* Estimates third-quarter earnings of $0.16-$0.20/share
* Shares down 16 pct premarket
Oct 2 Apparel retailer Express Inc said
its third-quarter earnings would miss its forecast as sales
trends weakened in September, sending its shares down 16 percent
in premarket trading.
The company, which sells clothes and accessories to 20- to
30-year-old men and women, said higher promotional activity to
check inventory levels also contributed to the cut in estimates.
The retailer said in August that it would resort to
markdowns to clear its inventory glut that was likely to
pressure sales and margins in the third quarter.
"Express will be challenged in the third quarter and we lack
visibility for improvement in the fourth quarter, which makes us
cautious for the near term," analyst Richard Jaffe of Stifel
Nicolaus wrote in a client note.
Inventory at the end of the second quarter stood at $210.4
million as sales of its pricier knit sweaters were weak.
The retailer had revised its sales strategy by introducing
affordable knit tops, casual and dressy sweaters in the women's
Express said it remains confident of this strategy and said
its new sweater styles helped improve traffic in the final week
The company also said it would focus on maintaining control
of inventory and expenses to improve its earnings.
Express expects to earn 16 cents to 20 cents per share for
the quarter, down from the previous forecast of 27 cents to 32
Analysts on average were expecting the company to earn 29
cents per share, according to Thomson Reuters I/B/E/S.
Express cut its full-year profit forecast for the second
time in three months in August.
The company said it expects third-quarter comparable sales
to decline in the mid-single-digit range.
Express shares were down at $12.55 in premarket trade. They
had closed at $15.01 on the New York Stock Exchange on Monday.