Express stock declines on Q4 earnings

Yahoo Finance Live anchors Brad Smith and Jared Blikre discuss the decline in stock for Express.

Video Transcript

BRAD SMITH: We're taking a look at shares of Express, ticker symbol EXPR. Lower after missing revenue estimates in its latest quarter. The retailer saw sales decline while expecting margin pressure and recessionary environments experienced in the back half of the year to continue. Taking a look at the actuals versus the estimates, it was a miss on both the top and bottom lines here, as we mentioned.

And a few things to really call out here. Number one, of course, was the miss on the net sales, that declined by about 14% year-over-year. Comp sales for retail, that was down by about 15%. And inventory, that was up by about 2%.

What we have heard from many of the companies, whether it be Nike or some of the retailers in the different elements of footwear and apparel, is that there has been inventory improvement as compared to last year, which was, of course, the big concern. And so now it's a larger question of what some of the trends are that they're looking at in their consumer.

To say that, hey, they're still going to come out and spend, even as discretionary spending has certainly taken a bit of a hit on a household or even individual level as well.

JARED BLIKRE: Yes. This company, it's-- well, let's not forget there was a meme stock, and this is a consumer facing brand first of all. But I think this just kind of highlights the execution strategies, the haves and the have nots that we've seen emerge from the pandemic. And unfortunately, Express is a have not, it looks like, just based on this you said, comp sales down 13%.

You look out-- you to look down to the guidance here, first quarter, they're expecting comparable sales of negative low double digits. They're expecting a loss per share of 70 to $0.80. I don't see anything really constructive here. In 2023, their look-- their outlook reflects improved sales trends through the year, OK?

Well, improve sales trends throughout the year, if they're trying to back down on expenses, if they're worried about their margins, that's a clear story that inflation costs, both on the labor side, probably on the good side, have really eaten at them. If they're trying to work down their inventory, well, guess what? Inventory was up 1.9% as of the reporting quarter.

So I just-- I don't see a lot of-- I guess I can chart the stock here. If we go to the YFi Interactive, this is a stock that has been down quite a bit.

BRAD SMITH: Yeah, I took a look at the chart this morning, it wasn't good.

JARED BLIKRE: Yeah, exactly. Well, year-to-date, it's down 16 and 2/3 of a percent. But let's take a look at the five-year chart so we can see what happened with GameStop, and we had these huge spikes here. We all remember what happened there, but it's been a really slow steady slog down. And $0.85, guess what? That is a penny stock.

BRAD SMITH: Yeah.

JARED BLIKRE: It's a penny stock, Brad.

BRAD SMITH: We heard even more about their Expressway Forward strategy, around product brand, customer execution. That execution is going to need to come fast, for sure.