Express Inc. (NYSE:EXPR) Q1 2015 Earnings Conference Call - Final Transcript

May 28, 2015 • 09:00 am ET


Express Inc. (NYSE:EXPR) Q1 2015 Earnings Conference Call - Final Transcript


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Good morning, and welcome to the Express Inc. First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Marisa Jacobs, Vice President of Investor Relations for Express. Please go ahead.

Marisa Jacobs

Thank you. Good morning, and welcome to our call. I'd like to open by reminding you of the company's Safe Harbor provision. Any statements made during this conference call, except those containing historical facts may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in the forward-looking statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, including today's press release. Express assumes no obligation to update any forward-looking statements or information. In addition, during this call, we will make reference to adjusted net income and adjusted earnings per diluted share, which are not GAAP measures. Information necessary to reconcile these non-GAAP measures to reported net income and earnings per diluted share can be found in our press release.

With me today are David Kornberg, President and CEO; Matt Moellering, Executive Vice President and COO, and Paul Dascoli, Senior Vice President and CFO.

I'm now going to turn the call over to David, he will be followed by Paul, and then we'll turn to Q&A.

David Kornberg

Thank you, Marisa, good morning everyone, and thank you for joining us today. Fiscal 2015 got off to a strong start. We saw good product acceptance with momentum in our women's business. Our more restrained approach to promotion combined with greater inventory discipline enabled us to successfully reduce markdown activity, and we presented a clearer value proposition to our customer. In combination, this led to greatly improved results.

Positive comp sales exceeded the high-end our guidance, our merchandise margin was better than anticipated, and earnings per share significantly exceeded our expectations. I'm also encouraged by the fact that our overall results were not only better, the key drivers were more balanced than before, with a combination of top line growth, margin expansion, and expense leverage. This is critical to delivering the consistent and the sustainable results I touched on when we spoke in March.

I would like to start by providing a brief update on our growth pillars. After that, I'll address areas of progress relating to the 2015 key priorities outlined on our last earnings call. As a reminder, our growth pillars consist of: one, enhancing the productivity of our existing stores; two, optimizing and expanding our store base; three, continuing to grow our ecommerce platform; and four, international expansion.

Enhancing productivity of the existing fleet was a key theme for the quarter. As 2014 wound down, we managed inventories prudently, and protected our spring product by running fewer all-store percent off promotions once the holiday season wrapped up. This set