Thanks for your input!! I think you've hit a lot of broad emotion over EXPR but I'll harp the Devil's Advocate for discussion's sake.
1) I shop at Express fairly frequently and haven't noticed any increase in "Sales" that would affect margin. They have pumped their image hard lately but Express does a great job of cycling their "psych-sales"; run the math and you'll find everything red-tagged works out to the same price its always been. Whether you buy 1 and get this or break the $150 threshold for 30% off you can never break Express' magical minimum price for their items.
2) Here's where I think Express has a unique model on other retailers because half of the store's inventory doesn't change (shirts & suits). I'd agree that fashion trends would have the greatest affect on EXPR's margin, but its magnitude should be less than other trend dependent retailers. You can have more or less "trend" shoppers in a quarter but EXPR always has the shirt & suit core to stabilize income.
3) Business as usual, positive to know EXPR is expanding.
4) Again I disagree on trends, Express to me has never had to compete fashion-wise; since I can remember EXPR always had the same semi-formal/urban hipster look. They've also never been the fashion leader; branding isn't so much important as I believe their core demographic is focused. The type of shoppers that shop at Express are they type that want that "look", these people will always make up x% of the population. The only true competition Express faces is the rapidly growing Urban Outfitters. But again, the cuts in margin will be less because of Express's shirt & suit half. When U.O. gets into that market then EXPR is in trouble. International expansion I don't see happening, they're angle has always been selling the "Euro" look to North America. Not good for growth, but...better for margins.
5) Counter-counter argument on peak-margin is I personally think EXPR has already reached it. Assuming accessories & online sales are maxed, what more could they possibly add to their mix? Notwithstanding I'm still watching EXPR carefully, their net income hasn't slowed. Since going public they've managed to grow the company's bank accounts by 9%/yr. Here's a retailer with a business that makes money and a customer core that I don't see fluctuating.
So, I peg EXPR to the middle of the "Value" box. I think they're growth is limited, but they've established themselves within a fashion niche. So long as the 1MX shirt comes in white I'll continue to buy it. If that profit is at a yoy 9% of the company's worth...let's see the dividend!!!
Good summary from a shopper's experience (obviously, at my age I don't shop at Express).
I think the peak-margin story started JP Morgan's report sometimes around a month ago, upgrade U.O. and downgrade Express. They cited that AUR (Pricing) quarter-to-date was down nearly 15%. I didn't find similar pricing statement from other analysts except a few citing on-sale activities heavier than last year (short of quantifing it). One report even stated AUR 3.5% higher than last year. I don't know where JPM got that pricing info from. Well, with the complex red-tagging strategy, I guess it not that easy to call out a percentage number.
We are a week beyond quarter closed. Taking another week or so, if there isn't a pre-annoucement, we could probably conclude a false-alarm (like SHOO did at $33).
P.S. I think watch and accessories are new. On-line sales still grows at 20% rate. And, on-line sales does get to international customers.
BTW, Three teenager A's (ARO, AEO and ANF) are stopping competing within themselves. The color schemes/designs are pointing their attempts to move into U.O.'s and Forever-21's turfs.