Express Management Lays Out 4 Initiatives To Increase Store Traffic Going Forward

Express, Inc. (NYSE: EXPR) reported its EPS, SSS and GM short of expectations, and lowered its guidance. Unfavorable traffic trends are likely to continue to expert pressure on the company’s performance in the back half, FBR’s Susan Anderson said in a report. She maintained a Market Perform rating on Express, while reducing the price target from $18 to $13.

Performance Under Pressure

The company reported its Q2 EPS at $0.13, short of the FBR and consensus estimates of $0.17. SSS and GM also came in below expectations due to “declines in traffic and lack of clarity across the assortment,” analyst Anderson mentioned.

Although Express has enhanced choice offerings with the aim of driving sales, these were not executed well and drove the comp decline. The company’s comp guidance for 3Q16 indicates that the increased offerings and traffic pressure would likely continue throughout the quarter.

Express had announced $14 million in annualized savings in Q1. The company identified another $30-$40 million in Q2, for combined savings of $44-$54 million.

“We remain on the sidelines until we see a rebound in SSS/traffic, consistent execution, and earnings growth,” Anderson wrote. She added that the price target reduction reflected the lowered guidance and lack of visibility.

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