Express Inc. (NYSE:EXPR) Q3 2018 Earnings Conference Call Transcript
Nov 29, 2018 • 09:00 am ET
Good morning. My name is Emily, and I will be your conference operator today. At this time, I would like to welcome everyone to the Express Inc. Third Quarter 2018 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. Mark Rupe, VP, IR, you may begin your conference.
Thank you, Emily. Good morning, and welcome to our call. I would like to open by reminding you of the company's Safe Harbor provisions.
(Forward-Looking Cautionary Statements)
In addition, during this call we will make reference to adjusted net income and adjusted diluted earnings per share which are non-GAAP measures. Information necessary to reconcile these non-GAAP measures can be found in our press release, which has been filed as an exhibit to our Form 8-K with the SEC and is available on the company's IR website. Our comments today will supplement the detailed information provided in both the press release and the investor presentation.
With me today are David Kornberg, President and CEO; Matt Moellering, EVP and COO; and Perry Pericleous, SVP and CFO. I will now turn the call over to David.
Thank you, Mark. Good morning and thank you for joining us. Our third quarter performance was in line with our guidance. Third quarter net sales increased 2% with flat comparable sales, and earnings increased relative to the prior year with EPS of $0.11 versus $0.08 last year. Some of the key highlights in the quarter included on the women's side, we drove solid results in our wear to work and going-out assortments with above average comp performance in dressy woven tops, dressy pants, dresses, skirts, jackets, outerwear and accessories.
Another good performance in our men's business with strength in suits, casual pants, denim, knit tops, and outerwear, and shirts improved during the quarter. We had strong performance in e-commerce with comparable sales increasing 23% on top of 23% growth in the same period a year ago. We saw increased benefits from our omni-channel capabilities with ship from store driving improved markdown optimization. We achieved gross margin expansion of 70 basis points. And lastly, our balance sheet remains sound, which allowed us to further our efforts in enhancing shareholder value through share repurchases during the period. So overall, our third quarter performance was in line with our guidance.
Now turning to the fourth quarter. We entered the holiday season positioned to succeed with increased newness as compared to last year. However, sales to date in November, including the recently completed Black Friday week have been below our expectations. The apparel specialty retail environment continues to be highly promotional and our traffic has been challenging. As a result, we are revising our guidance to reflect a more cautious stance given recent unexpected sales trends. That said, a majority of the quarter is still in front of us, and we are focused on improving the business trend and optimizing the results.