Apparel discounts hurt Express forecast; shares slump
By Shailaja Sharma and Aditi Shrivastava
(Reuters) - Apparel retailer Express Inc (EXPR.N: Cotización) said it expected its profit to slide by more than half in the current quarter, blaming deep discounts and a decline in store traffic.
Shares of Express, formerly a division of L Brands Inc LTD.N, fell as much as 14.5 percent in early trading after the company's fourth-quarter results missed analysts' average estimate.
"Our first-quarter guidance reflects year-to-date traffic and comparable sales as well as our belief that a material uptick in traffic is not necessarily imminent," Chief Executive Michael Weiss said in a statement.
Express, which has more than 600 stores in the United States, Canada and Puerto Rico, sells formal and casual wear and accessories to young men and women.
In the past two days, apparel retailers American Eagle Outfitters Inc (AEO.N: Cotización) and Urban Outfitters Inc URBN.O have warned that results in the current quarter would be hurt by stiff competition and choppy sales trends at malls.
"In light of the slow start to the year, we've taken an appropriate yet cautious approach to our guidance," Chief Financial Officer Paul Dascoli said on a post-earnings conference call.
Nomura Securities analyst Simeon Siegel said discounting is likely to continue across mall storefronts as retailers try to boost sales.
The weak mall traffic that hurt retailers was in part due to the unusually cold and snowy weather that kept shoppers away over the last three months. Continuación...