Express, Inc. Reports Fourth Quarter and Full Year 2013 Results; Introduces First Quarter and Full Year 2014 Guidance

 Express, Inc. Reports Fourth Quarter and Full Year 2013 Results; Introduces
                  First Quarter and Full Year 2014 Guidance

- Fourth quarter comparable sales rose 1%

- Fourth quarter diluted EPS of $0.57 is within guidance range

- Inventory down 1% on an absolute basis; down 5% on a per square foot basis

- Introduces first quarter and full year 2014 EPS guidance ranges of $0.12 to
$0.18 and $1.03 to $1.23, respectively

PR Newswire

COLUMBUS, Ohio, March 12, 2014

COLUMBUS, Ohio, March 12, 2014 /PRNewswire/ --Express, Inc. (NYSE: EXPR), a
specialty retail apparel chain operating approximately 630 stores, today
announced fourth quarter and full year 2013 financial results. These results
cover the 13 and 52 week periods ended February 1, 2014 and compare to the 14
and 53 week periods ended February 2, 2013. Comparable sales for the fourth
quarter and full year 2013 were calculated using the 13 and 52 week periods
ended February 1, 2014 compared to the 13 and 52 week periods ended February
2, 2013, respectively.

EXPRESS Logo.

Michael Weiss, the Company's Chairman and Chief Executive Officer, noted that,
"Our fourth quarter results were within the range of our revised guidance but
disappointing nonetheless given the strength of our collection across both
genders. We delivered positive comps for the quarter, but the heavier than
planned pace of promotions impacted both top-line and margins. On the plus
side, we ended the quarter with lean inventories heading into Spring. We also
made advances in terms of three of our growth pillars. Specifically, we
continued to grow our E-Commerce business; opened new North American stores,
including our San Francisco flagship; and continued our international
expansion. We also laid the groundwork for our outlet initiative and plan to
open the first of these outlet stores in the beginning of May 2014."

Commenting on first quarter and full year 2014 guidance, Mr. Weiss noted that,
"We transitioned to Spring with multiple key items that are turning quickly
and an assortment that is highlighting important emerging trends. The start
of 2014 has nevertheless been extremely difficult, with traffic down
significantly, negative comparable sales and the promotional environment
remaining intense. Our first quarter guidance reflects year to date traffic
and comparable sales as well as our belief that a material uptick in traffic
is not necessarily imminent. This in turn leads us to believe that the
promotional environment will continue, and we have planned accordingly. Our
full year projections anticipate a return to EPS growth in the back half of
the year, but full year results will be impacted by a weak start to 2014 and
de-leveraging associated with our buying and occupancy and SG&A expenses. We
are working on a variety of initiatives to generate improved results and
remain committed to driving long-term shareholder value."

Fourth Quarter 2013 Operating Results (for the 13 week period ended February
1, 2014 compared to the 14 week period ended February 2, 2013):

  oNet sales for the fourth quarter were $715.9 million. Net sales for the
    fourth quarter of 2012 were $731.7 million, including approximately $27.0
    million related to the fourteenth week in last year's fourth quarter.
  oComparable sales (including e-commerce sales) increased 1% compared to a
    1.5% increase in last year's fourth quarter. E-commerce sales increased
    14% to $138.8 million in the fourth quarter of 2013 (13 weeks) compared to
    last year's 14 week fourth quarter.
  oGross margin as a percentage of net sales declined 300 basis points over
    last year's fourth quarter and represented 32.0% of net sales.
    Merchandise margin declined by 220 basis points reflecting the intensely
    promotional nature of the holiday period and January. Buying and
    occupancy costs as a percentage of sales rose by 80 basis points.
  oSelling, general, and administrative (SG&A) expenses were $144.1 million
    versus $144.4 million in last year's fourth quarter. As a percentage of
    net sales, SG&A expenses rose by 40 basis points to 20.1% compared to
    19.7% in last year's fourth quarter.
  oOperating income was $85.4 million, or 11.9% of net sales, compared to
    $111.4 million, or 15.2% of net sales, in the fourth quarter of 2012.
    Operating income in the fourth quarter of 2012 included approximately $5.2
    million related to the fourteenth week.
  oIncome tax expense was $31.8 million, at an effective tax rate of 39.9%,
    compared to $42.1 million, at an effective tax rate of 39.7% in last
    year's fourth quarter.
  oNet income was $47.9 million, or $0.57 per diluted share. This compares
    to net income of $63.9 million, or $0.75 per diluted share, in the fourth
    quarter of 2012, with 2012's fourteenth week contributing approximately
    $0.04 per diluted share.
  oReal estate activity for the fourth quarter of 2014 is detailed in
    Schedule 4.

