Express, Inc. (EXPR) Reports Second Quarter 2023 Results; Reaffirms Full Year 2023 Outlook
- Net sales for Q2 2023 were within outlook range
- Implemented $80 million in savings for 2023 and plans to realize $120 million in savings in 2024
- Secured a $65 million term loan to bolster liquidity
- Consolidated net sales decreased 6% compared to Q2 2022
- Operating loss of $39.6 million in Q2 2023
- Net loss of $44.1 million in Q2 2023
Second quarter 2023 net sales and diluted loss per share in the range of previously announced outlook
Reiterates plans to realize
Bolsters liquidity with new
On August 30, 2023, the Company implemented a 1-for-20 reverse stock split. All shares of the Company’s common stock contained in its consolidated financial statements have been retroactively adjusted to reflect the reverse stock split, which decreased shares outstanding from 74.9 million to 3.7 million. As a result of the reduction in weighted average shares outstanding, the Company's previously announced second quarter 2023 diluted loss per share outlook of
"Second quarter net sales and diluted loss per share were within the ranges of our outlook and we are gaining momentum. In the Express brand, we drove significant, sequential improvement each month driven by a powerful trend change in our women’s and eCommerce businesses. This momentum continued through Labor Day," said Tim Baxter, Chief Executive Officer. "Bonobos sales also exceeded our expectations, delivered operating income accretive to our total and is positioned to be a growth engine for EXPR."
"We’ve also taken aggressive action to improve the bottom line. As a result of the ongoing comprehensive review of our entire expense structure, we have identified and implemented
"We are transforming EXPR to create shareholder value and are focused on driving long term profitable growth and delivering positive free cash flow in our core Express business, leveraging our omnichannel platform to reduce costs, and accelerating our growth and profitability through our strategic partnership with WHP Global," concluded Baxter.
Second Quarter 2023 Operating Results |
-
Consolidated net sales decreased
6% to from$435.3 million in the second quarter of 2022,$464.9 million -
Express and UpWest Brands
-
Net sales decreased
15% to from$394.4 million in the second quarter of 2022, with comparable sales down$464.9 million 14% with significant sequential improvement each month of the quarter -
Comparable retail sales, which includes both Express stores and eCommerce, were down
13% compared to the second quarter of 2022. Retail stores comparable sales decreased21% while eCommerce comparable sales declined1% -
Comparable outlet sales decreased
17% compared to the second quarter of 2022
-
Net sales decreased
-
Bonobos Brand
-
Net sales were
and exceeded our expectations$40.9 million
-
Net sales were
-
Express and UpWest Brands
-
Gross margin was
23.1% of net sales compared to33.1% of net sales in last year's second quarter, a decrease of approximately 1,000 basis points- Merchandise margin contracted by 680 basis points primarily driven by increased promotional activity and 310 basis points of royalty expense related to the joint venture with WHP
- Buying and occupancy expenses as a percent of net sales deleveraged approximately 320 basis points due to the decline in comparable sales
-
Selling, general, and administrative (SG&A) expenses were
,$146.1 million 33.6% of net sales, versus ,$143.3 million 30.8% of net sales, in last year's second quarter. The deleverage in the SG&A expense rate was driven by the decline in comparable sales -
Operating loss was
and includes the impact of$39.6 million in pre-tax restructuring charges,$4.7 million of acquisition-related and integration costs in connection with the acquisition of Bonobos and a$4.6 million non-cash impairment charge. This compares to operating income of$1.0 million in the second quarter of 2022$10.4 million -
On an adjusted basis, excluding certain restructuring charges, acquisition-related and integration costs and an impairment charge, operating loss1 was
for the second quarter of 2023$29.3 million
-
On an adjusted basis, excluding certain restructuring charges, acquisition-related and integration costs and an impairment charge, operating loss1 was
-
Income tax expense was
at an effective tax rate of (1.4)%, versus$0.6 million at an effective tax rate of$0.3 million 3.5% during the second quarter of 2022. The Company's effective tax rate for the second quarter of 2023 was impacted primarily by the recording of an additional valuation allowance against the Company's deferred tax assets -
Net loss was
, or$44.1 million per diluted share, compared to net income of$11.79 , or$7.0 million per diluted share, in the second quarter of 2022.$2.05 -
On an adjusted basis, excluding certain restructuring charges, acquisition-related and integration costs and an impairment charge, net loss1 was
, or$33.8 million per diluted share, for the second quarter of 2023$9.05
-
On an adjusted basis, excluding certain restructuring charges, acquisition-related and integration costs and an impairment charge, net loss1 was
-
Earnings before interest, taxes, depreciation, and amortization (EBITDA)1 was negative
, compared to$24.7 million in the second quarter of 2022.$25.6 million
1 Adjusted operating income (loss), adjusted net income (loss), adjusted diluted earnings per share and EBITDA are non-GAAP financial measures. Please see Schedule 4 – Supplemental Information and the reconciliation contained therein for additional information concerning these non-GAAP financial measures.
