Why Express, Inc. Shares Got Crushed

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 apparel retailer Express, Inc. plummeted 23% today after its full-year outlook disappointed Wall Street.

So what: Express' third-quarter results managed to meet estimates -- EPS increased 15% on a revenue bump of 7% -- but downbeat guidance for the rest of the year is triggering serious concerns over slowing growth going forward. In fact, management cited a sharp increase in margin-pressuring promotional activity for the downbeat view, suggesting that its competitive position is weakening.

Now what: Management now sees full-year EPS of $1.46 to $1.51, down from its prior view of $1.52 to $1.60 and below the consensus of $1.61. "We had been planning for a promotional holiday season but we now expect the intensity of those promotions to reach heightened levels and we are updating our full year guidance accordingly," said Chairman and CEO Michael Weiss. "Our overarching goal is to continue presenting Express as a premier fashion authority for our demographic, and we believe that our current and go-forward assortments demonstrate that standing." Of course, given the strong competitive headwinds facing Express at this point, I'd wait for an even wider margin of safety before buying into that optimism.

Our top stock for 2014
The market stormed out to huge gains across 2013, leaving investors on the sidelines burned. However, opportunistic investors can still find huge winners. The Motley Fool's chief investment officer has just hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2014." To find out which stock it is and read our in-depth report, simply click here. It's free!

The article Why Express, Inc. Shares Got Crushed originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks 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 Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.