Full Year 2013 Operating Results (for the 52 week period ended February 1,
2014 compared to the 53 week period ended February 2, 2013):

  oNet sales increased 3% to $2.2 billion. Prior year net sales included
    approximately $27.0 million associated with the 53^rd week.
  oComparable sales (including e-commerce sales) increased 3% while
    comparable sales in the prior year period were flat. E-commerce sales
    increased 25% to $340.6 million in 2013 (52 weeks) compared to last year's
    53 week period.
  oGross margin was 32.3% of net sales compared to 34.4% in 2012.
    Merchandise margins declined 120 basis points and buying and occupancy
    costs as a percentage of sales increased 90 basis points.
  oSG&A expenses were $504.3 million versus $491.6 million in 2012. As a
    percentage of net sales, SG&A expenses improved 10 basis points to 22.7%.
  oOperating income was $214.3 million, or 9.7% of net sales, compared to
    $251.6 million, or 11.7% of net sales, in the prior year period. Prior
    year operating income included approximately $5.2 million associated with
    the 53rd week.
  oIncome tax expense was $76.6 million, at an effective tax rate of 39.7%,
    compared to $92.7 million, at an effective tax rate of 40.0% in the prior
    year period.
  oNet income was $116.5 million, or $1.37 per diluted share, compared to net
    income of $139.3 million, or $1.60 per diluted share, in 2012, with 2012's
    53^rd week contributing approximately $0.04 per diluted share.

2013 Balance Sheet Highlights:

  oCash and cash equivalents totaled $311.9 million versus $256.3 million at
    the end of 2012.
  oCapital expenditures totaled $105.4 million, compared to $99.7 million in
    the prior year.
  oInventory was $212.5 million, a decrease of 1%, compared to $215.1 million
    at the end of 2012. Inventory per square foot decreased 5% compared to the
    end of 2012.

Classification of Sell-Off Revenue:
We have revised our presentation of revenue associated with the sell off of
end of season product to third parties. This resulted in a minor impact to our
previously reported revenue, cost of goods sold and gross profit percentage.
Sell-off revenue is now recorded in net sales rather than being netted against
our cost of goods sold, buying and occupancy costs. Gross profit dollars and
net income were unaffected. Please refer to Schedule 5 for details regarding
the impact of the reclassification in 2012 and 2013.

2014 Guidance:
The table below compares the Company's projected results for the thirteen week
period ended May 3, 2014 to the actual results for the thirteen week period
ended May 4, 2013. These projections do not take into account any actions we
will be taking with respect to our long-term debt, which we intend to
refinance in the near term.

                                    First Quarter 2014      First Quarter 2013

                                    Guidance                Actual Results
                                    Negative low double to
Comparable Sales                                            Flat
                                    negative high single
                                    digits
Effective Tax Rate                  40.0 - 41.0%            39.6%
Interest Expense, Net               $5.5 - $6 million       $4.8 million
Net Income                          $10 - $15 million       $32.4 million
Diluted Earnings Per Share (EPS)    $0.12 - $0.18           $0.38
Weighted Average Diluted Shares     84.5 million            85.5 million
Outstanding
See Schedule 4 for projected real estate activity.

The table below compares the Company's projected results for the fifty-two
week period ended January 31, 2015 to the actual results for the fifty-two
week period ended February 1, 2014.

