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Operating margin more than doubles to 12% at Express
11
Jun '10
Express, Inc., a specialty retail apparel chain operating 576 stores, announced its financial results for the first quarter, the thirteen weeks ended May 1, 2010, which compares to the same period ended May 2, 2009 last year.

Michael Weiss, Express, Inc.'s President and Chief Executive Officer commented: "Our leadership as a go-to fashion authority for our customer led to a 12% increase in comparable store sales, a 57% increase in e-commerce merchandise sales, and operating income that more than doubled versus the prior year - a great start to 2010. Strong response to our offerings across categories drove increased regular price sell-through in all channels of distribution, validating the success of our extensive testing program. We were also pleased with our new stores, which are performing at or above expectations. Following quarter end, we were excited to complete our initial public offering and continue the implementation of our growth strategies for the benefit of all Express stakeholders."

First Quarter Operating Results:

• Net sales increased 13.9% to $426.5 million from $374.4 million in the first quarter of 2009, and comparable store sales increased 12%;
• Gross margin increased nearly 700 bps to 36.9% compared to 29.9% in the first quarter of 2009;
• General, administrative, and store operating expenses totaled $102.9 million and included $1.8 million in costs related to the Senior Notes offering completed on March 5, 2010 along with a portion of the costs related to the initial public offering completed on May 18, 2010. This compares to GA&O expenses of $89.5 million in the first quarter of 2009;
• Operating income more than doubled to $51.3 million, or 12.0% of net sales, compared to $20.9 million, or 5.6% of net sales, in the first quarter of 2009;
• Interest expense was $20.8 million and included $7.2 million in costs associated with the loss on extinguishment of debt. This compares to interest expense of $13.6 million in the first quarter of 2009;
• Net income was $30.6 million, or $0.39 per diluted share on 78.1 million weighted average shares outstanding, and included the following one-time items: (i) $7.2 million, or $0.09 per diluted share, of interest expense associated with the loss on extinguishment of debt; and (ii) $1.8 million, or $0.02 per diluted share, of costs related to the Senior Notes offering completed on March 5, 2010 and the initial public offering completed on May 18, 2010. This compares to net income of $7.6 million, or $0.10 per diluted share on 74.0 million weighted average shares outstanding, in the first quarter of 2009; and
• Net income, adjusted for one-time items related to the Senior Notes and initial public offerings, was $39.4 million, or $0.50 per diluted share, for the first quarter of 2010.

First Quarter Balance Sheet Highlights:

• Cash and cash equivalents totaled $83.3 million compared to $106.1 million at the endof the first quarter of 2009;


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