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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Express Inc | NYSE:EXPR | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.29 | 0 | 00:00:00 |
From Dec 2022 to Dec 2024
Reiterates $80 million in savings in 2023, delivered $30 million in savings in the third quarter of 2023
Reiterates goal to deliver $200 million in annualized savings by 2025
Fashion apparel retailer Express, Inc. (NYSE: EXPR), announced its financial results for the third quarter of 2023. These results, which cover the thirteen weeks and thirty-nine weeks ended October 28, 2023, are compared with the thirteen weeks and thirty-nine weeks ended October 29, 2022.
"During the past three months, I have had the opportunity to assess our operating capabilities, organizational structure and processes, marketing and customer acquisition abilities, and merchandise and product strategies," said Stewart Glendinning, Chief Executive Officer. "Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform. Our efforts to unlock our full potential and improve our performance are already underway."
Third Quarter 2023 Operating Results
1 The Company effected a 1-for-20 reverse stock split on August 30, 2023, which decreased shares outstanding from 74.9 million to 3.7 million. As a result, net loss per share for periods prior to the second quarter of 2023 have been recast to reflect the reduction in weighted average shares outstanding.
2 EBITDA is a non-GAAP financial measure. Please see Schedule 4 – Supplemental Information and the reconciliation contained therein for additional information concerning this non-GAAP financial measure.
Balance Sheet and Cash Flow Highlights
Expense Reduction Initiatives
The Company is continuing to conduct a comprehensive review of its business model to identify actions that are expected to meaningfully reduce pre-tax costs and enable a more efficient and effective organization and has engaged external advisors to assist in this effort. The Company is reiterating its stated goal to deliver over $200 million in annualized savings by 2025 versus 2022.
The Company is reiterating that it will realize $80 million of cost reductions for fiscal 2023 versus fiscal 2022. In the third quarter of 2023, the Company delivered $30 million of these cost savings.
In addition, the Company is reiterating that $120 million in annualized expense reductions for fiscal 2024 versus 2022 have been identified and implemented, which are inclusive of the savings effectuated for fiscal 2023. The Company is also aggressively pursuing at least $50 million in gross margin expansion opportunities by leveraging efficiencies in sourcing, production and the supply chain.
2023 Outlook
The Company’s full year outlook has been updated and takes into consideration the currently challenging macroeconomic environment, including reduced consumer spending and increased price sensitivity in discretionary categories.
The full year of 2023 will include a 53rd week, with the fourth quarter of 2023 consisting of 14 weeks. The 53rd week is estimated to add approximately $25 million to net sales in the fourth quarter and full year of 2023.
Fourth Quarter 2023
The Company expects the following for the fourth quarter of 2023 compared to the fourth quarter of 2022:
Full Year 2023
The Company expects the following for the full year of 2023 compared to the full year of 2022:
See Schedule 5 for a discussion of projected real estate activity.
Conference Call Information
A conference call to discuss third quarter 2023 results is scheduled for November 30, 2023 at 9:00 a.m. Eastern Time (ET). Investors and analysts interested in participating in the earnings call are invited to dial (888) 550-5723 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.express.com/investor. A telephone replay of this call will be available beginning at 12:00 p.m. ET on November 30, 2023 until 11:59 p.m. ET on December 7, 2023, and can be accessed by dialing (800) 770-2030 and entering the replay pin number 1790468.
About Express, Inc.
Express, Inc. is a multi-brand fashion retailer whose portfolio includes Express, Bonobos and UpWest. The Company operates an omnichannel platform as well as physical and online stores. Grounded in a belief that style, quality and value should all be found in one place, Express is a brand with a purpose - We Create Confidence. We Inspire Self-Expression. - powered by a styling community. Bonobos is a menswear brand known for exceptional fit and an innovative retail model. UpWest is an apparel, accessories and home goods brand with a purpose to Provide Comfort for People & Planet.
The Company has approximately 530 Express retail and Express factory outlet stores in the United States and Puerto Rico, the Express.com online store and the Express mobile app; approximately 60 Bonobos Guideshop locations and the Bonobos.com online store; and 12 UpWest retail stores and the UpWest.com online store. Express, Inc. is traded on the NYSE under the symbol EXPR. For more information about our Company, please visit www.express.com/investor and for more information about our brands, please visit www.express.com, www.bonobos.com or www.upwest.com.
