COLUMBUS, Ohio (AP) -- Shares of Express declined 17 percent in premarket trading Tuesday after the clothing retailer cut its forecast for the current quarter because of fewer shoppers in September and heavy discounting.
The chain experienced "an abrupt change in traffic" last month and stepped up promotions, said CEO Michael Weiss. He said that customer traffic trends improved last week.
The company, which sells casual and work clothing meant to appeal to men and women in their 20s, cut its earnings expectations for its fiscal third quarter to 16 to 20 cents per share. It had previously predicted profit of 27 to 32 cents per share. Analysts surveyed by FactSet expect profit of 29 cents per share for the period ending in October.
Express now expects revenue at stores open at least a year to drop by a mid-single-digit percentage in the August-October period. Its prior forecast was for that metric, which is crucial for retailers because it excludes results from new and closing stores, to be flat or up by a low-single-digit percentage. In last year's third quarter, the revenue figure rose 5 percent.
Express' trends run counter to what's expected to be a strong back-to-school shopping season for U.S. retailers. It's typically the second biggest shopping period of the year after the holiday shopping season, and a barometer of what people are willing to spend in November and December.
Express Inc., which is based in Columbus, Ohio, runs more than 600 stores in the U.S. and Canada and has franchises in the Middle East and Latin America. It plans to report full third-quarter results and an outlook for the year during the week of Nov. 26.
Shares fell $2.60 to $12.41 before the market open. The company went public in May at $17 per share.