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Express lowers Q3 profit outlook, shares tumble

Express lowers Q3 profit outlook, shares tumble

Specialty clothing retailer Express (NYSE:EXPR) downgraded its fiscal third-quarter profit projections Tuesday, as less people frequented its stores in September. 

The company's stock fell over 18 per cent in pre-market trade.  

The Columbus, Ohio-based company, which operates more than 600 locations, expects to see third quarter earnings of 14 to 20 cents per-share. 

Analysts polled by Bloomberg expected to see per-share earnings of 30 cents prior to the announcement, on sales of $498 million for the period that ends October 27. 

For the 13-week period, the fashion retailer also forecasted same-store sales to decline in the mid-single digit range.

Comparable sales are a key metric used to gauge a retailer's financial health as they exclude results from shops that recently opened or closed during the year. 

Chief executive, Michael Weiss, said that sales in August were in line with expectations, but trends became increasingly difficult in September due to an "abrupt change" in traffic. 

"This along with increased promotional activity to maintain our inventory discipline led to the revision in our third quarter sales and earnings guidance," he said. 

The company noted, however, that traffic trends began to improve in the final week of September. It therefore said it has the proper initiatives in place to improve both sales and earnings performance.

"We remain confident in our strategies, which we believe position us to achieve our long term goals in our on-going efforts to provide compelling fashion and value to our 20-to-30-year old demographic around the globe," Weiss said.   

Express is scheduled to report third-quarter results by November 26. It plans to give an update for both the fourth quarter and the fiscal year, when it reports results. 

Shares, in pre-market trade, lost 18.05 per cent to $12.30 each on the New York Stock Exchange

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