Second quarter 2023 net sales and diluted loss
per share expected to be in the range of previously-announced
outlook
Board of Directors authorizes a 1-for-20
reverse stock split
Fashion apparel retailer Express, Inc. (NYSE: EXPR) (the
“Company”) today announced certain preliminary financial results
for the second quarter 2023, including net sales which are expected
to be in the range of its previously-announced outlook of $400
million to $450 million, and diluted loss per share which is
expected to be in the range of its previously-announced outlook of
$0.50 to $0.60.
“We expect second quarter net sales and diluted loss per share
to be within the ranges of our outlook. Net sales for the Express
brand improved sequentially throughout the second quarter driven by
the corrective actions we have taken to address imbalances in our
women’s assortment architecture. These results give us confidence
that we will continue to see improvement in net sales for the
Express brand in the back half of the year,” said Tim Baxter, Chief
Executive Officer. “Additionally, the integration of the Bonobos
brand into our omnichannel platform and its performance are on
track.”
“As we transform EXPR to create shareholder value, we are
committed to driving long-term profitable growth and delivering
positive free cash flow in our core Express business. We are
conducting a comprehensive review of our business model to identify
actions that we believe will meaningfully reduce pre-tax costs and
enable a more efficient and effective organization. Today we are
announcing a goal to deliver $150 million in annualized expense
reductions by 2025 versus 2022 and have already identified and
implemented $80 million for 2023 and $120 million for 2024. In
addition, we are also aggressively pursuing at least $50 million in
gross margin expansion opportunities by leveraging efficiencies in
sourcing, production and the supply chain,” continued Baxter.
In May 2023, the Company announced it had identified and
implemented $65 million of annualized cost reductions for fiscal
2023 versus fiscal 2022. Today the Company announced an additional
$15 million of savings for a total of $80 million in annualized
cost reductions identified and implemented for fiscal 2023. The
annualized cost reductions of $120 million for fiscal 2024 include
a workforce reduction which is expected to generate savings of
approximately $30 million.
Charges associated with the workforce reduction are estimated to
be approximately $5 million and were recognized in the second
quarter of 2023.
The preliminary financial results included in this press release
are unaudited and based on information available to the Company as
of the date of this press release. Our actual financial results for
the second quarter of 2023 may differ (and such differences may be
material) from these preliminary estimates due to the completion of
our financial closing procedures, final adjustments and other
developments that may arise between the date of this press release
and the time that our full financial statements for the second
quarter of 2023 are finalized. As a result, you should not place
undue reliance on these preliminary estimates, as they may differ
materially from our actual results, including as a result of the
factors discussed under “Forward-Looking Statements” below.
1-for-20 Reverse Stock Split
On August 14, 2023, the Board of Directors authorized the
implementation of a 1-for-20 reverse stock split of the Company’s
common stock. The reverse stock split is expected to be effected
after market close on or about August 30, 2023 (the “Effective
Date”), with shares of the Company’s common stock expected to begin
trading on a split-adjusted basis at market open on or about August
31, 2023. Following the reverse stock split, the Company’s common
stock will continue to trade on New York Stock Exchange (NYSE)
under the symbol “EXPR” with the new CUSIP number, 30219E 202. The
implementation of the reverse stock split is expected to regain
compliance with the minimum price criteria set forth in the
continued listing standards of the New York Stock Exchange.
About EXPR
EXPR 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 over 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; over 60 Bonobos Guideshop
locations and the Bonobos.com online store; and 13 UpWest retail
stores and the UpWest.com online store. EXPR 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) statements
regarding the Company’s preliminary financial results for the
second quarter of 2023, including estimated net sales and diluted
earnings (loss) per share, and (2) 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. 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 regain compliance with the
continued listing requirements of the New York Stock Exchange, or
any future failure to meet those requirements; and (31) the
financial and other effects of our workforce reduction and other
cost reduction actions. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230817269271/en/
Investor Contact Greg Johnson VP, Investor Relations
gjohnson@express.com 614-474-4890
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