Express Triples Profit

Express Inc. said income tripled in its latest quarter, as the apparel retailer's sales and profit margin grew amid better product mix and scaled-back promotional activity.

The company's per-share profit easily beat its forecast and as a result, Express further lifted its full-year outlook, and issued upbeat guidance for the current quarter.

Shares in the company, up about 19% this year, surged 13% premarket.

Mall-based chains like Express—which spun off from L Brands Inc. in 2007—have struggled in recent years amid dwindling foot traffic and margin-eating promotions.

But on Wednesday, Chief Executive David Kornberg said inventory management and improved product assortment "enabled us to reduce the breadth, depth and frequency of our promotions."

Overall, the retailer booked a profit of $21 million, or 25 cents a share, up from $6.9 million, or 8 cents, a year earlier. Revenue increased 11% to $535.6 million.

The company had guided for 13 to 16 cents in per-share profit. Analysts had anticipated $504.8 million in sales.

During the period, sales at stores open at least a year—including e-commerce—jumped 7%, a sharp reversal from a year earlier. In last year's quarter, same-store sales fell 5%.

Meanwhile, Express managed to improve its gross profit margin to 33.1% from 28.3%.

For the year ending in January, Express now expects to earn $1.30 to $1.37 a share, up from its earlier prediction of $1.11 to $1.22 a share. The company expects to achieve same-store sales growth in the mid-single digits; previously, it guided for growth in the low-single digits. Analysts have projected $1.20 in full-year earnings per share, according to Thomson Reuters.

Express said third-quarter profit will be between 26 cents and 29 cents a share, above the 25 cents analysts have projected.

Write to Lisa Beilfuss at [e-mail]

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(END) Dow Jones Newswires

August 26, 2015 08:35 ET (12:35 GMT)

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