Express CEO Michael Weiss was optimistic about the retailer’s progress in the second quarter, especially considering the difficult environment the company has been dealing with in recent months.
A little more than a month ago, Weiss, who started with Express when it was an eight-store operation, announced his plans to retire at the end of the company’s fiscal year. In June, private-equity firm Sycamore Partners reported a 9.9% stake in retailer and said it was interested in conducting due diligence that could lead to a buyout. And during the first quarter, the retailer struggled, reporting a 10% drop in net sales and 11% drop in same-store sales.
The second quarter was another story, however. The company delivered earnings that exceeded the high end of its guidance. It beat Wall Street expectations for profit and revenue during the quarter.
Net earnings were $6.9 million, down 59% from $16.9 million in the year-ago period, but still better than expected. Net sales decreased 2% to $481.4 million from $490.1 million, but also beat Wall Street predictions for net sales of about $460 million. Same-store sales decreased 5%, while e-commerce sales increased 3%.
“With 17 of our 20 Express Factory Outlet stores open for approximately four months, we are delighted to see them continuing to exceed our expectations from both revenue and a margin contribution perspective,” Weiss said. “In our full priced retail stores, we managed promotions in a manner that enabled us to deliver merchandise margins that were better than we initially expected. As new receipts flowed in during the second quarter, certain categories reversed their declines and others grew nicely.”