29 Aug Express sales, net income rise in second quarter
Higher sales during the second quarter helped propel Express shares up 11 percent in morning trading.
The report marked the Columbus-based fashion retailer as a rarity in a sector that has been characterized by weak sales during the summer.
“Our customers are responding enthusiastically to our assortments, which are trend-right, differentiated and well-edited,” said Michael Weiss, chairman and CEO of Express. “We delivered a very solid second quarter.”
Sales increased to $486.2 million from $454.9 million in the second quarter last year. Wall Street analysts had expected sales of $485 million. Net income rose to $16.9 million, or 20 cents a share, in the recent quarter compared with $15.8 million, or 18 cents a share a year ago.
Comparable store sales, a key indicator of a retailer’s health, increased 6 percent, up from a 1 percent rise last year at the same time. The rise included a 27 percent increase in online sales, an area in which Express expects to continue to see growth.
Express also expects to see growth in other areas, including its recent foray into outlet stores.
“We took concrete steps to prepare for the launch of our outlet business in the second quarter of 2014,” Weiss said, “which represents another opportunity to drive significant top and bottom line growth.”
In the spring, Express plans to launch about 15 stores into the outlet area by converting some regular stores and some current outlet stores that liquidate existing product into a new group of outlet stores that offer merchandise specifically produced for those locations.
“We’re one of the few in retail that have not taken advantage of this opportunity,” said Matthew Moellering, CFO at Express. “We think there’s a big upside for us.”
The company believes it can add at least 100 outlet stores, “if not more,” Moellering said.
For the second time in the year, Express raised its prediction for the next quarter and for the full year. The retailer now predicts third-quarter profits of 21 cents to 26 cents per share, while analysts have predicted 25 cents per share. For the year, Express expects profits of $1.52 to $1.60 per share. Analysts had been predicting $1.59 per share.