Express, which operates more than 600 apparel stores, said net income dropped to $17.4 million (20 cents per share), compared to $32.7 million (37 cents per share) a year earlier. Sales also decreased 3.8 percent to $468.5 million. However, the results were largely expected as Express downgraded its forecast in October to 16 cents to 20 cents a share. Analysts polled by Thomson Reuters expected revenue of $469 million.
Michael Weiss, chief executive officer explains, “As we begin the fourth quarter, we are pleased to report that our clear promotional messaging contributed to a record Black Friday performance that exceeded our expectations. However, we remain cautious on the overall performance of the fourth quarter given that the majority of the holiday season lies ahead. We expect to make sequential improvement as our corrective measures get further underway.”
Looking forward, Express lowered guidance for the year to $1.47 to $1.53 per share, compared to its August estimate of $1.69 to $1.79. Wall Street was only expecting full year earnings of about $1.40 a share, though.
How Did Investors React to the Results?
Shares of American Eagle ripped more than 7 percent higher on Wednesday, while Express surged more than 10 percent. Other retailers such as J.C. Penney (NYSE:JCP) and Macy’s (NYSE:M) also climbed higher on the news. Aeropostale (NYSE:ARO), which reports its quarterly results late Wednesday, also gained 5 percent ahead of the closing bell.
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