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Express Shares Rally on Earnings Outlook (EXPR)

Shares of Express Inc. (NYSE: EXPR), a specialty apparel and accessory retailer offering both women’s and men’s merchandise, have risen sharply in trading today after the company’s full-year profit forecast beat Street estimates. The company also reported its third-quarter financial results.

For the full year, EXPR said that it expects adjusted earnings to be between $1.47 per share and $1.53 per share. This is down from the previous guidance range of $1.69-$1.79 per share. However, the lowered profit outlook is well above the consensus forecast of $1.40 per share.

For the third quarter ended October 27, 2012, EXPR reported net sales of $468.5 million, down 4% over the same period in the previous year. The company’s comparable store sales for the quarter fell 5%. Gross margin for the third quarter was 32.3%, down from 36.2% reported for the same period in the previous year.

EXPR reported third-quarter operating income of $34.4 million, compared to $60.9 million reported for the same period in the previous year. Net income for the quarter was $17.4 million, or $0.20 per share, compared to net income of $32.7 million, or $0.37 per share reported for the same period in the previous year.

Michael Weiss, Chairman and CEO of Express, said that the third quarter was a very challenging one for EXPR. Weiss said that the company is disappointed with the third-quarter results, however, the company believes that it has identified the issues impacting its performance and developed and begun to execute, a plan to fix them.

Weiss added that as the company begins the fourth quarter, it is pleased to report that its clear promotional messaging contributed to record Black Friday performance that exceeded expectations.

EXPR shares rose to an intra-day high of $14.82 in trading today. At last check, the stock was trading 9.85% higher at $14.27 on above average volume of 7.86 million.

Year-to-date, EXPR shares have fallen more than 28%, underperforming the S&P 500.

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