What: Shares of Express (NYSE:EXPR) were getting hammered today, falling as much as 13% after another disappointing earnings report.
So what: This was the third straight earnings miss for the apparel chain, and comparable sales sank 11% in the quarter, two significant signs of structural weakness. CEO Michael Weiss said the company had anticipated a "very challenging" quarter, but results were actually weaker than expected. Overall sales fell 10% to $460.7 million, missing estimates of 464.1 million, while profits shrank from $0.38 per share a year ago to just $0.06, below expectations of $0.14.
Now what: Fashion tastes are fickle and Express seems to have become a victim of changing consumer demand. Excessive inventory is also hurting the company, reflected in its profit guidance for the current quarter at just breakeven, versus the analyst estimate at $0.12. Full-year guidance was better as management expects a stronger second half, but it was also significantly below expectations. Like other struggling clothing retailers, there's no easy fix for Express's problems. Still, the company remains profitable and sees promise in its factory outlet stores. While I wouldn't invest in a company with double-digit same-store sales declines, I'd give management a few more quarters to stop the bleeding before closing the book on Express.
Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.
Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.