(By Balachander) Express Inc. (NYSE:EXPR) shares tumbled 16.7 percent in premarket trading on Tuesday after the apparel retailer reduced its third-quarter earnings forecast, citing an abrupt change in traffic and higher promotional activity.
Columbus-Ohio-based Express now sees third-quarter earnings per share (EPS) of 16 cents to 20 cents from prior view of between 27 cents and 32 cents, while Wall Street analysts' expect 29 cents.
It currently forecasts comparable sales to drop in the mid single digit range versus flat to up low single digits forecasted earlier.
"While our sales in August were in line with the expectations we provided when we introduced third quarter guidance, trends became increasingly difficult in September driven by an abrupt change in traffic," commented CEO Michael Weiss.
In August, the company slashed its full-year earnings forecast after second-quarter sales fell short of market expectations amid drop in margins. At that time, the company also guided third quarter below consensus.
For the three months ended July 30, EPS increased to 18 cents from 17 cents, topping consensus estimate by a penny. Net sales grew 2 percent to $673.2 million, but fell shy of Wall Street projections of a growth of 4.7 percent.
For the full year, the company expects EPS in the range of $1.69 to $1.70. The company earlier projected 2012 EPS in the range of $1.79 to $1.89. Comparable sales is expected to grow in low single digits for the full year versus low to mid single digits increase projected earlier.
EXPR shares ended Monday's regular trading at $15.01. Over the past year, shares have been trading between $14.50 and $26.27.