Express misses by $0.05, reports revs in-line; guides Q2 EPS below consensus; lowers FY18 guidance:
- Reports Q1 (Apr) loss of $0.07 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus of ($0.02); revenues fell 7.1% year/year to $467.03 mln vs the $468 mln Capital IQ Consensus.
- Comparable sales (including e-commerce sales) decreased 10%, compared to a 3% decrease in the first quarter of 2016.
- Merchandise margin declined by 380 basis points, driven by increased promotional activity. Buying and occupancy as a percentage of net sales rose by 240 basis points. In combination, this resulted in a 620 basis point decline in gross margin, representing 27.2% of net sales compared to 33.4% in last year's first quarter.
- Inventory was $287.5 million compared to $281.3 million at the end of the prior year's first quarter, a 2% increase.
- Co issues downside guidance for Q2, sees EPS of ($0.03)-$0.01, excluding non-recurring items, vs. $0.07 Capital IQ Consensus Estimate; sees comparable sales to be in the negative mid single digits
- Co lowers guidance for FY18, sees EPS of $0.41-0.48 (Prior $0.65-0.73), excluding non-recurring items, vs. $0.67 Capital IQ Consensus Estimate; sees comparable sales to be in the negative low single digits (Previously saw flat to low single digit growth)
- "We are pleased with the recent trends in our business and believe that our initiatives are gaining traction in a challenging retail environment. E-commerce sales accelerated in the first quarter, increasing 27%, and are on track for another record year. Store performance is also showing sequential progress. This led to a comparable sales improvement as we moved through the first quarter, a trend that has continued into the second quarter."
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