Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell) on Jan 07. Estimates have been
falling ever since the company reported weaker-than-expected
earnings in the third quarter of fiscal 2013 and a cut in fiscal
2013 guidance on Dec 4.
Why the Downgrade?
Express' third quarter earnings of 23 cents per share
increased 15% from the prior-year quarter and were within the
company's guidance range of 21-25 cents. However, earnings fell
8% short of the Zacks Consensus Estimate of 25 cents. The
lower-than-expected earnings can be attributed to heightening
competition with retailers like
Abercrombie & Fitch Co
) for holiday sales.
Sales were impacted by the highly volatile environment and
lower consumer spending. Sales in the Thanksgiving week also did
not meet company's own expectations; suggesting that the top line
will be weak once again in the fourth quarter.
Retailers like Express remained extremely focused this holiday
season in order to make the most of small opportunities. Be it
the early-hour store openings, promotional events, free shipping
on online purchases or heavy discounts, retailers tried all
tricks to boost sales. The company also spent heavily on
promotions and offered deeper discounts to entice cautious and
budget-constrained consumers. However, the weak response from the
consumers led to lower-than-expected sales during the entire
holiday season, including Thanksgiving.
Express' muted Thanksgiving sales, which along with high
promotional expenses resulted in a guidance cut for fiscal 2013.
The company now expects its comparable store sales to grow in low
single-digits compared with the previous expectation of low to
mid-single-digit growth. The company also lowered its fiscal 2013
earnings guidance and expects it to be in the range of
$1.46-$1.51 per share, much lower than $1.52-$1.60 per share
This specialty retailer witnessed sharp downward estimate
revisions after announcing its third quarter fiscal 2013 results.
The Zacks Consensus Estimate for the fourth quarter decreased
11.5% and that for fiscal 2013 went down 6.3% over the last 60
Other Stock to Consider
Not all stocks are performing as poorly as Express Inc.
Finish Line Inc
) is a better-ranked retailer with a Zacks Rank #1 (Strong
ABERCROMBIE (ANF): Free Stock Analysis Report
ANN INC (ANN): Free Stock Analysis Report
EXPRESS INC (EXPR): Free Stock Analysis
FINISH LINE-CLA (FINL): Free Stock Analysis
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