What happened
Shares of Express Inc. (EXPR) were up 24.2% as of 12:45 p.m. EDT Wednesday after the clothing retailer announced better-than-expected second-quarter 2017 results. More specifically, Express' revenue fell 5% year over year, to $478.5 million, including a 4% decline in comparable sales. On the bottom line, that translated to a GAAP net loss of $11.8 million, or $0.15 per share.
But on an adjusted (non-GAAP) basis -- which excludes costs related to its exit of the Canada business -- Express generated net income of $746,000, or $0.01 per share. Analysts, on average, were anticipating an adjusted loss of $0.01 per share on revenue of $474.1 million.
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So what
"Comparable sales and earnings were at the top end of our guidance, as our key initiatives gained further traction," added Express CEO David Kornberk. "Our e-commerce performance was outstanding, increasing 28% over last year, and store comps showed further sequential improvement."
E-commerce grew to represent 19% of Express' total sales. Express also closed 40 retail locations, converting 19 of those locations to its outlet format, and opened four additional outlet locations in its effort to continue optimizing its store base.
Now what
Looking ahead to the full year of 2017, Express reiterated expectations for a negative low-single-digit change in comparable sales, and for adjusted net income per diluted share in the range of $0.41 to $0.48. But perhaps most encouraging, Kornberg added that the company believes the momentum of its initiatives will "continue to build and contribute more meaningfully" in the second half of the year. Express also remains on track to deliver $20 million in savings through cost-management efforts this year.
In the end, there was nothing not to like about Express' performance as it works to navigate today's tough retail environment. Shares were trading near 52-week lows going into this report, so it makes sense to see investors aggressively bidding up Express stock right now.
