UPDATE: Express Shares Tumble On Weak Outlook

Shares of Express

dropped more than 10% in pre-market trading after the company cut its forecast for the year. The Columbus, Ohio-based company reported a quarterly profit of $14.6 million, or $0.17 per share, versus a year-ago profit of $19.3 million, or $0.23 per share. The company had projected earnings of $0.13 to $0.18 per share. Its sales declined 1.2% to $497.6 million. However, analysts were expecting earnings of $0.16 per share on revenue of $499.74 million. Its comparable-store sales, including e-commerce sales, declined 5% in the quarter, versus a rise of 5% in the year-ago quarter. E-commerce sales increased 11% to $79.1 million. Gross margin as a percentage of net sales shrank 110 basis points. Operating income fell to $30.5 million, or 6.1% of net sales, versus $36.7 million, or 7.3% of net sales. At the end of the third quarter, cash and cash equivalents totaled $217.8 million, compared to $181.6 million at the end of year-ago quarter. Inventory was $350.3 million, versus $343.0 million at the end of the year-ago quarter. Express now projects full-year earnings of $0.69 to $0.76 per share, versus its earlier forecast of $0.85 to $0.95 per share. For the current quarter, Express expects earnings of $0.38 to $0.45 per share, versus analysts' estimates of $0.60 per share. Michael Weiss, the Company's Chairman and Chief Executive Officer, said, "It was a busy and productive quarter as we continued to execute on our strategic objectives. Our Express Factory Outlet stores delivered exceptional results. Our website and mobile commerce enhancements drove strong e-commerce growth and our marketing initiatives continued to elevate our brand. On the international front, we introduced the Express brand to South Africa through the opening of shop-in-shop franchise locations." Express shares tumbled 10.97% to $12.90 in pre-market trading.