Apparel retailer expanding outlet store concept after terrible Q4

Express Inc. is betting on e-commerce, outlet stores and a more curated mix to help revive sales after a rough fourth quarter.



The young women’s apparel retailer’s profit plunged 59% to $22.8 million in the quarter ended Jan. 28, in line with expectations, amid increased discounting and weak mall traffic. Earnings per share fell to $0.29, from $0.67 in the year-ago period.



Net sales dropped 11% to $678.8 million. Same-store sales, including online, fell 13%. E-commerce sales rose 9% over the year-ago period, making up 25% of Express’ fourth quarter net sales.



The retailer expressed confidence about its performance going forward, with online and factory outlet stores expected to help boost sales. On a call with analysts, executives said the company will open 19 Express Factory Outlet locations in 2017, and also convert 20 regular stores into outlet units.



Express also plans to improve its merchandise mix through a more curated selection.



“As expected, our store performance continued to be impacted by challenging mall traffic and a promotional retail environment,” stated David Kornberg, president and CEO. “As our industry adapts to changing consumer preferences, we continue to invest in our omnichannel and marketing capabilities to ensure that we capitalize on this evolution.”



Going forward, Kornberg said initiatives underway at Express will translate into stronger performance throughout the rest of the year.



“These initiatives include improving the fashion clarity in our stores through reduced choice counts, launching a new brand campaign, introducing compelling new products, and improving upon key existing categories,” he said. “We also expect to benefit from the relaunch of our customer loyalty program and our new IT systems, which will foster more efficient decision making and precise planning."



For the year, the company reported profit of $57.4 million, or 73 cents per share. Revenue was reported as $2.19 billion.



Express currently operates more than 650 retail and factory outlet stores.