavy discounting. This has also prompted analysts to revise their estimates significantly higher, sending the stock to a Zacks Rank #1 (Strong Buy).

While shares have risen sharply so far this year, the valuation picture still looks attractive. Express boasts a Zacks Value Style Score of ‘A’.

Express, Inc. is a specialty apparel and accessories retailer, targeting 20-30 year old men and women. It currently operates approximately 630 stores, located primarily in shopping malls, lifestyle centers, and street locations across the United States, Canada, and Puerto Rico.

Shares of Express have gained more than 15% since I last wrote about the stock in late March.

First Quarter Results

Express delivered strong first quarter results before the bell on May 28. Earnings per share came in at $0.22, well above the Zacks Consensus Estimate of $0.14. It was also significantly higher than EPS of $0.06 in the same quarter last year.

Sales rose 9% to $502.4 million, beating the consensus of $487 million. This was driven by a 7% increase in same-store sales.

Also note that Express didn’t just succeed in boosting sales, it boosted its profit margins too. The merchandise margin expanded 200 basis points due in large part to “a more restrained use of promotions”. In other words, Express doesn’t have to discount heavily because demand for its products is that strong. Overall, the gross profit margin expanded 330 basis points to 33.1%.

Meanwhile, the operating margin more than doubled from 3.3% to 6.8% of net sales.

Estimates Soaring

Management also provided bullish guidance for Q2 and full year 2015. The company expects low single-digit same-store sales growth for both Q2 and full year 2015. It also expects 2015 adjusted EPS between $1.04 and $1.15, which was above consensus at the time. This prompted analysts to revise their estimates significantly higher, sending the stock to a Zacks Rank #1 (Strong Buy).

The 2015 Zacks Consensus Estimate is now $1.20, near the upper end of guidance. The 2016 consensus has also jumped higher, rising from $1.17 to $1.33 over the last 30 days.

Reasonable Valuation

Shares of Express have been soaring since the Q1 report, but the valuation picture still looks very reasonable. The stock trades at 15x 12-month forward earnings and sports an enterprise value to cash flow ratio of 9. Both metrics are well below the industry median.

The Zacks Value Style Score for EXPR is an ‘A’.

The Bottom Line

With solid top-line growth, expanding margins, rising earnings momentum and attractive valuation, Express continues to offer investors a lot to like.

Todd Bunton, CFA is a Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor and Surprise Trader services.

Express: Zacks’ Bull of the Day Play

The fourth quarter is always vital for retailers, and Express (EXPRSnapshot Report) is no exception. More than half of its operating income came from the holiday quarter last year, for instance. The company came through and delivered better-than-expected Q4 results on March 11, as both sales and EPS topped the Zacks Consensus Estimates.

Additionally, management issued encouraging guidance for 2015, prompted a flurry of positive estimate revisions from analysts. This sent the stock to a Zacks Rank #1 (Strong Buy).

Express, Inc. is a specialty apparel and accessories retailer, targeting 20-30 year old men and women. It currently operates approximately 640 stores, located primarily in shopping malls, lifestyle centers, and street locations across the United States, Canada, and Puerto Rico.

Fourth Quarter Results

Express delivered better-than-expected results for the all-important fourth quarter on March 11. Earnings per share came in at $0.49, beating the Zacks Consensus Estimate by 3 cents.

Net sales rose 1% year-over-year to $725.8 million, ahead of the consensus of $714.0 million. Same-store sales (including e-commerce) declined by 2% but beat management’s guidance.

Merchandise margins increased 70 basis points as Express benefited from more targeted promotional activity. Operating income declined 10% year-over-year, however, as operating margins fell from 11.9% to 10.5% of net sales. But this was due in part to higher incremental marketing activities, which should pay off through higher future sales.

Estimates Soaring

Following its Q4 results, management provided an encouraging outlook for 2015. The company expects same-store sales growth in the low-single digits and adjusted EPS of $0.93-$1.07. This was above consensus at the time and prompted analysts to not only revise their estimates higher for 2015 but for 2016 as well.

These large positive estimate revisions sent Express to a Zacks Rank #1 (Strong Buy).

The 2015 Zacks Consensus Estimate is now $1.06, up from $0.92 just 60 days ago. The 2016 consensus estimate is currently $1.17, up from $1.00 over the same period.

Valuation

Shares have risen for Express following the strong Q4 report, but the valuation picture still looks reasonable. Shares trade around 15x 12-month forward earnings, a discount to the industry median of 19x. Its enterprise value to cash flow ratio of 9 is also well below the industry median of 12.

Its price to sales ratio of 0.6 is also a significant discount to the peer group multiple of 1.1.

The Bottom Line

With strong earnings momentum and reasonable valuation, Express offers investors attractive upside potential near term.

Todd Bunton, CFA is a Stock Strategist for Zacks Investment Research and Editor of the Income Plus Investor and Surprise Trader services.

Express: Zacks’ Bear of the Day Play

When will Express Inc. (EXPRSnapshot Report) turn it around? This Zacks Rank #5 (Strong Sell) had a tough holiday quarter but Q1 was also a major disappointment as it missed the Zacks Consensus by 57%.

Express operates 630 men’s and women’s specialty apparel stores targeting 20 to 30 year olds in high-traffic shopping malls, urban neighborhoods and lifestyle centers.

Big Miss in Q1

In the fourth quarter the problem was the heavy promotional environment. In the first quarter of 2014, it was a consumer who just wasn’t out shopping.

On May 29, the company reported fiscal first quarter results and missed the Zacks Consensus by $0.08. Earnings were just $0.06 compared to the consensus of $0.14.

Express said business strengthened in April but it wasn’t enough to boost the quarter.

Comparable store sales, which includes e-commerce sales, fell 11%. You can’t blame it all on the weather either as e-commerce sales also fell by 2% in the quarter following a 48% increase the year before. That is sales from people shopping in their living rooms during the polar vortices.

Warning on the Second Quarter

The second quarter is not looking too bright. Express said that it is still working its way through the spring inventory, which is selling slowly, and that the Memorial Day event, which usually draws good traffic, was not as successful this year.

It anticipates a “very challenging” first half of the year.

Combined with the big miss in the first quarter, that’s really all analysts needed to hear.

Since the earnings report was released, analysts slashed estimates which has pushed down the Zacks Consensus to juts $0.83 from $1.59 just 90 days ago.

That’s an earnings decline of 40% as Express made $1.37 in 2013.

Is Express a Deal?

After yet another quarterly disappointment, Express shares sank to new 52-week lows.

Express has a forward P/E of 16.7 which is basically in line with the average of the S&P 500. I wouldn’t call the shares “cheap.”

The entire retail industry isn’t exactly a great place to be investing right now. The retailer’s industry rank is in the bottom 18% of all 265 industries that Zacks tracks.

But if you MUST buy a retailer right now, you might want to consider Foot Locker (FLSnapshot Report). It has surprised on the Zacks Consensus 3 quarters in a row. This Zacks Rank #2 (Buy) stock is also expected to grow earnings by 15% this year.

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Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec.