The company said that third quarter comparable sales fell by 30% year-on-year, while consolidated net sales dropped 34%, to $322.1 million. Express Inc said these falls came as a result of “continued steep declines in wear-to-work and occasion-based categories”.
On the basis of its reduced sales output, the company booked a third quarter operating loss of $110.9 million, widening from a $6.7 million loss during Q3 2019. Similarly, the Group’s shareholders saw a $1.39 diluted loss per share during Q3. With a slight glimmer of hope, Express said that its digital strategy gained momentum, with third quarter online transactions rising 17%.
In terms of its cash position, Express finished the quarter with $107 million in cash. During the period, it laid off 10% of its corporate staff, which it said will result in $13 million in cost reductions in 2021. It also managed to decrease its selling, general and amin expenses by almost $20 million, though the end amount still represented 38.8% of Q3 net sales, versus 29.5% of net sales in Q3 2019.
Speaking on its performance, CEO, Tim Baxter, commented: “In the third quarter, we continued to advance the EXPRESSway Forward strategy while taking decisive and appropriate action to manage our liquidity. Our eCommerce business continues to gain momentum and the new fashion product that fully reflects the Express Edit viewpoint is outpacing the balance of our assortment,”
“We have effectively managed that which was within our control, and as I look ahead, I am optimistic about our ability to deliver improved results and cautious about the continued uncertainty brought about by the current environment. Our strategy is the right one, the changes to our product presentation and brand positioning are the right ones, and our financial actions are the right ones. As we move into 2021, we remain focused on delivering our long-term goal of a mid-single digit operating margin and profitable growth.”
Following the update, Express shares dropped 25.95%, down to $1.17 a share 03/12/20 21:30 GMT. This is short of its post-lockdown high of $2.55, and around 56.7% shy of analysts’ target price of $1.83 a share.
Analysts currently have a Hold stance on the stock, while the Marketbeat community offers a 50.93% ‘Outperform’ stance.