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Express’ stock rallies after strong Q2 earnings and sales

By Angela Gonzalez-Rodriguez

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The U.S. retailer enjoyed a price rally during early trading after it posted strong earnings and comparable sales for the second quarter. As a result, the company’s shares gained 20 percent Wednesday morning.

The results came in at the highest end of market’s predictions, boosted by strong online sales. “Our e-commerce performance was outstanding,” David Kornberg, president and CEO said, increasing 28 percent over last year to 90 million dollars during the quarter. The e-commerce division now accounts for 19 percent of the retailer’s sales.

On the other hand, sales were down from 504.8 million dollars to 478.5 million in the second quarter last year, while comparable-store sales decreased 4 percent. This decrease, however marked an improvement from previous year’s same quarter’s 8 percent dip.

Express reported a loss for the quarter of 11.8 million dollars, or 15 cents a share, falling short from the 10.1 million dollars, or 13 cents a share noted during the same quarter last year. On an adjusted basis, however, per-share earnings were 1 cent, compared with a loss of 1 cent expected by analysts from research firm FactSet.

Heavy discounts continued to dent margins. The retailer remains optimistic about the near future, expecting the second half of the year to be better, according to the company’s CEO. “We are optimistic about our ability to drive further improved performance in a transforming retail industry,” he said.

Express is embarked on an overhauling plan that includes closing 40 retail stores during the quarter, 19 of which were converted to outlet stores.

Express