Forward-Looking Statements
Certain statements are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to any historical or current fact and include, but are not limited to (1) guidance and expectations, including statements regarding expected operating margins, comparable sales, effective tax rates, interest income, net income, diluted earnings per share, cash tax refunds, liquidity, EBITDA, free cash flow, eCommerce demand, and capital expenditures, (2) statements regarding expected store openings, store closures, store conversions, and gross square footage, (3) statements regarding the Company's strategy, plans, and initiatives, including, but not limited to, results expected from such strategy, plans, and initiatives, (4) statements regarding the Company’s workforce reduction and other cost reduction actions, including, but not limited to, charges associated with the workforce reduction and the financial benefits (and the timing of the realization of such benefits) expected from such actions, and (5) the anticipated benefits or effects of the Bonobos acquisition, including statements regarding operating results, financial efficiencies, operational synergies, and our plans, objectives, expectations and intentions related to the acquired assets. You can identify these forward-looking statements by the use of words in the future tense and statements accompanied by words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads” or the negative version of these words or other comparable words. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict, and significant contingencies, many of which are beyond the Company's control. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) the duration and severity of ongoing negative macroeconomic conditions caused by the COVID-19 pandemic and their future impact on our business operations, financial condition, liquidity and cash flow; (3) geopolitical risks, including impacts from the ongoing conflict between Russia and Ukraine and increased tensions between China and Taiwan; (4) our ability to operate our business efficiently, manage capital expenditures and costs, and obtain financing when required; (5) our ability to identify and respond to new and changing fashion trends, customer preferences, and other related factors including selling through inventory at an appropriate price; (6) fluctuations in our sales, results of operations, and cash levels on a seasonal basis and due to a variety of other factors, including our product offerings relative to customer demand, the mix of merchandise we sell, promotions, inventory levels, and sales mix between stores and eCommerce; (7) customer traffic at malls, shopping centers, and at our stores; (8) competition from other retailers; (9) our dependence on a strong brand image; (10) our ability to adapt to changing consumer behavior and develop and maintain a relevant and reliable omni-channel experience for our customers, including our efforts to optimize our omni-channel platform through our partnership with WHP Global; (11) the failure or breach of information systems upon which we rely; (12) our ability to protect customer data from fraud and theft; (13) our dependence upon third parties to manufacture all of our merchandise; (14) changes in the cost of raw materials, labor, and freight; (15) labor shortages and supply chain disruption; (16) our dependence upon key executive management; (17) our ability to execute our growth strategy, EXPRESSway Forward, including, but not limited to, engaging our customers and acquiring new ones, executing with precision to accelerate sales and profitability, creating great product and reinvigorating our brand; (18) our substantial lease obligations; (19) our reliance on third parties to provide us with certain key services for our business; (20) impairment charges on long-lived assets; (21) claims made against us resulting in litigation or changes in laws and regulations applicable to our business; (22) our inability to protect our trademarks or other intellectual property rights which may preclude the use of our trademarks or other intellectual property around the world; (23) restrictions imposed on us under the terms of our current credit facility, including asset based requirements related to inventory levels, ability to make additional borrowings, and restrictions on the ability to effect share repurchases; (24) our inability to maintain compliance with covenants in our current credit facility; (25) changes in tax requirements, results of tax audits, and other factors including timing of tax refund receipts, that may cause fluctuations in our effective tax rate; (26) changes in tariff rates; (27) natural disasters, extreme weather, public health issues, including pandemics, fire, acts of terrorism or war and other events that cause business interruption, (28) risks related to our strategic partnership with WHP Global; (29) our ability to realize the expected strategic and financial benefits of the Bonobos acquisition; (30) our failure to maintain compliance with the continued listing requirements of the New York Stock Exchange; and (31) the financial and other effects of our workforce reduction and other cost reduction actions, including our inability to realize the benefits from such actions within the anticipated timeframe. These factors should not be construed as exhaustive and should be read in conjunction with the additional information concerning these and other factors in Express, Inc.'s filings with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.
