Express Inc.’s shares soared as much as 16 percent to $16.95 Wednesday, its biggest intraday gain since June 13, following news that it raised its EPS forecast for the year to $0.85 – $0.95 from $0.74 – $0.90.
The uplifting forecast was a bright spot in the specialty chain’s otherwise disappointing second quarter 2014 results. On Tuesday, Express reported net income plummeted 59 percent to $6.9 million in the second quarter ended Aug. 2, compared to $16.9 million in Q2 2013. The 630-unit retailer saw comparable sales, including e-commerce sales, dip 5 percent, compared to the prior year period’s 6 percent increase. However, new Express Factory Outlet stores exceeded the company’s expectations.
Express Inc. chairman and chief executive officer, Michael Weiss, said, “In light of the difficult environment, we feel very good about the progress made during the second quarter and delivering earnings that exceeded the high end of our guidance. With 17 of our 20 Express Factory Outlet stores open for approximately four months, we are delighted to see them continuing to exceed our expectations from both a revenue and a margin contribution perspective.”
He added, “In our full priced retail stores, we managed promotions in a manner that enabled us to deliver merchandise margins that were better than we initially expected. As new receipts flowed in during the second quarter, certain categories reversed their declines and others grew nicely. Looking ahead to the back half of the year, the opportunity remains to drive further sequential improvements in both sales and profits, while simultaneously continuing our disciplined approach to inventory units and input costs.”