Balance Sheet and Cash Flow Highlights |
-
Cash and cash equivalents totaled
at the end of the second quarter of 2023 versus$58.6 million at the end of the second quarter of 2022 and$37.7 million at the end of the fourth quarter of 2022$65.6 million -
Inventory was
, including$415.8 million of Bonobos inventory, at the end of the second quarter of 2023, up$55.7 million 20% compared to at the end of the second quarter of 2022 and up$346.2 million 14% compared to the end of the fourth quarter of 2022 -
Total debt was
at the end of the second quarter of 2023 compared to$220.8 million at the end of the second quarter of 2022 and$202.2 million at the end of the fourth quarter of 2022$122.0 million -
At the end of the second quarter of 2023,
remained available for borrowing under the revolving credit facility provided by the Company's asset-based loan credit agreement (the "ABL Credit Agreement")$47.5 million -
Net cash used in operations was
for the twenty-six weeks ended July 29, 2023, compared to net cash used in operations of$60.8 million for the twenty-six weeks ended July 30, 2022$60.8 million -
Capital expenditures totaled
for the twenty-six weeks ended July 29, 2023, compared to$16.2 million for the twenty-six weeks ended July 30, 2022$13.5 million
Expense Reduction Initiatives |
The Company is continuing to conduct a comprehensive review of its business model to identify actions that are expected to meaningfully reduce pre-tax costs and enable a more efficient and effective organization and has engaged external advisors to assist in this effort. The Company has a stated goal to deliver over
In May 2023, the Company announced it had identified and implemented
In August 2023, the Company announced an additional
In addition, the Company announced that
For additional background on the Company's expense reduction initiatives, please read the announcement press release here.
New Term Loan |
On September 5, 2023, the Company entered into a definitive loan agreement with ReStore Capital for a
Kirkland & Ellis LLP served as legal advisor to the Company in connection with the loan transaction.
2023 Outlook |
The Company’s full year outlook remains unchanged and takes into consideration the persistently challenging macroeconomic and retail apparel environments, including reduced consumer spending and increased price sensitivity in discretionary categories.
Third Quarter 2023
The Company expects the following for the third quarter of 2023 compared to the third quarter of 2022:
-
Net sales of approximately
to$460 million , including approximately$490 million in Bonobos net sales$50 million - Gross margin rate to decrease approximately 200 basis points, including approximately 300 basis points of royalty expense related to the license agreement with WHP Global, and a positive approximately 300 basis point benefit from Bonobos
- SG&A expenses as a percent of net sales to leverage approximately 275 basis points, including approximately 150 basis point deleverage from Bonobos
-
Net interest expense of
$6 million - Effective tax rate of essentially zero percent
-
Diluted loss per share of
to$5.50 $7.50 - Consolidated inventory to increase by low-double digits with the addition of Bonobos
Full Year 2023
The Company's full year outlook remains unchanged and it expects the following for the full year of 2023 compared to the full year of 2022:
-
Net sales of approximately
to$1.9 billion , including approximately$2.0 billion in Bonobos net sales$150 million -
Net interest expense of
$20 million - Effective tax rate of essentially zero percent
-
Diluted loss per share of
to$30.00 $34.00 -
Capital expenditures of approximately
$25 million
See Schedule 5 for a discussion of projected real estate activity.
Conference Call Information |
A conference call to discuss second quarter 2023 results is scheduled for September 6, 2023 at 8:30 a.m. Eastern Time (ET). Investors and analysts interested in participating in the earnings call are invited to dial (888) 550-5723 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.express.com/investor. A telephone replay of this call will be available beginning at 12:00 p.m. ET on September 6, 2023 until 11:59 p.m. ET on September 13, 2023, and can be accessed by dialing (800) 770-2030 and entering the replay pin number 1790468. In addition, an investor presentation of second quarter 2023 results will be available at www.express.com/investor at approximately 7:00 a.m. ET on September 6, 2023.
About EXPR |
EXPR is a multi-brand fashion retailer whose portfolio includes Express, Bonobos and UpWest. The Company operates an omnichannel platform as well as physical and online stores. Grounded in a belief that style, quality and value should all be found in one place, Express is a brand with a purpose - We Create Confidence. We Inspire Self-Expression. - powered by a styling community. Bonobos is a menswear brand known for exceptional fit and an innovative retail model. UpWest is an apparel, accessories and home goods brand with a purpose to Provide Comfort for People & Planet.
The Company has 530 Express retail and Express factory outlet stores in
Forward-Looking Statements |
Certain statements are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to any historical or current fact and include, but are not limited to (1) guidance and expectations, including statements regarding expected operating margins, comparable sales, effective tax rates, interest income, net income, diluted earnings per share, cash tax refunds, liquidity, EBITDA, free cash flow, eCommerce demand, and capital expenditures, (2) statements regarding expected store openings, store closures, store conversions, and gross square footage, (3) statements regarding the Company's strategy, plans, and initiatives, including, but not limited to, results expected from such strategy, plans, and initiatives, (4) statements regarding the Company’s workforce reduction and other cost reduction actions, including, but not limited to, charges associated with the workforce reduction and the financial benefits (and the timing of the realization of such benefits) expected from such actions, and (5) the anticipated benefits or effects of the Bonobos acquisition, including statements regarding operating results, financial efficiencies, operational synergies, and our plans, objectives, expectations and intentions related to the acquired assets. You can identify these forward-looking statements by the use of words in the future tense and statements accompanied by words such as “outlook,” “indicator,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “scheduled,” “estimates,” “anticipates,” “opportunity,” “leads” or the negative version of these words or other comparable words. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict, and significant contingencies, many of which are beyond the Company's control. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) the duration and severity of ongoing negative macroeconomic conditions caused by the COVID-19 pandemic and their future impact on our business operations, financial condition, liquidity and cash flow; (3) geopolitical risks, including impacts from the ongoing conflict between
Schedule 1 |
|||||||||||
|
|
|
|
|
|
||||||
Express, Inc. Consolidated Balance Sheets (In thousands) (Unaudited) |
|||||||||||
|
July 29, 2023 |
|
January 28, 2023 |