Schedule 1
Express, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)
October 28, 2023
January 28, 2023
October 29, 2022
ASSETS
Current Assets:
Cash and cash equivalents
$
34,643
$
65,612
$
24,592
Receivables, net
32,136
12,374
16,669
Income tax receivable
2,439
1,462
1,532
Inventories
480,867
365,649
422,666
Prepaid royalty
18,712
59,565
—
Prepaid rent
5,083
7,744
5,964
Other
24,999
21,998
26,100
Total current assets
598,879
534,404
497,523
Right of Use Asset, Net
534,209
505,350
533,506
Property and Equipment
1,017,462
1,019,577
1,002,902
Less: accumulated depreciation
(900,482
)
(886,193
)
(869,910
)
Property and equipment, net
116,980
133,384
132,992
Non-Current Income Tax Receivable
45,079
52,278
52,278
Equity Method Investment
166,210
166,106
—
Other Assets
6,401
6,803
4,672
TOTAL ASSETS
$
1,467,758
$
1,398,325
$
1,220,971
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term lease liability
$
189,296
$
189,006
$
190,874
Accounts payable
263,221
191,386
229,661
Deferred royalty income
3,832
19,852
—
Deferred revenue
39,395
35,543
31,947
Short-term debt
4,159
—
4,500
Accrued expenses
113,165
105,803
118,984
Total current liabilities
613,068
541,590
575,966
Long-Term Lease Liability
417,590
406,448
437,091
Long-Term Debt
270,513
122,000
230,861
Other Long-Term Liabilities
18,632
20,718
9,454
Total Liabilities
1,319,803
1,090,756
1,253,372
Commitments and Contingencies
Total Stockholders’ Equity (Deficit)
147,955
307,569
(32,401
)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
1,467,758
$
1,398,325
$
1,220,971
Schedule 2
Express, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Net Sales
$
454,063
$
434,145
$
1,272,664
$
1,349,849
Cost of Goods Sold, Buying and Occupancy Costs
344,546
313,528
998,985
944,031
GROSS PROFIT
109,517
120,617
273,679
405,818
Operating Expenses (Income):
Selling, general, and administrative expenses
143,645
150,090
429,084
434,461
Royalty income
(5,387
)
—
(16,020
)
—
Other operating expense (income), net
1
36
(957
)
(443
)
TOTAL OPERATING EXPENSES
138,259
150,126
412,107
434,018
OPERATING LOSS
(28,742
)
(29,509
)
(138,428
)
(28,200
)
Interest Expense, Net
6,170
4,668
12,987
11,962
Other Income, Net
—
(509
)
—
(1,385
)
LOSS BEFORE INCOME TAXES
(34,912
)
(33,668
)
(151,415
)
(38,777
)
Income Tax Expense
1,899
780
2,879
549
NET LOSS
$
(36,811
)
$
(34,448
)
$
(154,294
)
$
(39,326
)
EARNINGS PER SHARE:
Basic(1)
$
(9.83
)
$
(10.09
)
$
(41.42
)
$
(11.59
)
Diluted(1)
$
(9.83
)
$
(10.09
)
$
(41.42
)
$
(11.59
)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic(1)
3,746
3,414
3,725
3,394
Diluted(1)
3,746
3,414
3,725
3,394
1.
All share and per share amounts have been retrospectively adjusted to reflect the Company’s 1-for-20 reverse stock split which was effected after the close of market on August 30, 2023.
Schedule 3
Express, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Thirty-Nine Weeks Ended
October 28, 2023
October 29, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(154,294
)
$
(39,326
)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization
40,529
45,076
Loss on disposal of property and equipment
42
57
Impairment of property, equipment and lease assets
2,112
—
Share-based compensation
(4,951
)
7,617
Landlord allowance amortization
(230
)
(310
)
Changes in operating assets and liabilities:
Receivables, net
(17,690
)
(4,925
)
Income tax receivable
6,222
(145
)
Prepaid royalty
40,853
—
Inventories
(63,925
)
(63,871
)
Deferred royalty income
(16,020
)
—
Accounts payable, deferred revenue, and accrued expenses
51,336
(4,865
)
Other assets and liabilities
(15,351
)
(35,177
)
NET CASH USED IN OPERATING ACTIVITIES
(131,367
)
(95,869
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(23,288
)
(24,340
)
Acquisition, net of cash acquired
(28,300
)
—
Costs related to WHP transaction
(104
)
—
NET CASH USED IN INVESTING ACTIVITIES
(51,692
)
(24,340
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings under the revolving credit facility
286,250
252,000
Repayment of borrowings under the revolving credit facility
(195,606
)
(143,000
)
Proceeds from borrowings under the term loan facility
65,000
—
Repayment of borrowings under the term loan facility
—
(3,375
)
Costs incurred in connection with debt arrangements
(3,185
)
—
Repurchase of common stock for tax withholding obligations
(369
)
(2,000
)
NET CASH PROVIDED BY FINANCING ACTIVITIES
152,090
103,625
NET DECREASE IN CASH AND CASH EQUIVALENTS
(30,969
)
(16,584
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
65,612
41,176
CASH AND CASH EQUIVALENTS, END OF PERIOD
$
34,643
$
24,592
Schedule 4
Express, Inc. Supplemental Information - Consolidated Statements of Income Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited)
The Company supplements the reporting of its financial information determined under United States generally accepted accounting principles (GAAP) with certain non-GAAP financial measures: adjusted operating income (loss), adjusted net income (loss), adjusted diluted earnings per share and EBITDA. Management strongly encourages investors and stockholders to review the Company's financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.
Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share
Adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share exclude the impact of certain items that the Company does not believe are directly related to its underlying operations.
How These Measures Are Useful
The Company believes that these non-GAAP measures provide additional useful information to assist stockholders in understanding its financial results and assessing its prospects for future performance. Management believes adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share are important indicators of the Company's business performance because they exclude items that may not be indicative of, or are unrelated to, the Company's underlying operating results, and may provide a better baseline for analyzing trends in the business.
