Express ( NYSE: EXPR ) swung lower in early trading on Thursday after the retailer fell short of estimates with its Q3 earnings report .
CEO Tim Baxter said the macroeconomic, consumer and competitive environments were extremely challenging during the quarter and became more acute as it progressed.
Comparable sales were down 8% during the quarter despite a positive comp for the men's business. Express acknowledged that it missed some opportunities in the women's business.
Gross margin came in at 27.8% of sales vs. 33.2% a year ago. Merchandise margin contracted by 360 basis points primarily driven by the challenging macroeconomic and highly promotional retail environments. Buying and occupancy expenses deleveraged approximately 180 basis points due to the decline in comparable sales
Express ( EXPR ) posted an operating loss of $29.5M for the quarter vs. an operating income gain of $16.3M a year ago.
The inventory at the end of the quarter was up 10% to $423M. Express ( EXPR ) had cash of $25M at the end of the quarter.
FY22 guidance: Comparable sales of flat to up 1%; gross margin rate to decrease approximately 150 basis points; SG&A expenses as a percent of sales to delever approximately 200 basis points; net interest expense of $17 million; Effective tax rate essentially zero percent; EPS of $1.12 to $1.22 vs. consensus of -$0.18; capital expenditures of approximately $50 million; inventory to move closer to parity with sales trends by the end of the year
Shares of Express ( EXPR ) fell 7.05% premarket to $1.19 following the earnings misfire.
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Express falls after promotional pressure contributes to earnings miss