Express Shares Rally Amid Mixed Q4 Results, Solid Guidance

Shares of Express, Inc.

gained almost 7 percent in the pre-market hours on Wednesday after the clothing and accessories chain reported better-than-expected fourth quarter earnings and provided solid outlook for the full year. The Columbus, Ohio-based Express reported profit $56.1 million, or 67 cents a share, up from $41.8 million, or 49 cents a share, in the fourth quarter of 2014. Net sales increased 5 percent to $765.6 million. Wall Street, on an average, expected earnings of 65 cents a share on revenue of $769.34 million. Comparable sales (including e-commerce sales) rose 4 percent. E-commerce sales improved 8 percent to $156.3 million. Gross margin came in at 34 percent, higher than 31.7 percent in last year's fourth quarter, driven by improvement in merchandise margin. For the first quarter, the company expects adjusted EPS of 25 to 28 cents, with comparable sales expected to increase in low single digits. In the same period last year, the company earned 22 cents a share and recorded comparable sales growth of 7 percent. For the full year, Express sees adjusted EPS of $1.56 to $1.71, with comparable sales expected to increase in low single digits. Last year, the company earned $1.45 a share and recorded comparable sales growth of 6 percent. Analysts' consensus estimate calls for 26 cents EPS for the first quarter and $1.58 a share for the full year. EXPR closed Tuesday's regular trading session at $18.60. In the pre-market hours, the stock were currently up 6 percent to trade at $20.25. Express shares have climbed 10 percent this year and increased 38 percent in the last one year.