Express (EXPR), a specialty retail apparel chain, has announced a 59.39 percent plunge in profit for the quarter ended Aug. 02, 2014, due to sluggish sales and operating margins. The company earned $6.87 million or $0.08 a share in the second-quarter compared with $16.91 million or $0.20 a share a year ago.
Revenue during the second-quarter went down marginally 1.77 percent to $481.42 million from $490.08 million in the last year period.
Gross margin contracted by 287 basis points over the last year period to 28.25 percent. Total expenses as a percentage of revenues increased to 96.97 percent from 93.18 percent in the same period last year. That has resulted in contraction of 378 basis points in operating margins to 3.03 percent.
The company reported operating income of $14.61 million, compared with $33.42 million in the previous year period.
Michael Weiss, the company's chairman and chief executive officer, noted that, ''In light of the difficult environment, we feel very good about the progress made during the second quarter and delivering earnings that exceeded the high end of our guidance.''
The company expects the third quarter revenues to be in the range of to $11 - $15 million. It anticipates earnings per share at $0.13 - $0.18 for the third quarter.
Cash Flow
Express has generated cash of $4.80 million from operating activities during the first half, down 86.85 percent or $31.73 million when compared with the last year period.
The company has spent $59.48 million cash to meet investing activities during the first half, as against cash outgo of $45.61 million in the last year period. It has made net capital expenditure of $59.47 million during the first half, which was higher by 30.59 percent or $13.93 million, from a year ago.
The company has spent $4.06 million cash to meet financing activities during the first half, as against cash outgo of $12.89 million in the last year period. It has borrowed net of $0.75 million through debt during the first half. It has raised net of $3.34 million by selling common stocks.
As on Aug. 02, 2014, the company's cash balance stood at $253.33 million, up 8.14 percent or $19.08 million from Aug. 03, 2013.
Debt Position
As on Aug. 02, 2014, long-term debt stood at $199.34 million. The company total debt was 16.63 percent of total assets as on Aug. 02, 2014. Express. debt to equity ratio was at 0.40 as on Aug. 02, 2014.
Shares of the company gained $1.70 or 11.65 percent to trade at $14.59 on Wednesday (9:05AM).
