Fashion Retailer Express Q3 Performance Short Of Street Expectations, Stock Tanks

Express Inc EXPR reported Q3 sales of $454.1 million, up 5% year-over-year, missing the consensus of $471.24 million and the management guidance of $460 million to $490 million.

Express and UpWest Brands sales decreased 7% to $402.0 million, with comparable sales down 6%.

Comparable retail sales, which include Express stores and eCommerce, were down 4%. Retail stores' comparable sales decreased by 16%, while eCommerce comparable sales increased by 10%.

Comparable outlet sales decreased 13% compared to the third quarter of 2022. Bonobos Brand Net sales were $52.1 million.

Gross margin was 24.1% compared to 27.8% a year ago. The merchandise margin contracted by 440 basis points is primarily driven by increased promotional activity and 370 basis points of royalty expense related to the joint venture with WHP.

Q4 Guidance: Express sees sales of approximately $565 million to $590 million, including roughly $60 million in Bonobos net sales versus the consensus of $633.68 million.

Guidance: Express sees FY23 sales of approximately $1.840 billion to $1.865 billion versus prior guidance of $1.9 billion to $2.0 billion and the consensus of $1.92 billion.

The guidance includes approximately $150 million in Bonobos net sales.

The company forecasts a diluted loss per share of $46.00 to $50.00 versus a consensus loss of $33.70 and $(30.0)-$(34.0) expected earlier.

Price Action: EXPR shares are trading lower by 6.08% at $9.19 on the last check Thursday.