Home / Knowledge / News / Apparel/Garments / Q2 net income nosedives 59% at retailer Express
Q2 net income nosedives 59% at retailer Express
28
Aug '14
Net income at NYSE-listed apparel retail chain Express, Inc nosedived just a whisker under 60% from a year earlier quarter, in the second fiscal quarter ended August 2, 2014.

However, Express did not divulge reasons for this plunge in its press release, which disclosed that net income plunged to $6.9 million or $0.08 per diluted share in the second quarter of 2014, down 59.17% from $16.9 million or $0.20 per diluted share, in the corresponding fiscal quarter of 2013.

In the quarter under review, the retailer reported a decline of 2% in net sales at $481.4 million from $490.1 million in the second quarter of 2013. Comparable sales, including e-commerce sales fell 5% against a rise of 6% in last year's second quarter.

Second quarter of 2014 gross margin as a percentage of net sales went down 280 basis points year-on-year and accounted for 28.3% of net sales. Merchandise margin declined by 70 basis points from a year ago, while buying and occupancy costs as a percentage of sales rose 210 basis points.

Express said the merchandise margin decline was less than forecast in May, when it first estimated the impact of clearing through carried over first quarter inventory, while buying and occupancy de-leverage was mainly from combined impact of lower sales, higher rent and higher depreciation and amortization expenses.

Selling, general, and administrative (SG&A) expenses totalled $121.9 million in the second quarter of 2014 versus $119.2 million in last year's second quarter. As a percentage of net sales, SG&A expenses rose by 100 basis points to 25.3% compared to 24.3% in last year's second quarter.

This de-leveraging related SG&A is attributable to the decline in sales, and also reflects additional marketing activities, Express explained.

Operating income touched $14.6 million or 3.0% of net sales, compared to $33.4 million or 6.8% of net sales, in the second quarter of 2013.

Income tax expense reached $1.8 million, at an effective tax rate of 20.6% from $11.2 million, at an effective tax rate of 39.7% in last year's second quarter. It said, this year's rate reflects a benefit of $1.7 million or $0.02 per share associated with the completion of a multi-year tax examination.

Cash and cash equivalents totalled $253.3 million in second quarter of 2014 versus $234.3 million at the end of second quarter of 2013. Inventories stood at $239.9 million, down 1% from $241.9 million at the end of the second quarter of 2013.

The retailer added that inventory per square foot was down 4% compared to the comparable period in 2013 and the inventory balance at the end of the second quarter of 2014 includes around $12.5 million related to Express Factory Outlet stores.

Michael Weiss, CEO at Express said, “Looking ahead to the second half of the year, the opportunity remains to drive further sequential improvements in both sales and profits, while simultaneously continuing our disciplined approach to inventory units and input costs."

Fibre2fashion News Desk - India

Must ReadView All

Textiles | On 9th Dec 2016

‘Less demand may make it hard to achieve export target’

The $48 billion target for textiles and garment exports for 2016-17...

Courtesy: Gucci/Pantone

Textiles | On 9th Dec 2016

Pantone announces greenery as colour of the year 2017

Pantone, an X-Rite company and the global authority on colour and...

Textiles | On 9th Dec 2016

Heimtextil to host 230 exhibitors from 28 countries

Close to 230 exhibitors from over 28 countries are expected to...

Interviews View All

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Shawn Honeycutt
Bolger & O'Hearn

‘The Indian market is interesting and rather persistent in seeking new...

Nuno Venda
ROQ

‘There has been an increase in demand for water based inks, rather than...

Johan Berlin
InvestKonsult Sweden AB

Investkonsult Sweden AB has been buying and selling second-hand textile...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
December 2016

December 2016

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search