EXPR Stock Overview
Express, Inc. provides apparel and accessories for women and men for various occasions under the Express brand.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$1.19|
|52 Week High||US$4.94|
|52 Week Low||US$1.07|
|1 Month Change||-13.14%|
|3 Month Change||-36.70%|
|1 Year Change||-73.90%|
|3 Year Change||-58.82%|
|5 Year Change||-79.76%|
|Change since IPO||-92.90%|
Recent News & Updates
Express Is Suffering But May Recover
Summary EXPR is an American retailer with approximately 560 stores in the country. The company has an enormous operational leverage, and minimal variations in revenue make enormous difference in the bottom line. If the company’s revenues fall 6% below guidance in FY22, EXPR will likely have trouble paying for fixed expenses. Conversely, if the company’s revenues are 2% above guidance, EXPR could generate $10 million in FCF. The situation can be interesting for the speculator but not for the long-term investor. Express (EXPR) is an American apparel retailer with approximately 560 stores in the country. The company became a meme stock in 2021 and has fallen 85% from its June 2021 high. EXPR has been posting accounting losses but is now at revenue levels similar to those generated in 2019. Additionally, EXPR is generating more cash than its accounting losses suggest, because of higher depreciation than capital expenditures. EXPR is heavily leveraged, with a term loan and a credit facility for a total of $200 million maturing in May 2024. The company also has operational leverage, generated by its mandatory lease and payroll payments. In my opinion, EXPR could also improve its SG&A expenses, which seem too high. Coupled with a cyclical industry like apparel retailing, EXPR seems a risky proposition for an uncertain economic context. I show with a financial model that the difference between EXPR failing to pay its fixed charges or generating a $10m free cash flow is as little as 10% revenue. However, in a more positive economic context, EXPR can become an interesting company to own for the long term if its stock's price remains depressed. Note: Unless otherwise stated, all information has been obtained from EXPR's filings with the SEC. Industry characteristics In terms of customers, apparel retailing is an industry where some companies can build a moat while others have to compete on a more commoditized basis. Depending on how much the company builds a brand, its products will seem either special or common to customers. In my opinion, EXPR seems to position itself closer to the commoditized spectrum. There are several data pieces pointing in that direction. First, the company mentions on its 10-K report that it offers a value proposition to customers. It also mentions that it follows trends rather than creating them and that it uses the services of purchase agents instead of designing its product in-house. Second, its advertising expenditures are low compared to revenue, representing approximately 5% of sales. Third, 200 out of 560 stores are outlet stores. Finally, a quick google search for 'Is Express clothing expensive' shows that most forum participants find it either cheap or value priced and that the company is constantly offering discounts on its products. On the supply side, EXPR is a price taker. The company has no manufacturing facilities. Rather, the company purchases products from 70 vendors, mostly in Asia and Latin America, and outsources its logistics to third parties. In this respect, EXPR may have some bargaining power, but not too much. It may be able to obtain better pricing on volume but nothing that deviates from what the same vendors can obtain from other customers. In terms of its sales structure, EXPR faces competitive and commoditized markets, also being a price taker. For its stores, all of which are leased, the company has to pay a price that is determined by supply and demand in each particular location. The company's employees are not particularly qualified, and their bargaining power will vary depending on how constrained labor supply is in general. This all signifies to me that EXPR will compete on the basis of cost and that a significant portion of costs will not be under its control but will rather be determined at the market level (merchandise, rents and wages). Finally, the apparel industry is cyclical. If disposable income falls, people will purchase less clothing. It is true however that apparel may be positively influenced by substitution forces as well. In plain terms, this means that when the customer's income falls, apparel consumption may fall less than other discretionary goods because apparel absorbs the income previously used in more expensive consumptions. As an example, if someone is marginally unable or unwilling to buy a new car or go on vacation this year, that person's disposable income for apparel actually increases. That consumer might even be more motivated than before to purchase apparel, or to go to restaurants (discretionary but less costly consumptions) in order to compensate for the foregone pleasures. Express' operations and cost structure Express participates in the relatively commoditized end