Express remains flat in Q1, adjusts full year guidance

By

Obi Anyanwu

Published
May 25, 2016

Express, Inc. on Wednesday released its financial results for the first quarter of 2016 ended on April 30, 2016.
 

Sales were flat in the quarter at $502.9 million compared to $502.4 million in the previous first quarter, and comparable sales and e-commerce sales both decreased 3% and 1%, respectively. Net income also decreased to $12.9 million, or $0.16 per diluted share, compared to $13.1 million, or $0.15 per diluted share, in the first quarter of 2015.
 
Despite the decreases, the company did deliver increased margins. Merchandise margin rose by 20 basis points and buying and occupancy as a percentage of net sales improved by 10 basis points. Together, the company had a 30 basis point improvement in gross margin, representing 33.4% of net sales compared to 33.1% from last year.

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David Kornberg, the Company's President and Chief Executive Officer, noted that, “In the first quarter, we delivered increased merchandise margin, expansion in gross margin, and higher diluted earnings per share in line with our guidance through the disciplined execution of our strategy. We believe that our product is on trend and we are providing customers with engaging experiences across each of our channels. That being said, our second quarter and full year guidance reflect the challenges presented by the current retail environment.”
 
For the second quarter of 2016, Express expects its comparable sales to be in the negative mid single digits compared to 7% from the second quarter of 2015, and its net income to range from $12 million to $15 million versus $21.0 million in the previous year.
 
The company provided the updated 2016 full year guidance as well. The full year comparable sales are expected to range from negative mid to low single digits versus 6% in 2015, adjusted net income to be between $113 million and $123 million compared to $122.4 million in the previous year and adjusted diluted EPS to be between $1.41 and $1.54 versus $1.45 in 2015.