June 4, 2014, 10:48 AM

Express Inc.’s web sales decline by 2% in Q1

But the web will account for 16% of total sales this year, the retailer reports.

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Youth-oriented apparel retailer Express Inc. reported a disappointing first quarter in 2014, both in its store and online.

For the first quarter of fiscal 2014 ended May 3, Express reported:

  • E-commerce sales declined 2.4% to $69.0 million from $70.7 million in the first quarter of 2013.
  • Total sales decreased to $460.7 million from $509.4 million in the first quarter of 2013, a decline of 9.6%.
  • Comparable-store sales, including e-commerce, decreased 11%.
  • Net income was $5.1 million, down by 84.3% from net income of $32.4 million in the first quarter of 2013.

Despite the year-over-year decrease, online conversion rates were higher and e-commerce for the retailer is on track to account for 16% of total business in 2014 and potentially 20% in the future, Michael A. Weiss, CEO, told Wall Street analysts on the company’s recent earnings call, according to a transcript from Seeking Alpha. Online sales made up 15.3% of 2013 total revenue. The retailer recorded double-digit increases in the first few weeks of Q2, leading up to Memorial Day, Weiss said, but promotions for Memorial Day were not as successful as in 2013.

Express fell short of forecasts for total sales in Q1 for several reasons, Weiss told analysts. “We anticipated that traffic and sales trends would improve given the Easter shift and more seasonable weather. We also expected that reordered merchandise would be back in the stores to further help drive sales. The business did turn, and our April comp was up high-single digits. It did not, however, reach our internal projection,” Weiss said.

Express also announced positive results from its mobile commerce segment which is the fastest-growing channel of the business, led by its mobile app, Weiss said, but did not provide specific numbers.

The retailer also announced plans to redesign the app as its demographic moves toward mobile shopping, president David G. Kornberg told analysts. “To capitalize more fully on this trend, we are redesigning our mobile app to simplify the shopping process,” Kornberg said.

Express Inc. is No. 96 in Internet Retailer’s 2014 Top 500 Guide.

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