Express prepping to launch outlet business
Express Inc.'s (NYSE: EXPR) stock rose 7.73% to 21.41 today following Chairman and CEO Michael Weiss's second-quarter earnings call.
Columbus-based Express Inc. is moving forward on plans to launch its outlet business in the second quarter of 2014. Weiss said the company's retail outlet venture "represents another opportunity to drive significant top and bottom line growth."
Weiss assured investors that Express is well-positioned heading into the holiday season. Second-quarter net sales rose to $486.2 million, up 7% from 2Q 2012. The steepest increase was Express's online sales, which increased 27% to $59.9 million, up 24% from $47.2 million in 2012.
Meanwhile, 2Q gross margin declined to 31.4% of net sales compared to 32.2% in 2Q 2012. Weiss attributed the companys 40-point decline in merchandise margins to higher promotional spending spurred by competition. Buying and occupancy costs increased due primarily to rent expenses in Express's flagship stores in New York and Los Angeles. Management made up the difference by increasing seling, general and admin expenses by 80 points.
The company reported net income of $16.9 million and operating income of $33.4 million.
L Brands foudner Les Wexner founded Express in the 1980s as part of the Limited (L Brands) retail fashion empire; the compnay sold Express in 2007. Today, Express has 620 locations in the U.S., Canada and Puerto Rico.