Shares of fashion retailer Express have seen better days. And in a difficult environment, its poor holiday-quarter results have investors wondering whether they’re headed for zero. 🤔
The company’s loss per share of $0.63 beat the $0.72 expected. However, revenues of $514.3 million fell well short of the $536.68 million estimate.
Executives’ strategy to elevate the brand with higher average unit retails and reduced promotions had worked well in the first half of 2022. However, the weakening macroeconomic environment, inflationary pressures, and changing consumer preferences challenged that approach in the back half of the year. 🛒
The company expects those headwinds to continue into 2023 and has begun to refocus on profitability, identifying $40 million in annualized expenses savings so far this year. In addition, it’ll continue to identify opportunities as it pursues long-term, profitable growth for the Express brand.
Regarding numbers, executives forecasted full-year 2023 comparable sales of positive low-single digits. They’re also looking for a diluted loss per share of $0.85 to $1.05, including capital expenditures of $55 million as it restructures its stores. 🔮
While Express isn’t quite on the brink of collapse like Bed Bath & Beyond or other struggling retailers, investors are rightfully concerned. Retailers and adjacent industries have painted a very cautious picture for consumer spending in 2023. That, plus a weak funding environment, could make it difficult for Express to stage a proper turnaround. Not to mention, a stock price nearing its all-time lows doesn’t inspire confidence. 😬
Overall, the negatives outweighed the positives today. $EXPR shares regained some ground throughout the session but closed down 12%. 🔻
