Bear of the Day: Express (EXPR)

Based in Columbus, OH, Express Inc. (EXPR) is a specialty men’s and women’s retailer that’s found predominately in malls and shopping centers in the U.S. The company’s core customer is in their 20s and 30s, and offers work, casual, and going-out apparel.

The Coronavirus Impact

Express reported first quarter 2020 results back in June, and it was a tough period for the retailer.

Both the top and bottom line missed the Zacks Consensus Estimate. Total sales declined 53% to $210.3 million, while adjusted earnings fell to a loss of $1.55 per share.

Cash and cash equivalents came in at $236.2 million compared to $144.2 million at the end of Q1 2019.

As of July 5, Express has reopened roughly 95% of its stores, and anticipates the rest of its stores to be opened back up in the coming weeks.

As more stores reopen, the company is seeing much-improved sales and traffic on a week-over-week basis.

Express’ online sales is strong as well, and reflects positive consumer sentiment towards the company’s new product; digital sales actually delivered positive comps in June thanks to an increase in traffic and conversion.

Bottom Line

EXPR is now a Zacks Rank #5 (Strong Sell).

Two analysts have cut their full year earnings outlook over the past 60 days, and the consensus estimate has fallen well over two dollars to a loss of $2.50 per share; earnings are expected to see a huge year-over-year decline for 2020, though the bottom line should rebound in the next year.

The company did not provide guidance for the current quarter and fiscal year, following in the footsteps of many other retailers.

Going forward, management will focus on building sufficient liquidity, as well as its long-term objective of sustained profitable growth. However, until the underlying uncertainty from the pandemic eases, it may be a rocky ride for Express for a little while longer.

Investors who are interested in adding a retail stock to their portfolio could consider Shoe Carnival (SCVL), a big footwear retailer that offers shoppers a wide selection of casual and dress options. SCVL is a #2 (Buy) on the Zacks Rank, and shares have jumped nearly 60% since March.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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