Shares fell 25.47 percent, trading at $17.21, after Express also forecasted its second-quarter results below Street estimates and lowered its full-year earnings guidance.
For the three month period that ended April 28, the company posted net income of $42.1 million, or 47 cents per diluted share, compared to net income of $35.0 million, or 39 cents per diluted share in the first quarter of 2011, when Express had $2.4 million in non-core operating costs.
Net sales increased six percent to $496.0 million, from $467.4 million in the year earlier quarter.
Analysts had forecast earnings of 49 cents per share on revenues of $503.17 million, according to Thomson Reuters.
"We had a solid start to the year, reporting a double digit increase in earnings per diluted share while making steady progress toward our long-term goals,” said president and CEO Michael Weiss.
"The first quarter included the roll out of our new loyalty program, Express NEXT, to all stores in the United States and the opening of four new stores in our new design format.
"In addition, shortly after quarter end, we entered into a multi-country international franchise arrangement, marking our entry into Latin America."
Comparable sales increased four percent in the latest period - lower than the company’s reported eight percent increase in comparable sales in the first quarter of 2011.
Same store sales are considered to be a key indicator to measure a retailer’s financial health as they exclude sales from stores that recently opened or closed during the year.
Express said that it saw a double digit increase in e-commerce sales.
The company reported that gross margin decreased 10 basis points to 38.1 percent, compared to 38.2 percent a year earlier.
During the first quarter, Express opened four new stores in the United States and closed seven stores. At quarter end, the company operated 606 stores and had approximately 5.2 million gross square feet in operation.
Express said it currently expects second quarter comparable sales to increase in the low to mid single digit range, compared to an increase of six percent in the second quarter of 2011.
The company said that profit is expected in the range of $13.0 to $16.0 million, or 15 to 18 cents per diluted share, based on 89.4 million weighted average shares outstanding.
Analysts are expecting 20 cents per share in earnings on $480 million in revenue for the second quarter.
For the full year, Express said it currently expects comparable sales to increase in the low to mid single digit range. Earnings for 2012 are anticipated between $1.79 to $1.89 per diluted share, based on 89.6 million weighted average shares outstanding.
Analysts expected earnings per share of $1.95 for the year, and revenues of $2.26 billion.
Express said it plans to open approximately 30 new stores in 2012, including 23 in the United States and seven in Canada, and close approximately 12 stores in the United States, to end the year with 627 locations.
The company is a specialty apparel and accessories retailer of women's and men's merchandise, targeting the 20 to 30 year old customer. It currently operates more than 600 retail stores, located primarily in shopping malls, lifestyle centers, and street locations across the United States, in Canada, and in Puerto Rico.