Specialty apparel retailer Express Inc. (EXPR) on Wednesday reported a 59 percent decline in profit for the second quarter from last year, reflecting lower sales and margins.
However, earnings per share for the quarter beat analysts' estimates and the company raised its earnings outlook for fiscal 2014. Shares of the company are gaining more than 13 percent in pre-market trades.
Michael Weiss, Chairman and Chief Executive Officer of Express said, "In light of the difficult environment, we feel very good about the progress made during the second quarter and delivering earnings that exceeded the high end of our guidance. With 17 of our 20 Express Factory Outlet stores open for approximately four months, we are delighted to see them continuing to exceed our expectations from both a revenue and a margin contribution perspective."
Columbus, Ohio-based Express' net income for the second quarter was $6.87 million or $0.08 per share, down from $16.91 million or $0.20 per share last year. On average, seventeen analysts polled by Thomson Reuters expected the company to report breakeven earnings per share for the quarter.
Net sales for the quarter declined 2 percent to $481.42 million from $490.08 million a year ago. Analysts had a consensus revenue estimate of $457.10 million for the quarter.
Comparable sales during the quarter, including e-commerce sales, decreased 5 percent. This compared to a comparable sales increase of 6 percent in the year-ago period. E-commerce sales rose 3 percent to $61.8 million.
Gross margin as a percentage of net sales declined 280 basis points from last year to 28.3 percent. Merchandise margin declined by 70 basis points.
Looking ahead to the third quarter, Express forecast net earnings of $11 million to $15 million, or $0.13 to $0.18 per share, and comparable sales in negative low-single digits. Analysts expect the company to report earnings of $0.16 per share for the quarter.
For fiscal 2014, Express now expects earnings of $0.85 to $0.95 per share, up from the prior range of $0.74 to $0.90 per share. The company, however, maintained its annual comparable sales outlook of negative mid-single digits growth. Street expects the company to earn $0.81 per share for the year.
EXPR closed Tuesday's trading at $14.59. In Wednesday's pre-market activity, the stock is up $1.97 or 13.50 percent to $16.56.
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