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Based in Columbus, OH, Express Inc. is a specialty men’s and women’s retailer that’s found predominately in malls and shopping centers in the U.S. The company’s core customer is in their 20s and 30s, and offers work, casual, and going-out apparel.
Q3 Earnings Recap
Non-GAAP earnings sunk to a loss of $1.17 per share and revenue fell over 34% year-over-year to $322 milllion.
Comparable store sales plunged to -30% for the quarter, as demand for wear-to-work and occasion-based apparel items continue to be weak.
Looking at liquidity, Express ended the quarter with $107 million cash, and the company completed an additional 10% workforce reduction. This will help reduce expenses in 2021 by about $13 million.
While brick-and-mortar performance remains dismal, the retailer’s digital operations are gaining momentum. Q3 digital transactions increased 17% year-over-year, and conversion is up 10% over the prior year.
“As we move into 2021, we remain focused on delivering our long-term goal of a mid-single digit operating margin and profitable growth,” said CEO Tim Baxter.
Bottom Line
EXPR is now a Zacks Rank #5 (Strong Sell).
Two analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 97 cents to a loss of $5.05 per share; earnings and sales are expected to experience major year-over-year declines for fiscal 2021, though the outlook looks brighter for fiscal 2022.
EXPR reports earnings in a few weeks, so investors should be aware that these figures could change.
Shares are down over 20% in the past one-year period, but have skyrocketed about 250% year-to-date.
Just like GameStop (GME - Free Report) and AMC Entertainment (AMC - Free Report) , EXPR is a heavily-shorted stock (short interest stood at 13% last week) that Reddit traders took a unique interest in recently. This resulted in a bid to drive the price up in order to squeeze out hedge funds short-covering the stock.
But the WallStreetBets short squeeze is unraveling, and EXPR plunged over 32% on Monday.
Looking at its business, Express faces some tough headwinds going forward, mainly the lack of desire for its core apparel products.
Management is still focusing on building sufficient liquidity, as well as its long-term objective of sustained profitable growth. However, until the underlying uncertainty from the pandemic eases, it may be a rocky ride for Express for a little while longer.
Investors who are interested in adding a similar retail stock to their portfolio could consider mall staple Abercrombie & Fitch (ANF - Free Report) . ANF is a #1 (Strong Buy) on the Zacks Rank, and analysts are bullish on the retailer’s prospects, with eight increasing their earnings expectations for the current fiscal year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Bear of the Day: Express (EXPR)
Based in Columbus, OH, Express Inc. is a specialty men’s and women’s retailer that’s found predominately in malls and shopping centers in the U.S. The company’s core customer is in their 20s and 30s, and offers work, casual, and going-out apparel.
Q3 Earnings Recap
Non-GAAP earnings sunk to a loss of $1.17 per share and revenue fell over 34% year-over-year to $322 milllion.
Comparable store sales plunged to -30% for the quarter, as demand for wear-to-work and occasion-based apparel items continue to be weak.
Looking at liquidity, Express ended the quarter with $107 million cash, and the company completed an additional 10% workforce reduction. This will help reduce expenses in 2021 by about $13 million.
While brick-and-mortar performance remains dismal, the retailer’s digital operations are gaining momentum. Q3 digital transactions increased 17% year-over-year, and conversion is up 10% over the prior year.
“As we move into 2021, we remain focused on delivering our long-term goal of a mid-single digit operating margin and profitable growth,” said CEO Tim Baxter.
Bottom Line
EXPR is now a Zacks Rank #5 (Strong Sell).
Two analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen 97 cents to a loss of $5.05 per share; earnings and sales are expected to experience major year-over-year declines for fiscal 2021, though the outlook looks brighter for fiscal 2022.
EXPR reports earnings in a few weeks, so investors should be aware that these figures could change.
Shares are down over 20% in the past one-year period, but have skyrocketed about 250% year-to-date.
Just like GameStop (GME - Free Report) and AMC Entertainment (AMC - Free Report) , EXPR is a heavily-shorted stock (short interest stood at 13% last week) that Reddit traders took a unique interest in recently. This resulted in a bid to drive the price up in order to squeeze out hedge funds short-covering the stock.
But the WallStreetBets short squeeze is unraveling, and EXPR plunged over 32% on Monday.
Looking at its business, Express faces some tough headwinds going forward, mainly the lack of desire for its core apparel products.
Management is still focusing on building sufficient liquidity, as well as its long-term objective of sustained profitable growth. However, until the underlying uncertainty from the pandemic eases, it may be a rocky ride for Express for a little while longer.
Investors who are interested in adding a similar retail stock to their portfolio could consider mall staple Abercrombie & Fitch (ANF - Free Report) . ANF is a #1 (Strong Buy) on the Zacks Rank, and analysts are bullish on the retailer’s prospects, with eight increasing their earnings expectations for the current fiscal year.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>