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What: Shares of specialty retailer Express (NYS: EXPR) plummeted 28% on Tuesday after its quarterly results and guidance disappointed Wall Street.
So what: Express' first-quarter EPS didn't miss estimates by much, but paltry revenue growth of just 6%, coupled with a big cut to its full-year earnings outlook, is forcing analysts to lower their valuation estimates considerably. Rising costs are also becoming an issue, giving investors plenty of reason to be cautious about its profitability going forward.
Now what: Management now sees full-year EPS of $1.79 to $1.89, down significantly from its prior view of $1.84 to $1.87. "As we look ahead, we remain confident in our go-to-market strategy and that our disciplined execution of our four growth pillars will allow for continued success," Chairman and CEO Michael Weiss reassured investors. With the stock now off about 65% from its 52-week high and trading at a forward P/E of roughly nine, bargain hunters might want to consider buying into that bullishness.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.