Net sales of US fashion retailer Express at $383.3 mn in Q1 FY23

In Q1 FY23 Comparable retail sales, which includes both Express stores and e-commerce, declined 13 per cent in comparison to Q1 FY22. This decline was led by an 18 per cent drop in retail stores comparable sales, and a 7 per cent decline in e-commerce comparable sales. Additionally, comparable outlet sales also saw a decrease of 17 per cent in comparison to Q1 FY22, the company said in a media release.

Gross margin for Q1 FY23 stood at 16.6 per cent of net sales, a significant decrease of approximately 1,260 basis points from 29.2 per cent in Q1 of the previous year. This contraction in merchandise margin by 900 basis points was primarily due to a challenging macroeconomic and highly promotional retail environment, and an additional 320 basis points of royalty expense related to the joint venture with WHP.

Selling, general, and administrative expenses in Q1 FY23 were reported at $139.3 million, 36.4 per cent of net sales, slightly down from $141.1 million, 31.3 per cent of net sales, in the same period last year.

"Our first quarter comparable sales were negative 14 per cent due to a combination of external factors and challenges in our product assortments. The reduced consumer spending, increased price sensitivity in discretionary categories and aggressive promotional activity across the industry that began in 2022 continued into the first quarter of this year and negatively impacted our performance. We continued to take corrective actions to address the imbalances in our women's assortment architecture and delivered sequential improvement in women’s sales as the quarter progressed. However, we experienced a deceleration in our men's and outlet stores businesses due to softness in traffic and against the backdrop of record volume in the first quarter of 2022," said Tim Baxter, chief executive officer.

Express reported an operating loss of $70.1 million in Q1 FY23, compared to a much smaller operating loss of $9.1 million in Q1 FY22. The company also reported a net loss of $73.4 million, or $0.99 per diluted share, a substantial increase from a net loss of $11.9 million, or $0.18 per diluted share, in the first quarter of the previous year.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for Q1 FY23 were negative $55.9 million, a significant downturn from $5.8 million in Q1 FY22.

Fibre2Fashion News Desk (DP)