Ecommerce drives sales at Express Inc in Q3
Express Inc., a specialty retail apparel chain operating 607 stores, announced its third quarter financial results for the thirteen and thirty-nine week periods ended October 29, 2011, which compares to the same periods ended October 30, 2010.
Michael Weiss, Express, Inc.'s Chairman, Chief Executive Officer, and President commented: "We are pleased to continue our positive momentum from the first half of the year and report better-than-expected third quarter earnings. We believe this is a testament to the increasing awareness and strength of our brand as a leading fashion authority for our customers. During the quarter, we advanced each of our growth pillars."
"Increased sales productivity and profitability were driven by balanced growth across genders and categories resulting in a 5% increase in comparable sales. We grew our e-commerce channel by 41%, and our new stores performed ahead of our expectations. In addition, we continue to be pleased with our new store design and plan to expand this format to our new and remodeled stores beginning in late Spring 2012.
"Our international expansion continued successfully with the launch of two new stores in Canada. Our confidence is further validated by a great start to the season with record Black Friday sales. We continue to expect the combination of our data-driven strategies and brand-building initiatives to lead to another quarter of strong results and continued accomplishments toward our long term goals and objectives."
Third Quarter Operating Results:
• Net sales increased 8% to $486.8 million from $450.6 million in the third quarter of 2010;
• Comparable sales increased 5% following a 5% increase in comparable sales in the third quarter of 2010;
• Gross margin decreased 30 bps to approximately 36.2% of net sales compared to 36.5% in the third quarter of 2010. During the third quarter, the anticipated 50 basis point impact of fabric cancellation costs and increased product sourcing costs were partially offset by gross margin expansion related to the on-going benefit realized from the Company's Go-to-Market strategy and 20 bps of buying and occupancy leverage;
• Selling, general, and administrative (SG&A) expenses totaled $115.1 million, or 23.6% of net sales. This compares to SG&A expenses of $111.3 million, or 24.7% of net sales, in the third quarter of 2010, which included $0.2 million of non-core operating costs related to the secondary offering completed on December 9, 2010;
• Operating income increased 16.6% to $60.9 million, or 12.5% of net sales, compared to $52.2 million, or 11.6% of net sales, in the third quarter of 2010;
• Interest expense totaled $6.3 million compared to interest expense of $7.6 million in the third quarter of 2010;
• Income tax expense was $22.0 million, at an effective tax rate of approximately 40.3%, compared to tax expense of $18.4 million, at an effective tax rate of approximately 41.2%, inthe third quarter of 2010; and
• Net income was $32.7 million, or $0.37 per diluted share on 88.9 million weighted average shares outstanding. This compares to net income of $26.3 million, or $0.30 per diluted share on 88.7 million weighted average shares outstanding, in the third quarter of 2010, which included $0.1 million of after-tax non-core operating costs associated with the Company's secondary offering completed on December 9, 2010.
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