How Express Q4 Earnings Beat Out Estimates

Express Inc. (NYSE: EXPR) is one of the last retail companies to report its earnings results for the fiscal fourth-quarter. The company said it had $0.67 in earnings per share (EPS) and $765.6 million in revenue. Thomson Reuters had consensus estimates of $0.65 in EPS on revenue of $769.34 million. In the same period of last year, the company posted EPS of $0.49 and $725.80 million in revenue.

During the quarter, e-commerce sales rose by about 8% to a total of $156.3 million. Also comparable sales (including e-commerce) increased by 4% year over year.

In terms of guidance for the fiscal first quarter, Express expects to have EPS in the range of $0.25 to $0.28 and comparable sales in the low single digits. The consensus estimates call for EPS of $0.26 and $527.61 million in revenue.

On the books, cash and equivalents totaled $187 million, versus $346 million at the end of the fourth quarter of last year. The lower cash balance reflects the use of approximately $215 million of cash during the first quarter of 2015 to redeem the remaining senior notes due in 2018 and the use of approximately $69 million to repurchase about 3.8 million shares of its outstanding common stock.
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David Kornberg, president and CEO of Express, commented:

2015 was a transformative and successful year. We delivered improved product and customer experiences, while strengthening processes and systems throughout the company. During the year, we successfully delivered balanced growth attributable to robust comparable sales, margin gains and expense discipline. This culminated in our fourth quarter net sales increasing by 5% and comparable sales by 4%, operating margin growing by 160 basis points, and our diluted earnings per share growing by 37%. For the full year, our net and comparable sales increased by 9% and 6% respectively, and our operating margin rose 250 basis points, resulting in a 70% increase in our diluted earnings per share and a 79% increase in our adjusted diluted earnings per share.

Shares of Express closed Tuesday up 2.4% at $19.04, with a consensus analyst price target of $22.13 and a 52-week trading range of $15.15 to $20.72. Following the release of the earnings report, the stock was up an additional 7.7% at $20.50 in early trading indications Wednesday.