Why Express Shares Plunged
Mar 13th 2013 4:50PM
Updated Mar 13th 2013 4:56PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of young-adult apparel retailer Express sank 10% today after issuing guidance that disappointed Wall Street.
So what: The company's fourth-quarter results managed to top expectations -- EPS of $0.75 on revenue of $728.7 million versus the consensus of $0.74 and $722.5 million -- but downbeat guidance for the full year is forcing analysts to recalibrate their growth estimates. In addition, gross margin during the quarter declined 210 basis points to 35.1%, reigniting concerns over increasing costs and competition.
Now what: Management now sees full-year EPS of $1.40-$1.54, well short of Wall Street's estimate of $1.72. "While our guidance anticipates a softer start to the year, reflecting the impact of reduced traffic levels and consumer spending in the month of February, our spring merchandise has been received favorably by our customers, resulting in an improvement in conversion," said Chairman and CEO Michael Weiss. Of course, with the stock still up more than 60% from its 52-week lows even after today's plunge, I'd wait for more of a pullback before buying into that optimism.
Interested in more info Express? Add it to your watchlist.
The article Why Express Shares Plunged originally appeared on Fool.com.Fool contributor Brian Pacampara and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.