|
July 30, 2022 |
||||||
ASSETS |
|
|
|
|
|
||||||
Current Assets: |
|
|
|
|
|
||||||
Cash and cash equivalents |
$ |
58,581 |
|
|
$ |
65,612 |
|
|
$ |
37,667 |
|
Receivables, net |
|
18,222 |
|
|
|
12,374 |
|
|
|
11,924 |
|
Income tax receivable |
|
2,350 |
|
|
|
1,462 |
|
|
|
2,229 |
|
Inventories |
|
415,810 |
|
|
|
365,649 |
|
|
|
346,229 |
|
Prepaid royalty |
|
33,581 |
|
|
|
59,565 |
|
|
|
— |
|
Prepaid rent |
|
3,755 |
|
|
|
7,744 |
|
|
|
6,321 |
|
Other |
|
24,554 |
|
|
|
21,998 |
|
|
|
22,628 |
|
Total current assets |
|
556,853 |
|
|
|
534,404 |
|
|
|
426,998 |
|
|
|
|
|
|
|
||||||
Right of Use Asset, Net |
|
544,873 |
|
|
|
505,350 |
|
|
|
546,259 |
|
|
|
|
|
|
|
||||||
Property and Equipment |
|
1,013,097 |
|
|
|
1,019,577 |
|
|
|
989,088 |
|
Less: accumulated depreciation |
|
(888,133 |
) |
|
|
(886,193 |
) |
|
|
(856,324 |
) |
Property and equipment, net |
|
124,964 |
|
|
|
133,384 |
|
|
|
132,764 |
|
|
|
|
|
|
|
||||||
Non-Current Income Tax Receivable |
|
52,278 |
|
|
|
52,278 |
|
|
|
52,278 |
|
Equity Method Investment |
|
166,210 |
|
|
|
166,106 |
|
|
|
— |
|
Other Assets |
|
6,855 |
|
|
|
6,803 |
|
|
|
4,656 |
|
TOTAL ASSETS |
$ |
1,452,033 |
|
|
$ |
1,398,325 |
|
|
$ |
1,162,955 |
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
||||||
Current Liabilities: |
|
|
|
|
|
||||||
Short-term lease liability |
$ |
191,554 |
|
|
$ |
189,006 |
|
|
$ |
190,324 |
|
Accounts payable |
|
232,353 |
|
|
|
191,386 |
|
|
|
166,378 |
|
Deferred royalty income |
|
9,219 |
|
|
|
19,852 |
|
|
|
— |
|
Deferred revenue |
|
39,505 |
|
|
|
35,543 |
|
|
|
31,632 |
|
Short-term debt |
|
— |
|
|
|
— |
|
|
|
4,500 |
|
Accrued expenses |
|
123,687 |
|
|
|
105,803 |
|
|
|
106,087 |
|
Total current liabilities |
|
596,318 |
|
|
|
541,590 |
|
|
|
498,921 |
|
|
|
|
|
|
|
||||||
Long-Term Lease Liability |
|
429,557 |
|
|
|
406,448 |
|
|
|
456,661 |
|
Long-Term Debt |
|
220,750 |
|
|
|
122,000 |
|
|
|
197,673 |
|
Other Long-Term Liabilities |
|
19,492 |
|
|
|
20,718 |
|
|
|
10,213 |
|
Total Liabilities |
|
1,266,117 |
|
|
|
1,090,756 |
|
|
|
1,163,468 |
|
|
|
|
|
|
|
||||||
Commitments and Contingencies |
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
Total Stockholders’ Equity (Deficit) |
|
185,916 |
|
|
|
307,569 |
|
|
|
(513 |
) |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
1,452,033 |
|
|
$ |
1,398,325 |
|
|
$ |
1,162,955 |
|
Schedule 2 |
|||||||||||||||
|
|
|
|
||||||||||||
Express, Inc. Consolidated Statements of Income (In thousands, except per share amounts) (Unaudited) |
|||||||||||||||
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
||||||||||||
|
July 29, 2023 |
|
July 30, 2022 |
|
July 29, 2023 |
|
July 30, 2022 |
||||||||
Net Sales |
$ |
435,344 |
|
|
$ |
464,919 |
|
|
$ |
818,601 |
|
|
$ |
915,704 |
|
Cost of Goods Sold, Buying and Occupancy Costs |
|
334,975 |
|
|
|
311,218 |
|
|
|
654,439 |
|
|
|
630,503 |
|
GROSS PROFIT |
|
100,369 |
|
|
|
153,701 |
|
|
|
164,162 |
|
|
|
285,201 |
|
Operating Expenses (Income): |
|
|
|
|
|
|
|
||||||||
Selling, general, and administrative expenses |
|
146,091 |
|
|
|
143,278 |
|
|
|
285,439 |
|
|
|
284,371 |
|
Royalty income |
|
(6,193 |
) |
|
|
— |
|
|
|
(10,633 |
) |
|
|
— |
|
Other operating expense (income), net |
|
42 |
|
|
|
11 |
|
|
|
(958 |
) |
|
|
(479 |
) |
TOTAL OPERATING EXPENSES |
|
139,940 |
|
|
|
143,289 |
|
|
|
273,848 |
|
|
|
283,892 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING (LOSS) INCOME |
|
(39,571 |
) |
|
|
10,412 |
|
|
|
(109,686 |
) |
|
|
1,309 |
|
Interest Expense, Net |
|
3,874 |
|
|
|
3,800 |
|
|
|
6,817 |
|
|
|
7,294 |
|
Other Income, Net |
|
— |
|
|
|
(676 |
) |
|
|
