E-commerce makes up a larger share of Express’ Q3 sales than it did a year ago
December 1, 2016 10:52 AM
E-commerce made up a much larger share of Express Inc.’s sales than it did a year ago. Online sales accounted for 19% of the multichannel retailer’s sales in the third quarter, up from 15.3% a year earlier.
Thats providing a glimmer of good news for Express, No. 99 in the Internet Retailer 2016 Top 500 Guide. While Express’ overall sales fell 7.4% during the quarter, its online sales rose 14.9%. That’s a marked shift from the first half of the year when Express’ overall sales fell 2.9% which outperforming its e-commerce sales, which were down 3.6%.
"E-commerce was a bright spot in the quarter delivering 15% growth as we capitalized on the increasing preference of our customer demographic towards this channel with a strong and clear marketing and merchandizing message," said CEO David Kornberg on a conference call with analysts. "During the quarter, we launched several key initiatives including improved navigation, as well as continued optimization for our search and category changes."
It isn't surprising that Express is seeing strong gains online, he said, because its young adult target demographic spends a lot of time online. "The world is changing and the industry is changing in that way, and we have to be ahead of it," he said.
As part of those efforts, Express is investing in a number of information technology systems, including new order management, retail management and enterprise planning systems. "We have now modernized approximately 95% of our portfolio of systems as the past four years," he said. "With most of the investment in focus of these implementations behind us, we can now start to take advantage of using the new system capabilities heading into 2017, including the foundation for us to pursue omnichannel capabilities. We now possess greater insight into our customers' shopping preferences which will enable us to personalize and customize promotional offers in conjunction with our loyalty programs."
Kornberg also called the start to the holiday season "disappointing," which was reflected in the retailer's "negative low double digits" fourth quarter comparable store guidance. "While the majority of the quarter is still in front of us, and we believe we have the right assortment and marketing plan, we are taking a cautious stand which is reflected in our guidance," he said.
For the fiscal third quarter ended Oct. 31, Express reported:
- E-commerce sales jumped 14.9% to $96.3 million from $83.8 million in the year-ago quarter.
- Total sales fell 7.4% to $506.1 million from $546.6 million.
- Comparable-store sales, including e-commerce, fell 8%.
- Net income was $11.6 million, down 55.9% from $26.3 million.
- E-commerce represented 19.0% of total sales versus 15.3%.
For the first nine months of the fiscal year, Express reported:
- E-commerce sales up 3.0% to $243.4 million from $236.4 million in the year-ago quarter.
- Total sales down 4.5% to $1.514 billion from $1.585 billion.
- Net income was $34.6 million, down 42.7% from $60.4 million.
- E-commerce represented 16.1% of total sales versus 14.9%.