May 22 (Bloomberg) -- Express Inc., the apparel retailer targeting 20- to 30-year-olds, fell the most since its market debut two years ago after forecasting full-year profit that trailed analysts’ estimates.
Express, which went went public in May 2010, dropped 27 percent to $16.76 at the close in New York. The stock was the second-worst performer in the Russell 2000 Index.
The retailer, based in Columbus, Ohio, has been expanding while shuttering less profitable stores and its updated annual outlook reflects certain non-cash expenses from delays in opening two flagship locations in San Francisco and New York, according to a statement today.
“We had anticipated these locations would open ahead of holiday 2012,” Chief Executive Officer Michael Weiss said on a conference call. “We now plan to open both flagship stores in fall 2013, possibly sooner.”
Express projected profit excluding certain items of $1.79 to $1.89 this year. Analysts had estimated $1.95, according to a Bloomberg survey.
Express, which spent more on new initiatives and sourcing costs in the first quarter and on a loyalty program for U.S. stores, aims to end the year with 627 locations from 606 at the end of the first quarter, according to the statement.
The company was controlled by private-equity firm Golden Gate Capital beginning in 2007 until May 2010, when the company raised $272 million by selling 16 million shares at $17 each. The retailer brought in $2.07 billion in sales last year, with about 65 percent coming from women’s merchandise and the remainder from men’s.
First-quarter net income rose to $42.1 million, or 47 cents per share, from $35 million, or 39 cents, a year earlier. Analysts had projected profit of 49 cents a share, according to a Bloomberg survey.
The retailer reported first-quarter sales of $496 million, a 6 percent increase from a year earlier, according to today’s statement. Analysts had estimated $503.1 million in the Bloomberg survey.
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