Express continues to struggle amid the pandemic.
The retailer revealed quarterly earnings Thursday before the market opened, widening its losses by another $90 million and revealing a 10 percent staff reduction in its Columbus, Ohio, corporate offices. Shares of Express fell more than 27 percent in pre-market hours as a result.
But Tim Baxter, Express’ chief executive officer, said he’s cautiously optimistic about the company’s progress.
“In the third quarter, we continued to advance the Expressway Forward strategy while taking decisive and appropriate action to manage our liquidity,” Baxter said in a statement. “Our e-commerce business continues to gain momentum and the new fashion product that fully reflects the ‘Express Edit’ viewpoint is outpacing the balance of our assortment.”
Those fashion edits include an attempt to tap into the growing men’s wear market. In September, Express launched its Men’s Style Trial Service. Baxter has also previously said Express is returning to its fashion-driven roots with a greater selection of men’s and women’s jeans. In addition, Express partnered with designer and television personality Tan France during New York Fashion Week for the Dream Big Project.
“Our strategy is the right one, the changes to our product presentation and brand positioning are the right ones and our financial actions are the right ones,” Baxter said. “As we move into 2021, we remain focused on delivering our long-term goal of a mid-single digit operating margin and profitable growth.
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“Our streamlined go-to-market process and the implementation of our new inventory planning and management systems have already improved our efficiency and enabled us to operate with greater speed and agility,” Baxter added. “Further reducing our workforce was a difficult decision, but was appropriate to calibrate the organization to the capabilities of this new operating model.”
The company is not providing forward-looking guidance, but anticipates the job cuts will help free up $13 million next year. In addition, Express is expecting a $95 million cash tax benefit in 2021’s second quarter as part of the Cares Act.
Still, the return on investments have yet to take shape. And store closures and declining mall traffic — which began pre-pandemic — aren’t helping much.
For the three-month period ending Oct. 31, total company revenues were $322 million, down from $488 million the same time last year. The company lost more than $90 million in the quarter. That’s on top of a $107 million loss last quarter and more than the $3.1 million in losses in last year’s third quarter.
Express ended the quarter with $107 million in cash and cash equivalents, $165 million in long-term debt and 592 stores in the U.S.
Shares of Express, which closed down 5.95 percent to $1.58 a piece Wednesday, are down more than 55 percent year-over-year.
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