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Why Express Shares Plunged

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August 22, 2012 | Comments (2)

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of clothing retailer Express (NYSE: EXPR  ) sank 10% today after its quarterly results and outlook disappointed Wall Street.

So what: Express' second-quarter profit managed to top estimates, but a clear miss on the top line -- revenue of $454.9 million versus the consensus of $467 million -- coupled with downbeat guidance for the full year is forcing analysts to lower their growth expectations yet again. In fact, same-store sales barely budged during the quarter, up a paltry 1%, reinforcing concerns over the brand's durability amid the weak economy.

Now what: Management now sees full-year EPS of $1.69-$1.79 -- versus its prior view of $1.79-$1.89 -- and expects flat to low-single-digit same-store sales. "As we begin the second half of the year, we believe it is prudent to set our guidance more conservatively and in line with the trend we experienced in the second quarter," Chairman and CEO Michael Weiss said. "We remain confident in our strategies and expect the disciplined execution against our growth pillars to result in another year of growth for Express." With the stock hitting a new 52-week low today and trading at a forward P/E of around eight, buying into that optimism might not be a bad idea. 

Interested in more info on Express? Add it to your watchlist.

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Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 22, 2012, at 9:33 PM, rbemr wrote:

    I just read the Yahoo Finance article "Another Opportunity To Benefit From The Games Naked Short Traders Play?" that cites Brian D. Pacampara's blog. I've seen repeated hit pieces like this by the Fool now, particularly ARNA. This process is raping the average investor, who you are supposed to be serving. I am dropping my subscription. The Gardners try to portray themselves as average Joes. What a joke. They are deep in the sheets with big money Wall Street. If there's any integrity in the organization, these authors/bloggers should be rooted out and exposed. Motley Fool owes a public apology to your retail subscribers who have lost money because of your deceitful blogs.

  • Report this Comment On August 23, 2012, at 9:28 AM, IlanBigfoot wrote:

    I suspect you don't know what your talking about. Here's the link in the Yahoo article you sited:

    http://www.fool.com/investing/general/2012/08/17/1-star-stoc...

    Brian Pacampara 'barely' writes these kind of articles, they are based of the fool's CAPS system, with some very basic facts about the company and then a quote from a recent CAPS rating. These are probably mostly automated.

    As the Yahoo article you sited indicates, it's the bankers that are doing something shady:

    http://finance.yahoo.com/news/another-opportunity-benefit-ga...

    " it has become common practice for many of these bankers and funds to position themselves in stocks "naked short" after hearing "through the grapevine" that firms may be getting ready to engage in dillutive financings. Even worse, they do this after they, themselves, are the ones approaching these firm with tempting offers to take their money after spotting increased volume and volatility in the stocks."

    This has nothing to do with CAPS.

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5/20/2013 4:03 PM
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