Express swings to loss in Q3, comparable sales drop 5 percent

Third quarter net sales at Express, Inc. decreased 5 percent to 488.5 million dollars with consolidated comparable sales down 5 percent. The company said in a statement that comparable retail sales, which include both Express stores and e-commerce, decreased 5 percent compared to the third quarter of 2018. In total, retail sales decreased to 356.8 million dollars and comparable outlet sales decreased 5 percent versus the third quarter of 2018. In total, outlet sales increased to 114.1 million dollars from 108.4 million dollars in the third quarter of 2018.

“While we are certainly not satisfied with our results, sequential improvement over the last two quarters, and throughout the third quarter is compelling evidence that the immediate changes we have been able to make to our product, merchandising and marketing approach are resonating with customers,” said Tim Baxter, Chief Executive Officer of the company.

Highlights of Q3 results at Express and outlook

The company added that gross margin contracted 250 basis points to 28.2 percent of net sales compared to 30.7 percent in last year’s third quarter, which was driven by a 140 basis point decrease in merchandise margin and 110 basis point increase in buying and occupancy costs as a percentage of net sales.

Loss before taxes was 6 million dollars compared to income before taxes of 10.2 million dollars in the third quarter of 2018. Net loss was 3.1 million dollars or 5 cents per diluted share compared to net income of 8 million dollars or 11 cents per diluted share, in the third quarter of 2018. Excluding costs related to former executive departures, adjusted net loss was 1.8 million dollars or 3 cents per diluted share in the third quarter of 2019.

For the fourth quarter, Express expects comparable sales to drop in the range of 1 percent to 3 percent, net income in the range of 10.5 to 13.5 million dollars and diluted EPS in the range of 16 to 21 cents.

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