Express reports flat Q1 net sales, comparable sales up 3 percent

Express net sales for the first quarter of 2016 of 502.9 million dollars were essentially flat compared to net sales of 502.4 million dollars in the first quarter of 2015. Comparable sales including e-commerce sales decreased 3 percent.

Commenting on the results, David Kornberg, the company's President and CEO, noted, “In the first quarter, we delivered increased merchandise margin, expansion in gross margin, and higher diluted earnings per share in line with our guidance through the disciplined execution of our strategy. Looking ahead we remain focused on our key initiatives: delivering great fashion; acquiring new customers; optimizing inventory; implementing systems; and maintaining our balanced financial architecture.”

First quarter operating results

E-commerce sales declined 1 percent to 77 million dollars. Merchandise margin rose by 20 basis points despite weak demand. Buying and occupancy as a percentage of net sales improved by 10 basis points. In combination, this resulted in a 30 basis point improvement in gross margin, representing 33.4 percent of net sales compared to 33.1 percent in last year’s first quarter.

Operating income was 31.8 million dollars, or 6.3 percent of net sales, compared to 33.9 million dollars or 6.8 percent of net sales in the first quarter of 2015. Net income was 12.9 million dollars, or 0.16 dollar per diluted share. This compares to net income of 13.1 million dollars or 0.15 dollar per diluted share, in the first quarter of 2015.

Second quarter and fiscal 2016 guidance

For the thirteen week period ended July 30, 2016, the company expects comparable store sales to be negative mid-single digits, net income to be between 12 dollars and 15 million dollars and diluted earnings per share to be between 0.15 dollar to 0.19 dollar.

For fiscal year ending January 30, 2016, Express anticipates comparable store sales to be negative mid to low single digits, net income to be between 106 dollars to 116 million dollars, adjusted net income to be between 113 dollars to 123 million dollars, diluted EPS to range between 1.32 dollars to 1.45 dollars and adjusted diluted EPS to be between 1.41 dollars and 1.54 dollars.

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