— |
|
|
|
(876 |
) |
(LOSS) INCOME BEFORE INCOME TAXES |
|
(43,445 |
) |
|
|
7,288 |
|
|
|
(116,503 |
) |
|
|
(5,109 |
) |
Income Tax Expense (Benefit) |
|
611 |
|
|
|
252 |
|
|
|
980 |
|
|
|
(231 |
) |
NET (LOSS) INCOME |
$ |
(44,056 |
) |
|
$ |
7,036 |
|
|
$ |
(117,483 |
) |
|
$ |
(4,878 |
) |
|
|
|
|
|
|
|
|
||||||||
EARNINGS PER SHARE: |
|
|
|
|
|
|
|
||||||||
Basic(1) |
$ |
(11.79 |
) |
|
$ |
2.06 |
|
|
$ |
(31.62 |
) |
|
$ |
(1.44 |
) |
Diluted(1) |
$ |
(11.79 |
) |
|
$ |
2.05 |
|
|
$ |
(31.62 |
) |
|
$ |
(1.44 |
) |
|
|
|
|
|
|
|
|
||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING: |
|
|
|
|
|
|
|
||||||||
Basic(1) |
|
3,737 |
|
|
|
3,408 |
|
|
|
3,715 |
|
|
|
3,384 |
|
Diluted(1) |
|
3,737 |
|
|
|
3,437 |
|
|
|
3,715 |
|
|
|
3,384 |
|
1. |
All share and per share amounts have been retrospectively adjusted to reflect the Company’s 1-for-20 reverse stock split which was effected after the close of market on August 30, 2023. |
Schedule 3 |
|||||||
|
|
||||||
Express, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
|||||||
|
Twenty-Six Weeks Ended |
||||||
|
July 29, 2023 |
|
July 30, 2022 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net loss |
$ |
(117,483 |
) |
|
$ |
(4,878 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
28,851 |
|
|
|
30,088 |
|
Loss on disposal of property and equipment |
|
42 |
|
|
|
21 |
|
Impairment of property, equipment and lease assets |
|
996 |
|
|
|
— |
|
Share-based compensation |
|
(3,810 |
) |
|
|
5,013 |
|
Landlord allowance amortization |
|
(154 |
) |
|
|
(234 |
) |
Changes in operating assets and liabilities: |
|
|
|
||||
Receivables, net |
|
(3,777 |
) |
|
|
(180 |
) |
Income tax receivable |
|
(888 |
) |
|
|
(842 |
) |
Prepaid royalty |
|
25,984 |
|
|
|
— |
|
Inventories |
|
1,132 |
|
|
|
12,566 |
|
Deferred royalty income |
|
(10,633 |
) |
|
|
— |
|
Accounts payable, deferred revenue, and accrued expenses |
|
28,357 |
|
|
|
(76,673 |
) |
Other assets and liabilities |
|
(9,417 |
) |
|
|
(25,690 |
) |
NET CASH USED IN OPERATING ACTIVITIES |
|
(60,800 |
) |
|
|
(60,809 |
) |
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Capital expenditures |
|
(16,217 |
) |
|
|
(13,494 |
) |
Acquisition, net of cash acquired |
|
(28,300 |
) |
|
|
— |
|
Costs related to WHP transaction |
|
(104 |
) |
|
|
— |
|
NET CASH USED IN INVESTING ACTIVITIES |
|
(44,621 |
) |
|
|
(13,494 |
) |
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from borrowings under the revolving credit facility |
|
205,250 |
|
|
|
144,000 |
|
Repayment of borrowings under the revolving credit facility |
|
(106,500 |
) |
|
|
(69,000 |
) |
Repayment of borrowings under the term loan facility |
|
— |
|
|
|
(2,250 |
) |
Repurchase of common stock for tax withholding obligations |
|
(360 |
) |
|
|
(1,956 |
) |
NET CASH PROVIDED BY FINANCING ACTIVITIES |
|
98,390 |
|
|
|
70,794 |
|
|
|
|
|
||||
NET DECREASE IN CASH AND CASH EQUIVALENTS |
|
(7,031 |
) |
|
|
(3,509 |
) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD |
|
65,612 |
|
|
|
41,176 |
|
CASH AND CASH EQUIVALENTS, END OF PERIOD |
$ |
58,581 |
|
|
$ |
37,667 |
|
Schedule 4 |
|
Express, Inc. |
Supplemental Information - Consolidated Statements of Income |
Reconciliation of GAAP to Non-GAAP Financial Measures |
(Unaudited) |
The Company supplements the reporting of its financial information determined under
Adjusted Operating Income (Loss), Adjusted Net Income (Loss) and Adjusted Diluted Earnings Per Share |
Adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share exclude the impact of certain items that the Company does not believe are directly related to its underlying operations.
