Express (NYSE: EXPR) will close approximately 50 stores during the next 36 months after a challenging quarter that saw the apparel chain lose customers and miss sales.
The 50 store closures are expected to result in profit improvement of $5 to $8 million once all locations are closed. The closings are expected to start at the end of the current fiscal year or the beginning of the next fiscal year.
"We had anticipated a very challenging first quarter, but our actual results were weaker than planned," said Michael Weiss, chairman and CEO. "While external challenges contributed to the decline in our first quarter performance, we also did not execute as well as we could have."
Express cited excess inventory of slow-moving spring apparel and relying on factory stores and new product offerings to boost sales as pain points during the quarter. The company also said a Memorial Day event that did not drive traffic as successfully as last year and deep discounts affected quarterly sales performance.
While the company plans to shutter some mall-based Express units, it will continue to expand its new outlet-store concept. Express debuted the outlet format in April and noted the stores are exceeding sales plans. The company will accelerate future outlet store openings, but did not give specifics on plans for additional locations.
Express on Thursday reported sales of $460.7 million, down 10 percent from $509.4 million a year ago. First-quarter profit fell to $5.08 million, down 84 percent from $32.4 million a year earlier. Same-store sales plunged 11 percent.
-See this Express earnings call transcript
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