Express Drops After Profit Forecast Falls Short of EstimatesLindsey Rupp
Express Inc., a retail chain with about 630 stores, tumbled the most in three months after the company forecast lower-than-anticipated sales and profit, citing an “extremely difficult” start to the year.
Earnings will be $1.03 to $1.23 a share this year, the Columbus, Ohio-based company said today in a statement. Analysts had estimated $1.58 on average, according to data compiled by Bloomberg. Comparable-store sales may fall in the low-single digits, Express said, compared with the 2.4 percent growth analysts predicted.
The retail industry is relying on heavy discounting to draw shoppers, hurting margins at chains like Express. Foot traffic also is down at shopping malls, where the retailer does much of its business. Still, Chief Executive Officer Michael Weiss said he expects growth to resume in the second half of the year and the company is coming into spring with lean inventories.
“The start of 2014 has nevertheless been extremely difficult, with traffic down significantly, negative comparable sales and the promotional environment remaining intense,” he said in the statement. “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.”
Express shares plunged 12 percent to $16.05 at the close of trading in New York, the biggest decline since Dec. 4. The stock has dropped 14 percent this year.