What happened
Shares of Express Inc. (EXPR), a specialty apparel and accessories retailer of women's and men's merchandise, are down nearly 13% by 11 a.m. EST Wednesday. The market found some issue with the company's fourth-quarter results, but weak guidance caused even more concern.
So what
Express reported revenue of $678 million for the quarter, which was higher than analysts' estimates calling for $675 million. On its bottom line, the retailer posted earnings per share of $0.29, right in line with analysts' expectations.
Comparable sales, including e-commerce sales, decreased an eye-popping 13% during the fourth quarter, compared to the prior year's 4% gain -- not a reversal investors enjoy seeing. Last, in terms of guidance for fiscal 2017, Express expects earnings per share to check in between $0.65 and $0.73, far below consensus estimates calling for $0.87 per share.
Image source: Getty Images.
Now what
"Despite ongoing pressures in the retail sector, our fourth quarter earnings were in line with previously issued guidance. As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment," said David Kornberg, president and CEO of Express.
As with many retailers, the future of Express as a quality investment will depend on management's ability to capitalize on e-commerce and omni-channel marketing efforts. Express' online sales generated 25% of fourth-quarter net sales, which was a 9% increase over the prior year. That 9% increase at least provides some hope for investors that the company can rebound from poorer-than-expected 2017 guidance.
