NEW YORK (TheStreet) -- Shares of Express (EXPR - Get Report) plummeted more than 19% on Wednesday after the specialty apparel chain sharply tempered earnings guidance based on a weak holiday outlook.
Express reported third-quarter net income of $19.3 million, or 23 cents a share, on Wednesday, compared to $17.4 million, or 20 cents a share, in the year-earlier quarter. Earnings missed Wall Street estimates by 2 cents a share.
Net sales rose 7% in the quarter to $503 million, above analysts' expectations of $499.7 million, according to Yahoo! Finance. Comparable-store sales rose 5%, the company said.
Yet shares were falling 19.2% to $19.93 shortly after the markets opened after the retailer, which operates 630 stores catering to teens and early work force women and men, said that Thanksgiving weekend sales could spell trouble for broader holiday sales.
"We delivered a solid third quarter, in line with our guidance and highlighted by a 5% increase in comparable sales and 15% EPS growth," Chairman and CEO Michael Weiss said in the earnings statement. "These results were achieved against the backdrop of an extremely challenging and promotional retail environment. Our carefully edited assortment, spanning our four end uses, constituted a differentiated and compelling offering that resonated with our customers."
"Thanksgiving week sales exceeded last year's, however results did not meet our expectations," Weiss said. "We had been planning for a promotional holiday season but we now expect the intensity of those promotions to reach heightened levels and we are updating our full year guidance accordingly."
Express forecast fourth quarter earnings of between 66 cents and 71 cents a share. Analysts, according to Thomson Reuters, were expected fourth-quarter earnings of 78 cents a share. The company also said that comparable sales for the quarter were expected to be in the "low single digits."
For the full-year, Express said it expects earnings in the range of $1.46 a share to $1.51 a share, compared to consensus expectations of $1.61 a share. Full-year comparable sales growth is also expected to be in the low single digits.
-- Written by Laurie Kulikowski in New York.