of its industry, and most of its costs are not under its control. This means that in order to be profitable, the company has to squeeze pieces of margin from everywhere it can but particularly from costs under its control. I cannot say that I am happy with the results of analyzing EXPR's cost structure. At the merchandise level the company does relatively well, but at the SG&A level its expenses are high. EXPR has had an average gross profit margin of 30%. However, the company recognizes store lease costs on Cost of Goods Sold. I think this is incorrect, because these costs are related to sales and because they are fixed while CoGS should concentrate on the variable portion of costs. As the second chart below shows, a year of store rent payments (proxied through current capital lease obligations) has generally been around 15% of CoGS. This means that after removing lease costs, EXPR's gross profit margin is closer to 40%. Data by YCharts This margin is high, also taking into consideration that it includes all inbound and outbound logistic costs, deposit costs and all purchasing, designing and sourcing costs. EXPR's problem appears at the SG&A level. The company has averaged $550 million in SG&A expenses for the past 10 years, unable to generate more profits by reducing these expenses, not even in the face of the pandemic. SG&A expenses are composed mostly of corporate, store personnel payroll and advertising. The company spends about $130 million in advertising, leaving $420 million for payroll and corporate expenses. Considering the company has 3 thousand full-time workers and 7 thousand part-time workers, we arrive at an approximate average salary of $65 thousand a year ($420 million over 6.5 thousand full-time equivalent workers). That comes to an average of $30 an hour. You can do your own numbers with this calculator. I do not think that EXPR is paying so much to its workers. In fact, a quick search in Indeed shows that the company pays between $8 and $15 an hour to its salespeople. The calculation above had the intention to show that EXPR's SG&A expenses could improve a lot. The company is probably spending too much at the corporate level. However, even although EXPR could improve at the SG&A level, it has still sustained positive operating income for most of its operating history. This can be seen in the first chart below. The company did post losses in 2019, 2020 and 2021. However, in 2020 and 2021 it was under the effect of the pandemic. This can be considered a one-time in a century. In 2019, EXPR recognized $197 million in trademark impairments. This impairment was triggered by the fall of its stock's price according to the company's 10-K for FY19, but I also believe it is related to the incorporation of a new CEO in 2019, that could then start with a clean sheet. Data by YCharts Regarding cash flows, the company has also been positive for the most part. As the second chart above shows, before changes in working capital, the company has been able to post CFO higher than its operating income. This means the company is able to convert operating profits into cash. CFO before working capital is higher than operating profits because the company depreciates PP&E at a rate of around $70 million but has consistently invested less than that. This can be seen in the chart below. Data by YCharts Finally, and before moving to the financing portion, we can comment on EXPR's seasonality. The company usually has higher operating income in the second half compared to the first half of the year, because of the holiday season. This is also seen at the working capital level below. The company increases working capital (negative below) in Q1 and Q2, and recovers most of that investment in Q4. Data by YCharts Express' finances Like most retailers, EXPR got hit hard during the pandemic. The company posted $450 million in operating losses in FY20. These losses ate most of EXPR's cash reserves and pushed the company into debt. Before the pandemic, in FY19, the company had $200 million in cash reserves and no debt. After the pandemic, in FY20, the company had $50 million in cash and $200 million in financial debts. Again, this is understandable, given that the pandemic was a one-time event that no one could forecast. The company had built a cash reserve before the pandemic, but it proved insufficient. EXPR used two sources of debt. First, a currently open credit facility for $250 million that pays 2% + LIBOR. Second, two-term loans, for $90 and $50 million respectively, paying much higher interest rates, 7% + LIBOR. The credit facility has to be repaid first and can be drawn again, while the term loans have to be paid after the credit facility and cannot be redrawn. This is inconvenient because both term loans pay a much higher interest rate. Both the credit facility and the term loans mature in May 2024. In my opinion, after the pandemic, EXPR is in a tight situation. The company has to finance its working capital requirements during the first half of the year. This is aggravated by supply chain bottlenecks that push companies into bullwhip mode, ordering more in advance to stock and hold. The company