Why Express Shares Plunged
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of clothing retailer Express (NYS: EXPR) sank 10% today after its quarterly results and outlook disappointed Wall Street.
So what: Express' second-quarter profit managed to top estimates, but a clear miss on the top line -- revenue of $454.9 million versus the consensus of $467 million -- coupled with downbeat guidance for the full year is forcing analysts to lower their growth expectations yet again. In fact, same-store sales barely budged during the quarter, up a paltry 1%, reinforcing concerns over the brand's durability amid the weak economy.
Now what: Management now sees full-year EPS of $1.69-$1.79 -- versus its prior view of $1.79-$1.89 -- and expects flat to low-single-digit same-store sales. "As we begin the second half of the year, we believe it is prudent to set our guidance more conservatively and in line with the trend we experienced in the second quarter," Chairman and CEO Michael Weiss said. "We remain confident in our strategies and expect the disciplined execution against our growth pillars to result in another year of growth for Express." With the stock hitting a new 52-week low today and trading at a forward P/E of around eight, buying into that optimism might not be a bad idea.
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The article Why Express Shares Plunged originally appeared on Fool.com.
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