Express, Inc. (EXPR) has reported 59.42 percent plunge in profit for the quarter ended Jan. 28, 2017. The company has earned $22.77 million, or $0.29 a share in the quarter, compared with $56.12 million, or $0.67 a share for the same period last year.
Revenue during the quarter dropped 11.33 percent to $678.78 million from $765.55 million in the previous year period. Gross margin for the quarter contracted 563 basis points over the previous year period to 28.41 percent. Total expenses were 94.29 percent of quarterly revenues, up from 87.87 percent for the same period last year. That has resulted in a contraction of 642 basis points in operating margin to 5.71 percent.
Operating income for the quarter was $38.79 million, compared with $92.89 million in the previous year period.
David Kornberg, the Company's president and chief executive officer, noted that, "Despite ongoing pressures in the retail sector, our fourth quarter earnings were in line with previously issued guidance. As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment. As our industry adapts to changing consumer preferences, we continue to invest in our omni-channel and marketing capabilities to ensure that we capitalize on this evolution. As a result, e-commerce sales made up 25% of fourth quarter net sales, with sales increasing 9% over the prior year period. We also remain intensely focused on managing our overall cost structure and optimizing our store footprint. Our balance sheet remains strong with more than $200 million in cash and we continue to have solid cash flow."
For fiscal year 2017, EXPRESS forecasts net income to be in the range of $52 million to $58 million. The company projects diluted earnings per share to be in the range of $0.65 to $0.73.
Operating cash flow declines
Express, Inc. has generated cash of $186.71 million from operating activities during the year, down 18.68 percent or $42.90 million, when compared with the last year. The company has spent $108.87 million cash to meet investing activities during the year as against cash outgo of $115.38 million in the last year.
The company has spent $58.27 million cash to carry out financing activities during the year as against cash outgo of $272 million in the last year period.
Cash and cash equivalents stood at $207.37 million as on Jan. 28, 2017, up 10.95 percent or $20.47 million from $186.90 million on Jan. 30, 2016.
Working capital increases
Express, Inc. has recorded an increase in the working capital over the last year. It stood at $231.74 million as at Jan. 28, 2017, up 12.48 percent or $25.72 million from $206.02 million on Jan. 30, 2016. Current ratio was at 1.82 as on Jan. 28, 2017, up from 1.67 on Jan. 30, 2016.
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