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Last Update: 13-Mar-13 07:53 ET
Express shares fall 12% following downside guidance for FY14
Express (EXPR $16.39 -2.46) reported fourth quarter earnings of $0.75 per share, $0.01 better than the Capital IQ consensus of $0.74 -- co raised Q4 EPS to $0.72-74 from $0.62-0.68 on Jan 14, while revenues rose 8.2% year/year to $728.7 million versus the $726.62 mln consensus. Comparable sales, which compares the fourteen week period ended February 2, 2013 to the fourteen week period ended February 4, 2012 and is inclusive of e-commerce sales, increased 1.5%, following a 5% increase in 4Q12; Gross margin was 35.1% of net sales compared to 37.2% in 4Q12. The company issued downside guidance for Q1, sees EPS of $0.34-0.38 versus the $0.46 Capital IQ Consensus Estimate, guidance assumes some degradation of merchandise margin in addition to approximately $4.0 million before tax of incremental expense related to pre-opening rent for flagship locations and additional fulfillment costs reflecting the expected increase in our e-commerce business. The co expects Q1 comparable sales, including e-commerce, to range from flat to down low single digits (vs. ests of <+1%) compared to an increase of 4% in 1Q13. Co issues downside guidance for FY14, sees EPS of $1.40-1.54 versus the $1.70 Capital IQ Consensus Estimate,including approximately $8.0 million before tax of incremental expense related to pre-opening rent for flagship locations. The co sees FY13 comparable sales, including e-commerce, to increase low single digits (vs. ests of up ~2.5%) compared to a flat performance in FY13. "While our guidance anticipates a softer start to the year, reflecting the impact of reduced traffic levels and consumer spending in the month of February, our spring merchandise has been received favorably by our customers, resulting in an improvement in conversion, which we do consider to be a leading indicator, early in the first quarter."
