Express Shares Fall After Weak Traffic Hurts Profit ForecastBy
Express Inc. fell as much as 26 percent after cutting its annual profit forecast, saying its stores are suffering from weak customer foot traffic.
Earnings this fiscal year will be $1 to $1.14 a share, excluding some items, the Columbus, Ohio-based company said Wednesday in a statement. That’s down from Express’s previous projection of $1.41 to $1.54 and trails analysts’ $1.46 average prediction.
Clothing retailers like Express, which targets customers in their 20s and 30s, have been hurt by consumers’ shift away from shopping at malls to buying more online. Express Chief Executive Officer David Kornberg said traffic at the company’s stores last quarter was “challenging.” Profit in the second quarter, which ended July 30, was 13 cents a share, and sales were $504.8 million. Analysts estimated profit of 17 cents on revenue of $521.2 million.
The shares fell as low as $11.89 in New York, the biggest intraday decline since May 2012. Express already had slumped 7.2 percent this year through Tuesday.
Shares of rival retailers fell as well. Guess? Inc. slid as much as 7 percent to $14.77. Ascena Retail Group Inc. -- the owner of Ann Taylor, Maurices and Dressbarn -- fell as much as 3.8 percent.
Kornberg said the company’s fall assortment is “more cohesive” and identifies the important trends. Express also will pursue several marketing initiatives to win new customers and retain loyal shoppers, he said.