                               Full Year 2014               Full Year 2013

                               Guidance                     Actual Results
                               Negative low single
Comparable Sales               digits to                    3%

                               flat
Effective Tax Rate             Approximately 40%            39.7%
Interest Expense, Net          $23 - $25 million            $19.5 million
Net Income                     $88 - $105 million           $116.5 million
Diluted EPS                    $1.03 - $1.23                $1.37
Weighted Average Diluted       85.1 million                 85.1 million
Shares Outstanding
Capital Expenditures           $110 - $115 million          $105.4 million
See Schedule 4 for projected real estate activity.
Consistent with previous years, the quarterly and full year guidance excludes
any non-core operating items that may occur.

Conference Call Information:
A conference call to discuss fourth quarter and 2014 results is scheduled for
Wednesday March 12, 2014, at 9:00 a.m. Eastern Time (ET). Investors and
analysts interested in participating in the call are invited to dial (877)
705-6003 approximately ten minutes prior to the start of the call. The
conference call will also be webcast live at: http://www.express.com/investor
and remain available for 90 days. A telephone replay of this call will be
available from 12:00 p.m. ET on March 12, 2014 until 11:59 p.m. ET on March
19, 2014 and can be accessed by dialing (877) 870-5176 and entering replay pin
number 13576286.

About Express:
Express is a specialty apparel and accessories retailer of women's and men's
merchandise, targeting the 20 to 30 year old customer. The Company has over 30
years of experience offering a distinct combination of fashion and quality for
multiple lifestyle occasions at an attractive value addressing fashion needs
across work, casual, jeanswear, and going-out occasions. The Company currently
operates approximately 630 retail stores, located primarily in high-traffic
shopping malls, lifestyle centers, and street locations across the United
States, in Canada, and in Puerto Rico. Express merchandise is also available
at franchise stores in the Middle East and Latin America. The Company also
markets and sells its products through the Company's e-commerce website,
www.express.com.

Forward-Looking Statements:
Certain statements are "forward-looking statements" made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include any statement that does not directly relate
to any historical or current fact and include, but are not limited to, (1)
guidance for the first quarter and full year 2014, including statements
regarding expected comparable sales, effective tax rates, interest expense,
net income, earnings per diluted share, and capital expenditures, (2)
statements regarding expected store openings, store closures, and gross square
footage, (3) statements regarding the Company's future plans and initiatives,
including plans to refinance the Company's long-term debt, and (4)
expectations regarding traffic and the promotional environment.
Forward-looking statements are based on our current expectations and
assumptions, which may not prove to be accurate. These statements are not
guarantees and are subject to risks, uncertainties and changes in
circumstances that are difficult to predict. Many factors could cause actual
results to differ materially and adversely from these forward-looking
statements. Among these factors are (1) changes in consumer spending and
general economic conditions; (2) our ability to identify and respond to new
and changing fashion trends, customer preferences and other related factors;
(3) fluctuations in our sales and results of operations on a seasonal basis
and due to store events, promotions and a variety of other factors; (4)
increased competition from other retailers; (5) changes in customer traffic at
malls and shopping centers; (6) our dependence upon independent third parties
to manufacture all of our merchandise; (7) changes in the cost of raw
materials, labor, and freight; (8) supply chain disruption; (9) our growth
strategy, including our international expansion plan; (10) our dependence on a
strong brand image; (11) our dependence upon key executive management; (12)
our reliance on third parties to provide us with certain key services for our
business; and (13) our substantial indebtedness and lease obligations.
Additional information concerning these and other factors can be found in
Express, Inc.'s filings with the Securities and Exchange Commission. We
undertake no obligation to publicly update or revise any forward-looking
statement as a result of new information, future events or otherwise, except
as otherwise required by law.





