Express, Inc. continues to struggle as its mall based stores try and find their footing. This Zacks Rank #5 (Strong Sell) recently gave disappointing 2018 guidance.

Express is a specialty retailer of men's and women's apparel and accessories. It targets the younger demographic aged 20 to 30 years old.

As of the end of 2017, it operates 635 Express and Express Factory Outlet stores in malls, lifestyle centers and street locations in the United States and Puerto Rico

A Fourth Quarter Earnings Beat

On Mar 14, Express reported its fiscal fourth quarter 2017 results and beat the Zacks Consensus by 2 cents.

Earnings were $0.34 compared to the Zacks Consensus of $0.32.

Sales rose 2% to $693.8 million from $678.8 million in the fourth quarter of 2016 but 2017 was operating in a 53 week period, versus a 54 week the year before. The extra week does make a big difference to the retailers.

Comparable sales, one of the key retail metrics, fell 1% compared to a decrease of 13% in the year ago quarter. The comps included e-commerce sales.

E-commerce, however, was a bright spot. It rose 20% to $203.3 million and on a comparable sales basis, e-commerce sales were up 17%.

Express also increased its merchandise margin by 130 basis points due to sourcing-related cost savings.

Guides Fiscal 2018 Under Consensus

All of this sounds good. While comps were still negative on the holiday quarter, they were a sharp improvement over the prior year results.

However, Express gave cautious full year guidance.

It sees fiscal 2018 comparables between -1% to 1%.

Earnings are expected in the range of $0.32 to $0.46.

The Zacks Consensus was looking for $0.50 so it's not surprising that 3 analysts cut estimates. That pushed the new Zacks Consensus down to $0.41, which is in line with the new guidance.

That's still an earnings gain of 13.9% from 2017, where the company made $0.36.

But those estimate cuts are what results in the Zacks Rank #5 (Strong Sell) designation.

Express is also still trying to get its mix right. It has been closing the traditional Express stores and re-opening many of them as remodeled Express Factory Outlet stores.

For example, in fiscal 2018, it expects to close 36 traditional stores but rebrand 28 of them as outlets.

By the end of fiscal 2018, it expects that 28% of its stores will be the outlets which sells its own proprietary merchandise.

Express is Shareholder Friendly

Despite its recent problems, the company finished 2017 with $207.4 million cash and cash equivalents on hand.

It has no debt, which is rare for a retailer, and generates solid cash flow.

Through the week of Feb 3, 2018, it repurchased about 2.1 million shares for $17.3 million under a $150 million share repurchase program authorized in November 2017.

Subsequent to the year end, it purchased another $8 million, or 1.1 million shares and has $125 million remaining under the authorization.

Shares Continue to Sink

It's been tough being a shareholder of Express over the last 2 years.

Shares are down 66% during that time, while the S&P 500 has returned 30%.

Year-to-date, they've fallen another 23.5%.

Are they a deal?

Express is trading with a forward P/E of 17.4. That's about in line with the S&P 500 so it's not exactly "cheap" right now.

If you're going to buy a specialty retailer, check out one with a better Zacks Rank such as Gap, Inc. which is a Zacks Rank #2 (Buy) or Canada Goose (GOOS Quick QuoteGOOS - Free Report) , which is a Zacks Rank #3 (Hold).

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