Express, Inc. (EXPR) Stock Prices Undergo Volatility as Pandemic Concerns Continue

Express, Inc. (EXPR) stock prices were down by 4.98% as of market close on April 30th 2021, bringing the price per share down to USD$3.05 at the end of the trading day. Subsequent pre-market fluctuations saw the price recover marginally with a 1.97% upswing, bringing the stock price to USD$3.11.

Financials Devastated by Pandemic

Consolidated net sales for the fourth quarter of 2020 were down 29% to USD$430 million compared to reports from the same quarter of the previous year. EXPR also experienced a 28% fall in comparable retail sales from both their physical and online establishments in Q4 2020 as compared to Q4 2019. Gross margins came out to 16.6% of the net sales reported for the fourth quarter of 2020, down from the 27% reported in Q4 2019. The across the board suffering of performance is due primarily to the effects of the ongoing pandemic and consequent health regulations and restrictions.

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Limited Liquidity

Largely as a result of limitations imposed on the company by the terms of its existing credit facilities, EXPR reported a severe reduction in cash and cash equivalents at the company’s disposal. With USD$207.1 million having been reported as of December 31st 2019, EXPR reported USD$55.9 million as of December 31st 2020. Existing long-term debt of USD$192 million was also reported by the company as of the end of the fiscal year 2020.

EXPR’s Financing Options

The company announced the entering into a definitive loan agreement with Wells Fargo Sycamore Partners and Bank of America Merrill Lynch on January 14th 2021. The agreement will see EXPR consolidate its liquidity position by USD$140 million, with Sycamore Partners as the lead lenders. Of the total amount, USD$90 million will be in the form of a FILO Term Loan with a maturation date of May 24th 2024. The remaining balance of UDS$50 million will be through a Delayed Draw Term.

Revolving Credit Facility

In an effort to maintain a strong liquidity position for the rest of the year the company the company continues to leverage its existing USD$250 million revolving credit facility. Of the sum total, EXPR has taken out a tranche of USD$106.1 million in the fourth quarter of 2020. As of January 30th 2021, the company’s net outstanding amount was UD$196.1 million under its revolving credit facility, with an additional USD$35.6 available to EXPR.

Additional Measures to Improve Liquidity

In additional bids to improve their liquidity position, EXPR has sought to circumvent the devastating effects of the global pandemic. In Q1 2021, the company negotiated USD$50 million in rent abatement, USD$25 million in rent reductions, an USD$10 million in rent deferrals. As online platform increasingly become consumers’ outlet of choice, the company has pushed its business model towards e-commerce as a means of adapting to the pandemic. Details of their transitionary strategy are expected to be disclosed in the second quarter of 2021.

Future Outlook for EXPR

Despite the severe and adverse effects of the prolonged pandemic, EXPR has continued to take steps to mitigate further losses and set itself up to recover in the post-pandemic market. The reduction of overheads in tandem with the extensive generation of capital has investors looking to management to signal in an era of significant growth. With the on-going transition to e-commerce, current and potential investors hope for substantial and sustained increases in shareholder value.


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