Express 2011 Annual Report Download - page 3

On behalf of the Board of Directors and the Associates of Express, it is with great pleasure
that I present our 2011 Annual Report. I am very proud to share with you another year of
strong growth and considerable achievements toward our long term goals. In fact, from
the day we rang the bell at the New York Stock Exchange in May of 2010, we’ve performed
at or above expectations quarter over quarter.
Let me be clear, our strong performance is inextricably linked to discipline. It is linked to
the commitment to our Go-To-Market strategy. It is also linked to our four pillars of growth.
We see tremendous opportunity ahead to expand our fashion authority within our target
demographic, the 20-to-30 year-old girl and guy, many of whom shop Express for all their
lifestyle needs. Our new product and marketing initiatives, coupled with our growth plans
in stores and e-commerce, create the opportunity to further increase our customer reach
within our demographic.
Our refined Go-to-Market strategy and data driven process have led to consistent
improvement across key operating metrics as we have continued to bring to market strong
selling fashion across our four end uses of casual, jeanswear, wear-to-work and going out.
This is best evidenced by our financial results in 2011 which included a year over year 9%
increase in net sales, a 6% increase in comparable sales and a 36% increase in operating
income, which rose more than three times the rate of net sales growth driven by expansion
in gross profit margin and increased expense efficiencies. In 2011, operating margin for
the year increased over 2010 by 260 basis points to 13.1% of net sales moving us closer to
our mid teens operating margin goal…all achieved in a difficult retail environment. At the
end of 2011, our balance sheet remained strong with over $152 million in cash and cash
equivalents even after reducing debt by $169 million, and our inventory was in great shape.
The year included several significant milestones that we believe elevated our brand
with consumers and will lead to incremental growth opportunities in 2012 as well as the
next several years. We introduced and tested a new store design, which makes a more
powerful statement across our four end uses and truly showcases the authority of our
product offering for both men and women. We were so pleased with the results of the
design that all of our new and remodeled stores beginning in late Spring 2012 will be in this
new format.
Heightening awareness of our strong fashion authority and value for our 20 to 30- year-
old demographic was a key focus during the year. We created a closer bond with our
customers by piloting a new loyalty program – EXPRESS Next – launched in Spring
of 2012. We also introduced expanded fall and holiday catalogs and made strategic
investments in our advertising that will continue to build the intrinsic value of our brand.
Our customers and fans even helped us set a Guinness World Record for Most People
Modeling on a Catwalk in 2011. We’re everywhere our customers are and continue to
connect with them in new and meaningful ways.
DEAR
VALUED
BUSINESS
PARTNER