10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended May 5, 2018

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO ______

Commission File Number 001-34742

EXPRESS, INC.

(Exact name of registrant as specified in its charter)

Delaware	26-2828128
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1 Express Drive Columbus, Ohio	43230
(Address of principal executive offices)	(Zip Code)

Telephone: (614) 474-4001

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o    No  x

The number of outstanding shares of the registrant’s common stock was 74,524,088 as of June 2, 2018.

1

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (“Quarterly Report”) contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, and financial results, our plans and objectives for future operations, growth, initiatives, or strategies, plans to repurchase shares of our common stock, or the expected outcome or impact of pending or threatened litigation are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

External Risks such as:

• changes in consumer spending and general economic conditions;

• customer traffic at malls, shopping centers, and at our stores;

• competition from other retailers;

• our dependence upon independent third parties to manufacture all of our merchandise;

• changes in the cost of raw materials, labor, and freight;

• supply chain disruption;

• difficulties associated with our distribution facilities;

• natural disasters, fire, and other events that cause business interruption; and

• our reliance on third parties to provide us with certain key services for our business.

Strategic Risks such as:

• our ability to identify and respond to new and changing fashion trends, customer preferences, and other related factors;

• fluctuations in our sales, results of operations, and cash levels on a seasonal basis and due to a variety of other factors, including our product offerings relative to customer demand, the mix of merchandise we sell, promotions, inventory levels, and sales mix between stores and e-commerce;

• our dependence on a strong brand image;

• our ability to adapt to changes in consumer behavior and develop and maintain a relevant and reliable omni-channel experience for our customers;

• our dependence upon key executive management; and

• our ability to execute our growth strategy, including improving profitability, providing an exceptional brand and customer experience, transforming and leveraging our systems and processes, and cultivating a strong company culture, and achieving our strategic objectives, including delivering compelling merchandise at an attractive value, investing in growing brand awareness and retaining and acquiring new customers to the Express brand, growing e-commerce sales and expanding our omni-channel capabilities, optimizing our store footprint, and managing our overall cost structure.

Information Technology Risks such as:

• the failure or breach of information systems upon which we rely; and

• our ability to protect our customer data from fraud and theft.

Financial Risks such as:

• our substantial lease obligations;

• restrictions imposed on us under the terms of our asset-based loan facility, including restrictions on our ability to repurchase shares of our common stock;

• impairment charges on long-lived assets;

• claims made against us resulting in litigation or changes in laws and regulations applicable to our business;

• our inability to protect our trademarks or other intellectual property rights that may preclude the use of our trademarks or other intellectual property around the world;

• changes in tax requirements, results of tax audits, and other factors that may cause fluctuations in our effective tax rate; and

• our failure to maintain adequate internal controls.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. For a discussion of these risks and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended February 3, 2018 (“Annual Report”), filed with the Securities and Exchange Commission (“SEC”) on April 4, 2018. The forward-looking statements included in this Quarterly Report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

2

INDEX

PART I	FINANCIAL INFORMATION	4
ITEM 1.	FINANCIAL STATEMENTS.	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	20
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	28
ITEM 4.	CONTROLS AND PROCEDURES.	28
PART II	OTHER INFORMATION	28
ITEM 1.	LEGAL PROCEEDINGS.	28
ITEM 1A.	RISK FACTORS.	29
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	29
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	29
ITEM 4.	MINE SAFETY DISCLOSURES.	29
ITEM 5.	OTHER INFORMATION.	29
ITEM 6.	EXHIBITS.	30

3

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

EXPRESS, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

	May 5, 2018			February 3, 2018
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	184,521		$	236,222
Receivables, net	11,248			12,084
Inventories	277,513			260,728
Prepaid minimum rent	29,920			30,779
Other	26,182			24,319
Total current assets	529,384			564,132
PROPERTY AND EQUIPMENT	1,051,508			1,047,447
Less: accumulated depreciation	(657,752		)	(642,434		)
Property and equipment, net	393,756			405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618			197,618
DEFERRED TAX ASSETS	7,358			7,346
OTHER ASSETS	12,873			12,815
Total assets	$	1,140,989		$	1,186,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	125,502		$	145,589
Deferred revenue	37,811			41,240
Accrued expenses	106,586			110,563
Total current liabilities	269,899			297,392
DEFERRED LEASE CREDITS	134,283			137,618
OTHER LONG-TERM LIABILITIES	102,407			103,600
Total liabilities	506,589			538,610
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY:
Preferred stock – $0.01 par value; 10,000 shares authorized; no shares issued or outstanding	—			—
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	935			926
Additional paid-in capital	202,904			199,099
Retained earnings	704,912			704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(274,351		)	(256,106		)
Total stockholders’ equity	634,400			648,314
Total liabilities and stockholders’ equity	$	1,140,989		$	1,186,924

See Notes to Unaudited Consolidated Financial Statements.

