Express, Inc, a specialty retail apparel chain operating more than 620 stores, announced fourth quarter and full year 2012 financial results for the fourteen and fifty-three week periods ended February 2, 2013. This compares to 2011, which was a fifty-two week year that included thirteen weeks in the fourth quarter. Comparable sales for the fourth quarter and full year 2012 were calculated using the fourteen and fifty-three week periods ending February 4, 2012, respectively.
Fourth Quarter Operating Results (the fourteen week period ended February 2, 2013 compared to the thirteen week period ended January 28, 2012):
Net sales increased 8% to $728.7 million from $673.2 million in the fourth quarter of 2011 and included $27.0 million related to the fourteenth week;
Comparable sales, which compares the fourteen week period ended February 2, 2013 to the fourteen week period ended February 4, 2012 and is inclusive of e-commerce sales, increased 1.5%, following a 5% increase in the fourth quarter of 2011;
Gross margin was 35.1% of net sales compared to 37.2% in the fourth quarter of 2011;
Selling, general, and administrative (SG&A) expenses totaled $144.4 million, or 19.8% of net sales, compared to $141.6 million, or 21.0% of net sales, in the fourth quarter of 2011, which included non-core operating costs before tax of $0.4 million related to the secondary offering completed in December 2011;
Operating income was $111.4 million, or 15.3% of net sales, compared to $108.9 million, or 16.2% of net sales, in the fourth quarter of 2011;
Interest expense totaled $5.2 million compared to $8.0 million in the fourth quarter of 2011, which included a $2.4 million loss on extinguishment of debt before tax related to the full prepayment of the $125 million Term Loan;
Income tax expense was $42.1 million, at an effective tax rate of 39.7%, compared to $40.8 million, at an effective tax rate of 40.3%, in the fourth quarter of 2011; and
Net income was $63.9 million, or $0.75 per diluted share, with the fourteenth week contributing approximately $0.04 per diluted share. This compares to net income of $60.4 million, or $0.68 per diluted share in the fourth quarter of 2011, which included the following non-core operating costs after tax: (i) $0.3 million, or approximately $0.01 per diluted share, of costs related to the secondary offering completed in December 2011; and (ii) a $1.5 million, or $0.01 per diluted share, loss on extinguishment of debt related to the full prepayment of the $125 million Term Loan. Net income in the fourth quarter of 2011, adjusted for non-core operating costs noted above, was $62.1 million, or $0.70 per diluted share.
Full Year Operating Results (the fifty-three week period ended February 2, 2013 compared to the fifty-two week period ended January, 28, 2012):
Net sales increased 4% and included $27.0 million related to the fifty-third week;
Comparable sales, which compares the fifty-three week period ended February 2, 2013 to the fifty-three week period ended February 4, 2012 and is inclusive of e-commerce sales, were flat, following a 6% increase in 2011;
Gross margin was 34.6% of net sales compared to 36.4% in 2011;
SG&A expenses totaled $491.6 million, or 22.9% of net sales. This compares to $483.8 million, or 23.3% of net sales, in 2011, which included $1.0 million of non-core operating costs before tax related to the secondary offerings completed in April 2011 and December 2011;
Operating income was $251.6 million, or 11.7% of net sales, compared to $270.9 million, or 13.1% of net sales, in 2011;
Interest expense totaled $19.6 million compared to $35.8 million in 2011, which included a $9.6 million loss on extinguishment of debt before tax related to the repurchases of $49.2 million of Senior Notes, the amendment of the $200 million Revolving Credit Facility, and the full prepayment of the $125 million Term Loan;
Income tax expense was $92.7 million, at an effective tax rate of 40.0%, compared to $94.9 million, at an effective tax rate of 40.3%, in 2011.
About Express:
Express is a specialty apparel and accessories retailer of women's and men's merchandise, targeting the 20 to 30 year old customer. The Company has over 30 years of experience offering a distinct combination of fashion and quality for multiple lifestyle occasions at an attractive value addressing fashion needs across work, casual, jeanswear, and going-out occasions.
The Company currently operates over 620 retail stores, located primarily in high-traffic shopping malls, lifestyle centers, and street locations across the United States, in Canada, and in Puerto Rico.
