OG meme stock Express (EXPR) is having another day in the sun as it appears retail investors were right to bet on a post-pandemic turnaround at the specialty apparel retailer.
Shares of Express exploded nearly 20% in Monday trading and Tim Baxter, the retailer's CEO, is upbeat about the company's outlook.
"We are regaining our relevance," said Baxter in an interview on Yahoo Finance Live.
Baxter — a former long-time merchant at Macy's who took over as Express CEO in May 2019 — has worked diligently to rebuild the company during one of the most challenging periods ever in retail. Baxter has refreshed his management team, pruned underperforming locations, released an updated version for Express stores and made assortments more relevant to the return-to-work crowd.
Today, he unveiled a new community commerce platform on mobile designed to drive e-commerce sales to $1 billion by 2024.
"People have begun to think of us as a brand with purpose. Our purpose is to create confidence and self-expression. It's a purpose that resonates incredibly well with our consumers. They want to help getting dressed every day. They want help knowing what to wear for certain occasions, and they look to us for that guidance. That has been an incredibly important part of reinvigorating the brand. We are seeing incredible metrics and engagement from our consumers as we have shifted all of our marketing toward supporting that brand purpose and completely changed our assortments," Baxter explained.
The efforts have started to bear fruit for a brand that prior to Baxter's arrival many thought was running the risk of following other struggling retailers into bankruptcy.
Comparable sales rose 5% in the first quarter, Express reported in early June. The company posted an operating loss of $23.8 million compared to a loss of $128.7 million a year earlier.
Express said at the time it would show sequential comparable sales improvement throughout 2021. In addition, operating profits in the second half of the year would be positive.
That guidance still looks to be intact.
"We have definitely seen a resurgence in what you would call historically wear-to-work categories. We saw an inflection point in our business at Easter when vaccinations were continuing to roll out pretty aggressively throughout the country and restrictions were beginning to lift. And the wear-to-work and occasion-based business certainly have had a steady resurgence after that inflection point," Baxter said.
The bullish tone by Baxter only fueled the thesis by retail investors, which embraced the stock in January as it fit all the qualifications of a meme stock (turnaround potential, high short position, well-known brand). Shares of Express prior to Monday were up about 450% year-to-date, per Yahoo Finance Plus data.
Baxter told Yahoo Finance Live he is prepared to issue shares of stock to raise capital to support the company's turnaround.
Explained Baxter, "We have not stated publicly any plan to sell shares, but we do have it [available] from a governance perspective. We were looking back in late 2020 at different options to raise capital because at that time we didn't know how long we would be dealing with the effects of COVID-19 and whether or not we would need additional capital. We looked at that [selling stock] as an option and as a board, decided that we should have that at our disposal should we choose to use it or need to use it. But we announced back in January — right before our stock spiked — we announced about $140 million in additional financing. And I said at the time I was confident that gave us the capital and liquidity that we needed to weather the storm. Obviously our performance has improved very significantly since then, so I am more confident than ever that we are on track to achieve our long-term stated goal of that mid-single digit operating margin."