cannot issue shares without diluting current shareholders because the share price is too low. To give an example, if EXPR had financed its 1H22 working capital requirements ($70 million) by issuing shares, it would have doubled its share count. Therefore the company is pushed into drawing from the credit facility in the first half of the year, and to repay in the second half. The term loans' covenants require the company to repay the credit facility first and only then pay the term loans that yield higher interest. As of 2Q22, EXPR has $100 million drawn from the term loans and $100 million drawn from the credit facility. With LIBOR at 3%, these debts generate yearly interests of $10 million and $5 million, respectively. The bearish thesis Adding EXPR's delicate financial situation, it needs to borrow for working capital months before it can sell the finished products. With the fears of an imminent recession and the apparel industry's characteristic cyclicality, it is easy to understand the bearish viewpoint. If EXPR cannot sell its inventory during this fall season, then it may not be able to pay interest due, and it will not be able to borrow for the next season. Therefore, I think the best is to model EXPR's cost structure and find out what would be needed for the company to fail on its obligations. First we start with the assumptions. As mentioned, if we subtract $200 million of yearly lease payments from CoGS, we find that EXPR's historic gross margins are close to 40%. On the expense side, we start with $200 million in lease payments. On top of that, we add $585 million in SG&A expenses (this figure is higher than the historical $550 million average but it was the guidance provided by EXPR's management on 2Q22). From the financing side, EXPR has to pay $15 million in interest charges. Finally, on a cash basis, we need to subtract $60 million from depreciation. Those fixed charges add to $740 million. Considering a 40% gross profit margin, EXPR has to generate revenues of $1.85 billion in FY22 to break even (on a cash basis, generating an accounting loss of $60 million).
Express' (NYSE:EXPR) Earnings Are Of Questionable Quality
Express, Inc. ( NYSE:EXPR ) announced strong profits, but the stock was stagnant. Our analysis suggests that...
Express Q2 2023 Earnings Preview
Express (NYSE:EXPR) is scheduled to announce Q2 earnings results on Wednesday, August 31st, before market open. The consensus EPS Estimate is $0.09 (+350.0% Y/Y) and the consensus Revenue Estimate is $479.62M (+4.8% Y/Y). Over the last 2 years, EXPR has beaten EPS estimates 50% of the time and has beaten revenue estimates 63% of the time.
|EXPR||US Specialty Retail||US Market|
Return vs Industry: EXPR underperformed the US Specialty Retail industry which returned -31.3% over the past year.
Return vs Market: EXPR underperformed the US Market which returned -18.8% over the past year.
|EXPR Average Weekly Movement||13.0%|
|Specialty Retail Industry Average Movement||8.0%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.6%|
|10% least volatile stocks in US Market||2.9%|
Stable Share Price: EXPR is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 13% a week.
Volatility Over Time: EXPR's weekly volatility (13%) has been stable over the past year, but is still higher than 75% of US stocks.
About the Company
Express, Inc. provides apparel and accessories for women and men for various occasions under the Express brand. The company sells its products through its e-commerce website, express.com; and mobile app, as well as franchisees Express locations in Latin America. As of January 29, 2022, it operated 561 stores in 46 states across the United States, as well as in Puerto Rico.
Express Fundamentals Summary
|EXPR fundamental statistics|
Is EXPR overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|EXPR income statement (TTM)|
|Cost of Revenue||US$1.09b|
Last Reported Earnings
Jul 30, 2022
Next Earnings Date
|Earnings per share (EPS)||0.23|
|Net Profit Margin||0.80%|
How did EXPR perform over the long term?See historical performance and comparison
Is EXPR undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 2/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for EXPR?
Other financial metrics that can be useful for relative valuation.
|What is EXPR's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does EXPR's PE Ratio compare to its peers?
|EXPR PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
RTMA.F Reitmans (Canada)
BGI Birks Group
CTRN Citi Trends
Price-To-Earnings vs Peers: EXPR is good value based on its Price-To-Earnings Ratio (5.1x) compared to the peer average (27.6x).
Price to Earnings Ratio vs Industry
How does EXPR's PE Ratio compare vs other companies in the US Specialty Retail Industry?
Price-To-Earnings vs Industry: EXPR is good value based on its Price-To-Earnings Ratio (5.1x) compared to the US Specialty Retail industry average (6.3x)
Price to Earnings Ratio vs Fair Ratio
What is EXPR's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||5.1x|
|Fair PE Ratio||n/a|
Price-To-Earnings vs Fair Ratio: Insufficient data to calculate EXPR's Price-To-Earnings Fair Ratio for valuation analysis.
