Express, Inc. (EXPR, Financial) recently held its Q2 2023 earnings conference call, discussing the company's financial performance and future outlook. The company's Q2 2023 earnings release and presentation can be found on their investor relations website. The call highlighted the company's commitment to creating shareholder value through driving profitable growth, reducing costs, and leveraging strategic partnerships. The company also discussed the impact of the recent 1-for-20 reverse stock split on its financial statements.
Financial Performance
Express, Inc. reported that its Q2 2023 net sales and diluted loss per share were within the ranges of their outlook. The adjusted diluted loss per share was favorable to the range, reflecting the aggressive actions the company has implemented to improve profitability. The company's second-quarter 2023 diluted loss per share of $11.79 was within the outlook range, while the adjusted diluted loss per share of $9.05 was favorable to this range.
Strategic Actions and Future Outlook
Express, Inc. is taking corrective actions to address significant challenges, including imbalances across the women's product assortment, challenging comps in men's and outlet, and the ongoing dynamic macroeconomic environment. The company is confident that these actions will deliver substantially improved sales performance in the second half of the year. The company is also committed to creating shareholder value by driving profitable growth and delivering positive free cash flow in its core Express branded business, leveraging its fully integrated omnichannel platform to reduce costs, and accelerating growth and profitability through its strategic partnership with WHP Global.
Partnership with WHP Global
Express, Inc. entered into a strategic partnership with WHP Global to acquire and operate a portfolio of omnichannel brands. The company believes this portfolio will create significant synergies now and in the future. The Express brand is positioned to generate positive free cash flow, which can be strategically reinvested in the existing business and future acquisitions. The company is also aggressively pursuing at least $50 million in gross margin expansion through efficiencies in sourcing, production, and the supply chain.
Financial Outlook
Express, Inc. expects net sales of approximately $460 million to $490 million for Q3 2023, including approximately $50 million in Bonobos sales. The company expects gross margin rate to decrease approximately 200 basis points in aggregate, and SG&A expenses as a percent of sales to leverage approximately 275 basis points. The company's outlook for the full year remains unchanged, with net sales of approximately $1.9 billion to $2 billion, including approximately $150 million in Bonobos sales, and diluted loss per share of $30 to $34.
In conclusion, Express, Inc. is at a turning point and is now confidently on the offensive. The company is committed to creating shareholder value by driving long-term profitable growth, reducing costs, and leveraging strategic partnerships.
