Express Plummets on Poor Guidance & Miss
As we near the end of the third quarter earnings season and make our way into the early Christmas reporting period, all eyes lay on the consumer discretionary sector as traders determine the true strength of the economy. The retail reports have been mixed to say the least. Every other day we’ve seen unexpected disappoints and or strength as it appears the analyst don’t have any clue whats going on these days. On Wednesday morning, shares of the popular retailer Express (NYSE:EXPR) plummeted on a disappointing report.
For the period ended Nov. 2, Express Inc. earned $19.3 million, or 23 cents per share. A year earlier it earned $17.4 million, or 20 cents per share. On the top line Express generated revenues of $503 million from $468.5 million in the year ago period. These revenue gains represent 7 percent year over year growth for the company. However, these results cam in below analyst estimates on the bottom line. Analysts on the street had predicted earnings of 25 cents per share on revenue of $499.9 million.
Express stated that Thanksgiving week sales beat last year’s results but did not meet its expectations. Consequently, the company lowered its full-year earnings forecast and provided a fourth-quarter earnings outlook below Wall Street’s view.
If we dig a little deeper we see that sales at stores open at least a year increased 5 percent in the quarter. This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed. Express said that the metric includes its online sales, which rose 29 percent in the period.
At the time of this writing, shares of the company were down by a whopping 19 percent to $20 per share. Going into the rest of the week, expect shares to be volatile and subject to wild price swing. Over the weekend, analyst can dig into the results and offer commentary early next week.
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