What: Shares of Express (NYSE:EXPR) were up nearly 18% at noon Wednesday after the specialty apparel retailer reported better-than-expected second-quarter results and raised its full-year 2015 outlook.
So what: Quarterly revenue climbed 11% year over year to $535.6 million, helped by a 7% increase in comparable-store sales and a 21% jump in e-commerce revenue. Meanwhile, net income more than tripled over the same period to $21 million, or $0.25 per diluted share. Analysts, on average, were only anticipating revenue of $504.8 million, and net income of $0.16 per share.
Express CEO David Kornberg credited the solid same-store sale performance to Express' "strong fashion supported by brand-focused marketing and an elevation of our customer experience," while effective inventory management and a positive consumer response to the company's product assortment allowed Express to limit promotions.
Now what: "Looking toward the second half of the year," Kornberg added, "I believe we are well positioned to further grow our business and enhance the Express brand. We expect the continued execution of our strategy to result in productivity and profitability gains for our Company and increased value for our shareholders."
For the full year, Express now anticipates comparable sales growth in the mid-single digits (up from previous guidance for low single digits), adjusted net income of $111 million to $117 million (up from $95 million to $104 million previously), and adjusted earnings per diluted share of $1.30 to $1.37 (up from $1.11 to $1.22). By comparison, Wall Street was modeling fiscal 2015 adjusted earnings of $1.21 per share.
In the end, given Express' solid second-quarter beat and significantly raised outlook, and with shares currently trading at a reasonable 14.8 times next year's expected earnings, it's hard to blame the market for bidding up shares today. Keeping in mind consensus estimates will almost certainly rise as analysts have time to fully digest this morning's news, I won't be be the least bit surprised if Express stock continues rising from here.