Schedule 1
Express, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
                                           February1, 2014  February2, 2013
ASSETS
CURRENT ASSETS:
Cash and cash equivalents                  $   311,884       $   256,297
Receivables, net                           17,384            11,024
Inventories                                212,510           215,082
Prepaid minimum rent                       28,554            25,166
Other                                      13,129            8,293
Total current assets                       583,461           515,862
PROPERTY AND EQUIPMENT                     767,661           625,344
Less: accumulated depreciation             (391,539)         (346,975)
Property and equipment, net                376,122           278,369
TRADENAME/DOMAIN NAME                      197,812           197,719
DEFERRED TAX ASSETS                        17,558            16,808
OTHER ASSETS                               7,717             10,441
Total assets                               $   1,182,670     $   1,019,199
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable                           $   154,736       $   176,125
Deferred revenue                           28,436            27,851
Accrued bonus                              694               336
Accrued expenses                           116,238           108,464
Total current liabilities                  300,104           312,776
LONG-TERM DEBT                             199,170           198,843
DEFERRED LEASE CREDITS                     114,509           91,491
OTHER LONG-TERM LIABILITIES                94,318            44,927
Total liabilities                          708,101           648,037
COMMITMENTS AND CONTINGENCIES
Total stockholders' equity                 474,569           371,162
Total liabilities and stockholders' equity $   1,182,670     $   1,019,199

Note: Certain prior period amounts have been reclassified or adjusted to
conform to current year presentation.



Schedule 2
Express, Inc.
Consolidated Statements of Income and Comprehensive Income
(In thousands, except per share amounts)
(Unaudited)
                    Thirteen Weeks  Fourteen Weeks  Fifty-Two     Fifty-Three

                    Ended           Ended           Weeks Ended   Weeks Ended
                    February1,     February2,     February 1,   February 2,

                    2014           2013           2014         2013
NET SALES           $   715,880     $   731,685     $ 2,219,125   $ 2,157,227
COST OF GOODS SOLD,
BUYING AND          486,762         475,872         1,501,418     1,414,588

OCCUPANCY COSTS
Gross profit        229,118         255,813         717,707       742,639
OPERATING EXPENSES:
Selling, general,
and administrative  144,112         144,375         504,277       491,599
expenses
Other operating
(income) expense,   (414)           30              (829)         (523)
net
Total operating     143,698         144,405         503,448       491,076
expenses
OPERATING INCOME    85,420          111,408         214,259       251,563
INTEREST EXPENSE,   5,065           5,215           19,522        19,552
NET
OTHER EXPENSE, NET  613             144             1,571         40
INCOME BEFORE       79,742          106,049         193,166       231,971
INCOME TAXES
INCOME TAX EXPENSE  31,816          42,106          76,627        92,704
NET INCOME          $   47,926      $   63,943      $ 116,539     $ 139,267
OTHER COMPREHENSIVE
INCOME:
Foreign currency
translation (loss)  (950)           33              (708)         (13)
gain
COMPREHENSIVE       $   46,976      $   63,976      $ 115,831     $ 139,254
INCOME
EARNINGS PER SHARE:
Basic               $   0.57        $   0.75        $ 1.38        $ 1.60
Diluted             $   0.57        $   0.75        $ 1.37        $ 1.60
WEIGHTED AVERAGE
SHARES OUTSTANDING:
Basic               83,837          84,944          84,466        86,852
Diluted             84,609          85,320          85,068        87,206

Note: Certain prior period amounts have been reclassified or adjusted to
conform to current year presentation.



Schedule 3
Express, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
                                                        2013        2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                              $ 116,539   $ 139,267
Adjustments to reconcile net income to net cash
provided by operating

activities:
Depreciation and amortization                           69,810      67,727
Loss on disposal of property and equipment              670         124
Impairment charge                                       26          6
Excess tax benefit from share-based compensation        (210)       (422)
Share-based compensation                                21,174      16,308
Deferred taxes                                          (807)       3,937
Landlord allowance amortization                         (9,342)     (8,166)
Changes in operating assets and liabilities:
Receivables, net                                        (6,508)     (1,991)
Inventories                                             2,133       (1,997)
Accounts payable, deferred revenue, and accrued         (28,973)    17,564
expenses
Other assets and liabilities                            30,563      37,007
Net cash provided by operating activities               195,075     269,364
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures                                    (105,368)   (99,674)
Purchase of intangible assets                           (94)        (210)
Net cash used in investing activities                   (105,462)   (99,884)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligation                    (313)       (55)
Excess tax benefit from share-based compensation        210         422
Proceeds from share-based compensation                  4,701       623
Repurchase of common stock                              (37,929)    (66,541)
Net cash used in financing activities                   (33,331)    (65,551)
EFFECT OF EXCHANGE RATE ON CASH                         (695)       6
NET DECREASE IN CASH AND CASH EQUIVALENTS               55,587      103,935
CASH AND CASH EQUIVALENTS, Beginning of period          256,297     152,362
CASH AND CASH EQUIVALENTS, End of period                $ 311,884   $ 256,297

Note: Certain prior period amounts have been reclassified or adjusted to
conform to current year presentation.



