Specialty retailer Express said its same store sales for the third quarter ended October 27, declined 5% and profits declined to $17.4 million, or 20 cents a share, compared to $32.7 million, or 37 cents a share.
Total sales for the period declined 4% to $468.5 million and gross margins contracted to 32.3% of sales from 36.2% of sales the prior year. Expenses increased to 25.1% of sales form 23.6% of sales.
Company chairman and CEO Michael Weiss called the quarter challenging and disappointing, but said the retailer had identified issues impacting its performance and begun executing a plan to rectify the situation.
"To that end, we re-balanced our sweater assortment, introduced entry price point fashion items in key categories, and began to set and communicate clearer pricing and promotional strategies for our customers," Weiss said. "
Those actions position the company well for the future – although low single digit negative comps are forecast for the fourth quarter - while it also continues to focus on four growth areas, according to Weiss.
"We saw continued positive momentum in our men's business, experienced double digit growth in e-commerce sales versus the prior year, and achieved our store expansion goals with the opening of eight new stores, including one in Canada," Weiss said. "In addition, we continued our international expansion with the opening of four additional franchise stores in the Middle East."
The clearer promotional messaging the company implemented in the third quarter was said to contributed to a record Black Friday performance that exceeded the company’s expectations. However, Weiss expressed reservations about the holiday season.
"We remain cautious on the overall performance of the fourth quarter given that the majority of the holiday season lies ahead," Weiss said. "We expect to make sequential improvement as our corrective measures get further underway. We remain confident in, and committed to, our strategies and four pillars of growth, which we believe position us for improved results over the long term."
Express expects to end the year with a total of 625 locations following the opening of 23 U.S. stores and five Canadian stores offset by the closure of 12 stores.