Share Price vs Fair Value
What is the Fair Price of EXPR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: Insufficient data to calculate EXPR's fair value for valuation analysis.
Significantly Below Fair Value: Insufficient data to calculate EXPR's fair value for valuation analysis.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Insufficient data to show price forecast.
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How is Express forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?
Future Growth Score0/6
Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual revenue growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: Insufficient data to determine if EXPR's forecast earnings growth is above the savings rate (1.9%).
Earnings vs Market: Insufficient data to determine if EXPR's earnings are forecast to grow faster than the US market
High Growth Earnings: Insufficient data to determine if EXPR's earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: EXPR's revenue (0.9% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: EXPR's revenue (0.9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if EXPR's Return on Equity is forecast to be high in 3 years time
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How has Express performed over the past 5 years?
Past Performance Score2/6
Past Performance Score 2/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: EXPR has a high level of non-cash earnings.
Growing Profit Margin: EXPR became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: EXPR has become profitable over the past 5 years, growing earnings by -34.5% per year.
Accelerating Growth: EXPR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: EXPR has become profitable in the last year, making it difficult to compare its past year earnings growth to the Specialty Retail industry (0.1%).
Return on Equity
High ROE: EXPR's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.
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How is Express's financial position?
Financial Health Score0/6
Financial Health Score 0/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: EXPR has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.
Long Term Liabilities: EXPR has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.
Debt to Equity History and Analysis
Debt Level: EXPR has negative shareholder equity, which is a more serious situation than a high debt level.
Reducing Debt: EXPR's has negative shareholder equity, so we do not need to check if its debt has reduced over time.
Debt Coverage: EXPR's operating cash flow is negative, therefore debt is not well covered.
Interest Coverage: EXPR's interest payments on its debt are not well covered by EBIT (2.3x coverage).
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What is Express's current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Dividend Yield vs Market
|Express Dividend Yield vs Market|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Specialty Retail)||2.5%|
|Analyst forecast in 3 Years (Express)||n/a|
Notable Dividend: Unable to evaluate EXPR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate EXPR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if EXPR's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if EXPR's dividend payments have been increasing.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as EXPR has not reported any payouts.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Tim Baxter (53 yo)
Mr. Timothy G. Baxter, also known as Tim, has been Chief Executive Officer and Director at Express, Inc. since June 17, 2019. He had been the Chief Executive Officer of Delta Galil Premium Brands at Delta...
CEO Compensation Analysis
|Tim Baxter's Compensation vs Express Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jul 30 2022||n/a||n/a|
|Apr 30 2022||n/a||n/a|
|Jan 29 2022||US$7m||US$1m|
|Oct 30 2021||n/a||n/a|
|Jul 31 2021||n/a||n/a|
|May 01 2021||n/a||n/a|
|Jan 30 2021||US$2m||US$1m|
|Oct 31 2020||n/a||n/a|
|Aug 01 2020||n/a||n/a|
|May 02 2020||n/a||n/a|
|Feb 01 2020||US$7m||US$635k|
Compensation vs Market: Tim's total compensation ($USD6.64M) is above average for companies of similar size in the US market ($USD772.75K).
Compensation vs Earnings: Tim's compensation has been consistent with company performance over the past year.
Experienced Management: EXPR's management team is considered experienced (3.1 years average tenure).
Experienced Board: EXPR's board of directors are considered experienced (6.3 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Express, Inc.'s employee growth, exchange listings and data sources
- Name: Express, Inc.
- Ticker: EXPR
- Exchange: NYSE
- Founded: 1980
- Industry: Apparel Retail
- Sector: Retail
- Implied Market Cap: US$81.214m
- Shares outstanding: 68.25m
- Website: https://www.express.com
Number of Employees
- Express, Inc.
- 1 Express Drive
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|EXPR||NYSE (New York Stock Exchange)||Yes||Common Shares||US||USD||May 2010|
|02Z||DB (Deutsche Boerse AG)||Yes||Common Shares||DE||EUR||May 2010|
|0IJU||LSE (London Stock Exchange)||Yes||Common Shares||GB||USD||May 2010|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/06 00:00|
|End of Day Share Price||2022/10/06 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.