* Sees 1st-quarter earnings $0.12-$0.18/shr vs est $0.41/shr
* Forecasts fall in comparable store sales
* 4th-quarter earnings $0.57/shr vs est $0.59/shr
* Rise in store traffic not imminent - CEO
* Shares fall as much as 14.5 pct
(Adds CEO, CFO comments, background; updates shares)
By Shailaja Sharma and Aditi Shrivastava
March 12 Apparel retailer Express Inc
said it expected its profit to slide by more than half in the
current quarter, blaming deep discounts and a decline in store
Shares of Express, formerly a division of L Brands Inc
, fell as much as 14.5 percent in early trading after the
company's fourth-quarter results missed analysts' average
"Our first-quarter guidance reflects year-to-date traffic
and comparable sales as well as our belief that a material
uptick in traffic is not necessarily imminent," Chief Executive
Michael Weiss said in a statement.
Express, which has more than 600 stores in the United
States, Canada and Puerto Rico, sells formal and casual wear and
accessories to young men and women.
In the past two days, apparel retailers American Eagle
Outfitters Inc and Urban Outfitters Inc have
warned that results in the current quarter would be hurt by
stiff competition and choppy sales trends at malls.
"In light of the slow start to the year, we've taken an
appropriate yet cautious approach to our guidance," Chief
Financial Officer Paul Dascoli said on a post-earnings
Nomura Securities analyst Simeon Siegel said discounting is
likely to continue across mall storefronts as retailers try to
The weak mall traffic that hurt retailers was in part due to
the unusually cold and snowy weather that kept shoppers away
over the last three months.
According to ShopperTrak, the number of people walking into
stores across the United States declined 14.6 percent between
Thanksgiving and Christmas in 2013.
Columbus, Ohio-based Express forecast first-quarter earnings
of 12 to 18 cents per share, less than half the 38 cents per
share it earned a year earlier.
The forecast is also in sharp contrast to the average
analyst estimate which called for profit to rise slightly to 41
cents per share, according to Thomson Reuters I/B/E/S.
The company said comparable sales would fall in the low
double digits to the high single digits in the quarter.
Comparable-store sales rose 1 percent in the fourth quarter
ended Feb. 1.
"A difficult retail environment will hold back results in
the first half despite what we believe is on-trend merchandise,"
Stifel Research analyst Richard Jaffe said.
HOLIDAY QUARTER MISSES
Express said an "extremely promotional" holiday season and
"disappointing mall traffic" led to its fourth-quarter results
being below its own expectations.
The duration and the extent of discounts offered took a toll
on gross margin, which fell to 32 percent in the quarter from 35
percent a year earlier.
"Our primary disappointment was that we sold so much more
product at promotional prices than initially planned," CEO Weiss
said on the call.
However, Weiss said Express would not eliminate promotions
that are important during key traffic days.
The company's net income fell to $47.93 million, or 57 cents
per share, from $63.94 million, or 75 cents per share, a year
Sales fell 2 percent to $715.9 million due to the deep
discounting and weak traffic.
Analysts on average had expected a profit of 59 cents on
revenue of $721.1 million.
Shares of Express, which went public in 2010, were down 11
percent at $16.17 in morning trading on the New York Stock
Exchange. They touched a more than one-year low of $15.60.
(Editing by Savio D'Souza and Maju Samuel)