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Express shares soar 26% premarket as smaller-than-expected loss weighs against sales miss

Economy, Finance

Express Inc. shares shot up 26% in premarket trade Wednesday, after the clothing retailer posted a smaller-than-expected loss for the fourth quarter, but sales that fell short of estimates. Columbus, Ohio-based Express said it had a loss of $53.3 million, or 82 cents a share, in the quarter, wider than the loss of $141.6 million, or $2.21 a share, posted in the year-earlier period. The company’s adjusted per-share loss came to 66 cents a share, narrower than the 83 cents loss consensus of FactSet analysts. Sales fell 29% to $430.3 million from $606.7 million, below the $490 million FactSet consensus. Comparable retail sales, which combine Express stores and e-commerce, fell 28% from the year-earlier period as the pandemic continued to weigh. The company secured an additional $140 million of financing via a deal with Sycamore Partners, Wells Fargo and Bank of America Merrill Lynch, and negotiated $85 million in rent abatements, deferrals and future rent reductions with its landlords. “The company is finalizing a strategy that will grow its digital channel to $1.0 billion in 2024 and expects to unveil the details of the strategy in the second quarter of 2021,” said the earnings release. It is not offering detailed guidance because of the uncertainty created by the pandemic. Shares have gained 36% in the last 12 months, while the S&P 500 has gained 41%.

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