When specialty retail apparel chain Express issued its fourth quarter guidance in early December 2013, it anticipated a promotional holiday season as well as a slowdown in traffic after the Thanksgiving week. What the company encountered, however, was a drop in traffic that was even deeper than expected because consumers waited until much closer to Christmas to shop.
In response to the deceleration in traffic, the operator of more than 625 stores has extended the duration of its promotions and deepened the discount being offered to keep inventories from building up. But January traffic to date has been weak, forcing the retailer to remain promotional for the remainder of the month.
The company is also revising its outlook for the fourth quarter ending Feb. 1. Comparable sales are expected to range from flat to an increase in the low single digit range. Net income is expected to fall in the range of $48 to $52 million, or $0.57 to $0.61 per diluted share. This compares to the company's previous guidance of $56 to $60 million, or $0.66 to $0.71 per diluted share.
"We expect our inventory at the beginning of 2014 to reflect low to mid-single digit growth and to be more heavily weighted to spring product than at this time last year. Furthermore, we have significant open to buy dollars available for investment during the spring season," said chairman and CEO Michael Weiss.
The company plans to report fourth quarter results the week of March 9.