As it continues to navigate the coronavirus pandemic, Express Inc. is noting an “apparent stabilization” in store sales and traffic.
The apparel and accessories chain, which is in the middle of executing its turnaround plan, recorded a “consistent acceleration” in sales and traffic through the third week of June followed by a “deceleration” as new COVID-19 hotspots emerged in several states. However, sales and traffic appeared to stabilize in July, with total comps at negative 20% for the month.
The results were also driven by positive growth in its e-commerce business, which accelerated from negative 35% in early May to positive 25% in the first half of July. The company attributed the stabilization to a new product assortment, its revamped online platform and the introduction of both ship-from-store and buy online, pick-up in store capabilities in more than 50% of its outposts.
“Our second consecutive month of positive e-commerce demand coupled with the apparent stabilization in store sales and traffic indicate that our new product vision and brand positioning are resonating with customers,” CEO Tim Baxter said in a statement. “I expect our comparable sales trend to improve as we resume flowing new receipts over the next several weeks.”
Now, Express anticipates second-quarter comparable store sales and net revenues to be down a respective 24% and 48% on a year-over-year basis.
To preserve liquidity, the retailer has accessed $165 from its credit facility, as well as cut back on expenses, capital expenditures and working capital. Over the past few months, it has reduced its inventory, furloughed most of its store associates and a number of corporate employees, suspended merit pay increases and implemented a hiring freeze.
“We are still in the early stages of a comprehensive strategic transformation and are navigating the ongoing impacts of the pandemic by upholding the foundational elements of The EXPRESSway Forward [corporate strategy] while also taking decisive actions to protect the financial health of our company,” Baxter added. “My confidence in our team and our strategy is as strong as ever, and we are well positioned to emerge from this challenging period with the resources and ability to achieve our goal of long-term profitable growth.”
Express is expected to report second-quarter financial results on Aug. 26.