Express, Inc. (EXPR) has reported a 55.84 percent plunge in profit for the quarter ended Oct. 29, 2016. The company has earned $11.62 million, or $0.15 a share in the quarter, compared with $26.31 million, or $0.31 a share for the same period last year.
Revenue during the quarter dropped 7.41 percent to $506.09 million from $546.62 million in the previous year period. Gross margin for the quarter contracted 498 basis points over the previous year period to 29.98 percent. Total expenses were 97.02 percent of quarterly revenues, up from 91.85 percent for the same period last year. That has resulted in a contraction of 516 basis points in operating margin to 2.98 percent.
Operating income for the quarter was $15.10 million, compared with $44.53 million in the previous year period.
David Kornberg, the Company,s president and chief executive officer, stated: "Our third quarter performance was highlighted by sales and earnings in line with our guidance and progress made addressing the areas noted for improvement during our second quarter call. This progress included refocusing our brand projection and marketing to be more consistent with our core demographic and additional steps taken to drive customer acquisition and retention. Notably, while mall traffic challenges continued to impact our store performance, we achieved a double digit increase in e-commerce sales."
For financial year 2016, Express, Inc. projects net income to be in the range of $55 million to $58 million and expects adjusted net income to be in the range of $62 million to $65 million.The company expects diluted earnings per share to be in the range of $0.70 to $0.74 and expects diluted earnings per share to be in the range of $0.78 to $0.82 on adjusted basis.
For the fourth-quarter 2016, Express, Inc. projects net income to be in the range of $20 million to $23 million. The company expects diluted earnings per share to be in the range of $0.26 to $0.30.
Operating cash flow improves
Express, Inc. has generated cash of $59.86 million from operating activities during the nine month period, up 7.61 percent or $4.23 million, when compared with the last year period. The company has spent $91.05 million cash to meet investing activities during the nine month period as against cash outgo of $85.05 million in the last year period.
The company has spent $54.49 million cash to carry out financing activities during the nine month period as against cash outgo of $225.03 million in the last year period.
Cash and cash equivalents stood at $101.86 million as on Oct. 29, 2016, up 11.66 percent or $10.64 million from $91.22 million on Oct. 31, 2015.
Working capital drops significantly
Express, Inc. has witnessed a decline in the working capital over the last year. It stood at $98.19 million as at Oct. 29, 2016, down 51.40 percent or $103.84 million from $202.03 million on Oct. 31, 2015. Current ratio was at 1.24 as on Oct. 29, 2016, down from 1.60 on Oct. 31, 2015.
Cash conversion cycle (CCC) has decreased to 4 days for the quarter from 36 days for the last year period. Days sales outstanding were almost stable at 3 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 44 days for the quarter compared with 81 days for the previous year period. At the same time, days payable outstanding went up to 52 days for the quarter from 50 for the same period last year.
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