How These Measures Are Useful
The Company believes that these non-GAAP measures provide additional useful information to assist stockholders in understanding its financial results and assessing its prospects for future performance. Management believes adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share are important indicators of the Company's business performance because they exclude items that may not be indicative of, or are unrelated to, the Company's underlying operating results, and may provide a better baseline for analyzing trends in the business.
Limitations of the Usefulness of These Measures
Because non-GAAP financial measures are not standardized, adjusted operating income (loss), adjusted net income (loss), and adjusted diluted earnings per share may differ from similarly titled measures used by other companies due to different methods of calculation. These adjusted financial measures should not be considered in isolation or as a substitute for reported operating income (loss), net income (loss), or diluted earnings per share. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed together with the GAAP results, provide a more complete understanding of the Company's business. A reconciliation of adjusted operating income (loss), adjusted net income (loss) and adjusted diluted earnings per share to the most directly comparable GAAP measure is set forth below:
|
Thirteen Weeks Ended July 29, 2023 |
|
|||||||||||||
(in thousands, except per share amounts) |
Operating
|
|
Income Tax
|
|
Net Loss |
|
Diluted
|
Weighted
|
|
||||||
Reported GAAP Measure |
$ |
(39,571 |
) |
|
|
|
$ |
(44,056 |
) |
|
$ |
(11.79 |
) |
3,737 |
|
Impact of restructuring(b) |
|
4,658 |
|
|
— |
|
|
4,658 |
|
|
|
1.25 |
|
|
|
Acquisition-related and integration costs(c) |
|
4,595 |
|
|
— |
|
|
4,595 |
|
|
|
1.23 |
|
|
|
Impairment of property, equipment and lease assets(d) |
|
996 |
|
|
— |
|
|
996 |
|
|
|
0.27 |
|
|
|
Adjusted Non-GAAP Measure |
$ |
(29,322 |
) |
|
|
|
$ |
(33,807 |
) |
|
$ |
(9.05 |
) |
|
|
a. |
Items tax effected at the applicable deferred or statutory rate offset by the recording of a non-cash valuation allowance. |
b. |
Represents restructuring charges primarily related to employee severance and benefits of which |
c. |
Represents acquisition-related and integration costs incurred in connection with the acquisition of Bonobos, which were recorded in selling, general and administrative expenses in the unaudited Consolidated Statements of Income and Comprehensive Income. |
d. |
Represents a non-cash impairment charge taken against certain long-lived store related assets and right of use assets, which was recorded in cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income. |
e. |
Share amount has been retrospectively adjusted to reflect the Company’s 1-for-20 reverse stock split which was effected after the close of market on August 30, 2023. |
Twenty-Six Weeks Ended July 29, 2023 |
|
||||||||||||||
(in thousands, except per share amounts) |
Operating
|
|
Income Tax
|
|
Net Loss |
|
Diluted
|
Weighted
|
|
||||||
Reported GAAP Measure |
$ |
(109,686 |
) |
|
|
|
$ |
(117,483 |
) |
|
$ |
(31.62 |
) |
3,715 |
|
Impact of restructuring(b) |
|
4,658 |
|
|
— |
|
|
4,658 |
|
|
|
1.25 |
|
|
|
Acquisition-related and integration costs(c) |
|
4,595 |
|
|
— |
|
|
4,595 |
|
|
|
1.24 |
|
|
|
Impairment of property, equipment and lease assets(d) |
|
996 |
|
|
— |
|
|
996 |
|
|
|
0.27 |
|
|
|
Adjusted Non-GAAP Measure |
$ |
(99,437 |
) |
|
|
|
$ |
(107,234 |
) |
|
$ |
(28.87 |
) |
|
|
a. |
Items tax effected at the applicable deferred or statutory rate offset by the recording of a non-cash valuation allowance. |
b. |
Represents restructuring charges primarily related to employee severance and benefits of which |
c. |
Represents acquisition-related and integration costs incurred in connection with the acquisition of Bonobos, which were recorded in selling, general and administrative expenses in the unaudited Consolidated Statements of Income and Comprehensive Income. |
d. |
Represents a non-cash impairment charge taken against certain long-lived store related assets and right of use assets, which was recorded in cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income. |
e. |
Share amount has been retrospectively adjusted to reflect the Company’s 1-for-20 reverse stock split which was effected after the close of market on August 30, 2023. |
EBITDA |
EBITDA is defined as net income (loss) before interest expense (net of interest income), income tax expense and depreciation and amortization expense.
