man and woman garment and accessory retailers, including shown and UpWest brands, revealed in Q3 income Thursday before the market opens, increase sales and book a profit of $13 million. This is higher than last quarter’s profit of $10.6 million. As a result, Express has updated its Q4 guidance.
“Motivation is continuing to build as ExpThe Way Forward ress strategy still holds,” said Tim Baxter, CEO of Express. WWD in an exclusive interview. “It’s fun to offerwith consecutive quarters of profit growth compared to 2019.”
“We saw a It bodes well for us as we move into the fourth quarter, Baxter said.
Highlights include men’s suits, up 20% in volume in the most recent quarter; women Dresses, up 22 percent; denim fabric up 12 percent, and men’s polo shoes and graphics by 39 percent, all compared to 2019 levels.
“We at Express have a different approach,” says Baxter. “A lot of the things that are driving growth for us are real customers coming to us because fashion. ”
All of this helped the retailer grow net sales by 47% to $472 million in the most recent quarter, the three-month period ending October 30, up from $322 million a year ago. NSConsolidated comparable sales were up 46 percent, from a year ago, or up 3 percent from 2019. Comparable retail sales, including traditional stores Express and ecommerce businesses, grew 52% in the quarter, compared with 2020, while comparable outlet store sales grew 33% in the same time frame, compared with a year earlier.
E-commerce sales also continued to grow, up 26% from 2020 levels or up 21% from pre-pandemic levels in 2019. Express previously stated a goal of $1 billion in commerce revenue. annual e-commerce by 2024. Baxter did not say its current levels, but said Express “drives demand up 26% from 2020 and up 19% from 2019. And we’re on track to hit our billion-dollar goal.”
Other types of tailwinds include Express ‘Community Trade Program, among them the retailer named designer Rachel Zoe its lead style editor in November. Baxter says the program helps speed up the process of attracting new customers to the brand.
The company posted a profit of more than $13 million, compared with a loss of $90.3 million in the same period last year, and As a result, its instructions have been updated.
Express now expects fourth-quarter comparative sales to rise in the low-index range, with gross margin increasing by about 100 basis points during the quarter. The guidance covers about $15 million in costs related to supply chain pressures in the fourth quarter. CEO told WWD that the company will also likely have an additional $10 million in supply chain difficulties in the first quarter.
“In total, we will spend about $25 million to mitigate supply chain challenges,” said Baxter. “I think that number is considerably lower than ghostsny of our competitors. We are better positioned from an inventory level and components standpoint to continue driving positive comparable sales and expanding margins in the fourth quarter.
“In terms of supply chain, I think we’ve done a great job in mitigating supply chain challenges,” he continued. “We actually sped up a lot of deliveries back into the spring, in anticipation of supply chain challenges, and actually ended Q3 and started Q4 with about 9% more inventory. compared to 2019. That was done very, very strategically. , to ensure that we will have the supply to meet the demand of the fourth quarter. ”
The company ended the quarter with $36.7 million in cash and cash equivalents, over $108 million in long-term debt and 570 brick-and-mortar stores, or 351 Express locations, 207 stores, five Express Edits and seven UpWest units.
While Baxter said in-store traffic continues to decline, compared to pre-pandemic levels, it is improving at a faster rate overall. garment, or general shopping mall traffic. In addition, Express driving average unit increased by 27% retail in its stores.
“If traffic continues to drop, you have to be able to drive higher average unit retail,” explains Baxter.NS. “You have to be able to drive higher conversions. And we are doing it. We are addressing many of the challenges posed by less traffic with higher conversions and higher average retail units.”
Baxter added that the higher the price – unlike some of their Express industry peers’ – To be “not a response to the cost of inflation. We actually put significantly more value in terms of product and quality into our products, which drove the average retailer higher. ”
Going forward, Express will continue to update its store fleet with additional smaller format stores or Express Edit locations, although Baxter did not say how many or which markets.
“It’s a concept that we’ll continue to roll out as we learn more and more about it,” he said. “We have also seen an increase in our e-commerce sales in the zip codes around Express Edit stores, which again speaks to the power of an omnichannel brand and the desire customers have. can shop for a brand where and how they want. If you see the store all the time, it becomes the center of attention. Most of these stores are located in high-traffic locations, so if you walk past the store all the time, even if you may not visit the store all the time, it is brand stimulus. “
Shares of Express, closed down 7.14% to $3.38 a day on Wednesday, up about 114% year-over-year.
https://wwd.com/business-news/financial/express-earnings-tim-baxter-13-million-profits-1235005604/ Express CEO on increasing profitability and the way forward – WWD