Schedule 4
Express, Inc.
Real Estate Activity
(Unaudited)
Fourth Quarter 2013 - Actual
Company-Operated Stores    Opened Closed
United States              3      —
Canada                     1      —
Total                      4      —
Full Year 2013 - Actual                              February 1, 2014 - Actual
                                                                 Gross Square
Company-Operated Stores    Opened Closed             Store Count
                                                                 Footage
United States              12     (9)                617
Canada                     4      —                  15
Total                      16     (9)                632         5.5 million
First Quarter 2014 - Projected                       May 3, 2014 - Projected
                                                                 Gross Square
Company-Operated Stores    Open   Close  Conversion  Store Count
                                                                 Footage
United States - Retail     2      (9)    (15)        595
Stores
United States - Outlet     2             15          17
Stores
Canada                     1      —      —           16
Total                      5      (9)    —           628         5.5 million
Full Year 2014 - Projected                           Full Year 2014 -
                                                     Projected
                                                                 Gross Square
Company-Operated Stores    Open   Close  Conversion  Store Count
                                                                 Footage
United States - Retail     8      (15)   (15)        595
Stores
United States - Outlet     16            15          31
Stores
Canada                     2      —      —           17
Total                      26     (15)   —           643         5.6 million



Schedule 5
Express, Inc.
Classification of Sell-Off Revenue
(Unaudited)
                    2013 Quarter
                    First            Second          Third
                    (in thousands, except percentages)
Net sales, as       $508,524         $486,158        $502,992
previously reported
Sell-off adjustment 838              3,917           816
Adjusted net sales  $509,362         $490,075        $503,808
Cost of goods sold,
buying and
occupancy           $337,747         $333,611        $337,727

costs, as
previously reported
Sell-off adjustment 838              3,917           816
Adjusted Cost of
goods sold, buying  $338,585         $337,528        $338,543
and occupancy costs
Gross profit        $170,777         $152,547        $165,265
Gross profit %, as  33.6%            31.4%           32.9%
previously reported
Adjusted gross      33.5%            31.1%           32.8%
profit %
                    2012 Quarter
                    First            Second          Third          Fourth
                    (in thousands, except percentages)
Net sales, as       $495,952         $454,879        $468,527       $728,711
previously reported
Sell-off adjustment 1,269            3,984           931            2,974
Adjusted net sales  $497,221         $458,863        $469,458       $731,685
Cost of goods sold,
buying and          $307,185         $308,358        $316,989       $472,898
occupancy costs, as
previously reported
Sell-off adjustment 1,269            3,984           931            2,974
Adjusted Cost of
goods sold, buying  $308,454         $312,342        $317,920       $475,872
and occupancy costs
Gross profit        $188,767         $146,521        $151,538       $255,813
Gross profit %, as  38.1%            32.2%           32.3%          35.1%
previously reported
Adjusted gross      38.0%            31.9%           32.3%          35.0%
profit %
The classification of sell-off revenue was revised during the fourth quarter
of 2013, moving the income from cost of goods sold, buying and occupancy costs
to net sales. Previous quarters have been adjusted as noted above to conform
to current presentation.



Logo: http://photos.prnewswire.com/prnh/20130910/NY76292LOGO

SOURCE Express, Inc.

Website: http://www.express.com
Contact: Investor Contacts: Marisa Jacobs, Express, Inc., Vice President
Investor Relations, (614) 474-4465 or Allison Malkin / Anne Rakunas, ICR,
Inc., (203) 682-8225 / (310) 954-1113; Media Contact: Amy Hughes, Express,
Inc., Corporate Communications & Events, (614) 474-4325
 
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