How This Measure Is Useful
When used in conjunction with GAAP financial measures, EBITDA is a supplemental measure of operating performance that the Company believes is a useful measure to facilitate comparisons to historical performance. EBITDA is used as a performance measure in the Company's long-term executive compensation program for purposes of determining the number of equity awards that are ultimately earned and is also a metric used in our short-term cash incentive compensation plan.
Limitations of the Usefulness of This Measure
Because non-GAAP financial measures are not standardized, EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of EBITDA is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Therefore, this measure may not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the GAAP financial measures. A reconciliation of EBITDA to the most directly comparable GAAP measures, is set forth below:
|
Thirteen Weeks Ended |
|
Twenty-Six Weeks Ended |
||||||||||||
(in thousands) |
July 29, 2023 |
July 30, 2022 |
|
July 29, 2023 |
|
July 30, 2022 |
|||||||||
Net (loss) income |
$ |
(44,056 |
) |
|
$ |
7,036 |
|
$ |
(117,483 |
) |
|
$ |
(4,878 |
) |
|
Interest expense, net |
|
3,874 |
|
|
|
3,800 |
|
|
6,817 |
|
|
|
7,294 |
|
|
Income tax expense (benefit) |
|
611 |
|
|
|
252 |
|
|
980 |
|
|
|
(231 |
) |
|
Depreciation and amortization |
|
14,875 |
|
|
|
14,477 |
|
|
29,121 |
|
|
|
29,213 |
|
|
EBITDA (Non-GAAP Measure) |
$ |
(24,696 |
) |
|
$ |
25,565 |
|
$ |
(80,565 |
) |
|
$ |
31,398 |
|
|
|
||||
Schedule 5 |
|||||
|
|
|
|
||
Express, Inc. Real Estate Activity (Unaudited) |
|||||
|
|
|
|
||
Second Quarter 2023 - Actual |
|
July 29, 2023 - Actual |
|||
Company-Operated Stores |
Opened |
Closed |
|
Store Count |
Gross Square Footage |
Retail Stores |
— |
(2) |
|
325 |
|
Outlet Stores |
— |
(1) |
|
194 |
|
Express Edit Stores |
1 |
— |
|
11 |
|
UpWest Stores |
1 |
(3) |
|
11 |
|
Bonobos Guideshops |
— |
— |
|
60 |
|
TOTAL |
2 |
(6) |
|
601 |
4.6 million |
|
|
|
|
|
|
Third Quarter 2023 - Projected |
|
October 28, 2023 - Projected |
|||
Company-Operated Stores |
Opened |
Closed |
|
Store Count |
Gross Square Footage |
Retail Stores |
— |
— |
|
325 |
|
Outlet Stores |
1 |
(1) |
|
194 |
|
Express Edit Stores |
— |
— |
|
11 |
|
UpWest Stores |
2 |
— |
|
13 |
|
Bonobos Guideshops |
— |
— |
|
60 |
|
TOTAL |
3 |
(1) |
|
603 |
4.6 million |
|
|
|
|
|
|
Full Year 2023 - Projected |
|
February 3, 2024 - Projected |
|||
Company-Operated Stores |
Opened |
Closed |
|
Store Count |
Gross Square Footage |
Retail Stores |
— |
(10) |
|
322 |
|
Outlet Stores |
1 |
(5) |
|
194 |
|
Express Edit Stores |
1 |
— |
|
11 |
|
UpWest Stores |
3 |
(4) |
|
12 |
|
Bonobos Guideshops |
— |
(2) |
|
60 |
|
TOTAL |
5 |
(21) |
|
599 |
4.5 million |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230905218567/en/
INVESTOR CONTACT
Greg Johnson
VP, Investor Relations
gjohnson@express.com
(614) 474-4890
Source: Express, Inc.