Limitations of the Usefulness of These Measures
Because non-GAAP financial measures are not standardized, adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share may differ from similarly titled measures used by other companies due to different methods of calculation. These adjusted financial measures should not be considered in isolation or as a substitute for reported operating income (loss), net income (loss), or diluted earnings per share. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed together with the GAAP results, provide a more complete understanding of the Company's business. A reconciliation of adjusted operating income (loss), adjusted net income (loss) and adjusted diluted earnings per share to the most directly comparable GAAP measure is set forth below:
Thirty-Nine Weeks Ended October 28, 2023
(in thousands, except per share amounts)
Operating Loss
Income Tax Impact(a)
Net Loss
Diluted Earnings per Share
Weighted Average Diluted Shares Outstanding(e)
Reported GAAP Measure
$
(138,428
)
$
(154,294
)
$
(41.42
)
3,725
Impact of restructuring(b)
4,658
—
4,658
1.25
Acquisition-related and integration costs(c)
4,595
—
4,595
1.23
Impairment of property, equipment and lease assets(d)
996
—
996
0.27
Adjusted Non-GAAP Measure
$
(128,179
)
$
(144,045
)
$
(38.67
)
a.
Items tax effected at the applicable deferred or statutory rate offset by the recording of a non-cash valuation allowance.
b.
Represents restructuring charges primarily related to employee severance and benefits of which $2.7 million was recorded in cost of goods sold, buying and occupancy costs and $2.0 million was recorded in selling, general and administrative expenses in the unaudited Consolidated Statements of Income and Comprehensive Income.
c.
Represents acquisition-related and integration costs incurred in connection with the acquisition of Bonobos, which were recorded in selling, general and administrative expenses in the unaudited Consolidated Statements of Income and Comprehensive Income.
d.
Represents a non-cash impairment charge taken against certain long-lived store related assets and right of use assets, which was recorded in cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income.
e.
Share amount reflects the Company’s 1-for-20 reverse stock split which was effected after the close of market on August 30, 2023.
EBITDAEBITDA is defined as net income (loss) before interest expense (net of interest income), income tax expense and depreciation and amortization expense.
How This Measure Is Useful
When used in conjunction with GAAP financial measures, EBITDA is a supplemental measure of operating performance that the Company believes is a useful measure to facilitate comparisons to historical performance. EBITDA is used as a performance measure in the Company's long-term executive compensation program for purposes of determining the number of equity awards that are ultimately earned and is also a metric used in our short-term cash incentive compensation plan.
Limitations of the Usefulness of This Measure
Because non-GAAP financial measures are not standardized, EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Therefore, this measure may not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the GAAP financial measures. A reconciliation of EBITDA to the most directly comparable GAAP measures, is set forth below:
Thirteen Weeks Ended
Thirty-Nine Weeks Ended
(in thousands)
October 28, 2023
October 29, 2022
October 28, 2023
October 29, 2022
Net loss
$
(36,811
)
$
(34,448
)
$
(154,294
)
$
(39,326
)
Interest expense, net
6,170
4,668
12,987
11,962
Income tax expense
1,899
780
2,879
549
Depreciation and amortization
11,679
14,550
40,800
43,763
EBITDA (Non-GAAP Measure)
$
(17,063
)
$
(14,450
)
$
(97,628
)
$
16,948
Schedule 5
Express, Inc.
Real Estate Activity
(Unaudited)
Third Quarter 2023 - Actual
October 28, 2023 - Actual
Company-Operated Stores
Opened
Closed
Store Count
Gross Square Footage
Retail Stores
—
(1
)
324
Outlet Stores
1
(1
)
194
Express Edit Stores
—
—
11
UpWest Stores
1
—
12
Bonobos Guideshops
—
(1
)
59
TOTAL
2
(3
)
600
4.5 million
Fourth Quarter 2023 - Projected
February 3, 2024 - Projected
Company-Operated Stores
Opened
Closed
Store Count
Gross Square Footage
Retail Stores
—
(3
)
321
Outlet Stores
—
—
194
Express Edit Stores
—
—
11
UpWest Stores
1
(2
)
11
Bonobos Guideshops
—
—
59
TOTAL
1
(5
)
596
4.5 million
Full Year 2023 - Projected
February 3, 2024 - Projected
Company-Operated Stores
Opened
Closed
Store Count
Gross Square Footage
Retail Stores
—
(11
)
321
Outlet Stores
1
(5
)
194
Express Edit Stores
1
—
11
UpWest Stores
3
(5
)
11
Bonobos Guideshops
—
(1
)
59
TOTAL
5
(22
)
596
4.5 million
View source version on businesswire.com: https://www.businesswire.com/news/home/20231129821961/en/
INVESTOR CONTACT Greg Johnson VP, Investor Relations gjohnson@express.com (614) 474-4890
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