Express has received a notification letter from the New York Stock Exchange (NYSE) informing the retailer that it is no longer within continued listing criteria due to its stock price dropping below $1 for a 30-day trading period as of March 24. The retailer, which was trading at 78 cents per share as of April 4, has six months to bring its price above $1 for 30 consecutive days to regain compliance with the minimum pricing criteria.
Express noted that the warning will not impact its day-to-day operations and did not trigger any violation of its debt obligations. The retailer plans to formally notify the NYSE of its intent to cure the deficiency, including through a reverse stock split. Any action taken will be subject to board and stockholder approval.
The news follows the release of weak results for Q4 2022, which ended Jan. 28, 2023. Net sales fell 14% during the period, to $514.3 million, with comparable sales down 13%. Full-year results were stronger, with both net and comparable sales flat and retail store sales up 5% from fiscal 2021 levels. Express attributed its troubles to a strong performance in the first half of 2022 that faltered during the latter part of the year.
“Our strategy to elevate our brand with higher average unit retails and reduced promotions — which had driven steady growth for five consecutive quarters through the second quarter of 2022 — bumped up against reduced consumer spending and increased price sensitivity in discretionary categories,” said Tim Baxter, CEO of Express in a statement. “Our Women’s business further impacted our performance in the second half of the year. We recalibrated with urgency to address imbalances in the assortment architecture late in the third quarter of 2022, improve the composition of our inventory and advance product deliveries.”
Baxter expects the brand’s performance to improve in the coming year, with comparable sales growth in the low single digits. The retailer also could benefit from a partnership with WHP Global, owner of the Toys ‘R’ Us, Babies ‘R’ Us and Anne Klein brands, that includes plans to acquire “multiple” fashion brands and expand monetization of the Express brand through global licensing partnerships.