4

EXPRESS, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(Amounts in Thousands, Except Per Share Amounts)

(Unaudited)

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
NET SALES	$	479,352		$	474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	336,190			341,911
Gross profit	143,162			132,281
OPERATING EXPENSES:
Selling, general, and administrative expenses	140,634			132,339
Restructuring costs	—			6,271
Other operating (income) expense, net	(247		)	401
Total operating expenses	140,387			139,011
OPERATING INCOME/(LOSS)	2,775			(6,730		)
INTEREST EXPENSE, NET	174			797
OTHER LOSS/(INCOME), NET	—			(12		)
INCOME/(LOSS) BEFORE INCOME TAXES	2,601			(7,515		)
INCOME TAX EXPENSE/(BENEFIT)	2,084			(4,847		)
NET INCOME/(LOSS)	$	517		$	(2,668	)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation (loss)/gain	$	—		$	(369	)
Other Comprehensive (Loss) Income	$	—		$	(369	)
COMPREHENSIVE INCOME/(LOSS)	$	517		$	(3,037	)
EARNINGS PER SHARE:
Basic	$	0.01		$	(0.03	)
Diluted	$	0.01		$	(0.03	)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	75,407			78,446
Diluted	76,123			78,446

See Notes to Unaudited Consolidated Financial Statements.

5

EXPRESS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

(Unaudited)

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	517		$	(2,668	)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	21,162			22,893
Loss on disposal of property and equipment	231			403
Impairment charge	—			5,512
Share-based compensation	3,814			4,018
Deferred taxes	(12		)	2,286
Landlord allowance amortization	(2,973		)	(3,126		)
Changes in operating assets and liabilities:
Receivables, net	837			(442		)
Inventories	(16,785		)	(43,772		)
Accounts payable, deferred revenue, and accrued expenses	(29,530		)	17,424
Other assets and liabilities	(2,040		)	(1,577		)
Net cash provided by operating activities	(24,779		)	951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(7,920		)	(14,623		)
Net cash used in investing activities	(7,920		)	(14,623		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(454		)	(414		)
Repayments of financing arrangements	(303		)	(303		)
Repurchase of common stock under share repurchase program	(15,638		)	—
Repurchase of common stock for tax withholding obligations	(2,607		)	(1,534		)
Net cash used in financing activities	(19,002		)	(2,251		)
EFFECT OF EXCHANGE RATE ON CASH	—			(458		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(51,701		)	(16,381		)
CASH AND CASH EQUIVALENTS, Beginning of period	236,222			207,373
CASH AND CASH EQUIVALENTS, End of period	$	184,521		$	190,992

See Notes to Unaudited Consolidated Financial Statements.

6

Notes to Unaudited Consolidated Financial Statements

1. Description of Business and Basis of Presentation

Business Description

Express, Inc., together with its subsidiaries (“Express” or the “Company”), is a specialty retailer of women’s and men’s apparel and accessories, targeting the 20 to 30 year old customer. Express merchandise is sold through retail and factory outlet stores and the Company’s e-commerce website, www.express.com, as well as its mobile app. As of May 5, 2018, Express operated 485 primarily mall-based retail stores in the United States and Puerto Rico as well as 146 factory outlet stores. Additionally, as of May 5, 2018, the Company earned revenue from 16 franchise stores in Latin America. These franchise stores are operated by franchisees pursuant to franchise agreements. Under the franchise agreements, the franchisees operate stand-alone Express stores that sell Express-branded apparel and accessories purchased directly from the Company.

On May 4, 2017, Express announced its intention to exit the Canadian market and Express Fashion Apparel Canada Inc. and one of its wholly-owned subsidiaries filed for protection in Canada under the Companies’ Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice in Toronto. As of May 4, 2017, Canadian retail operations were deconsolidated from the Company’s financial statements. Canadian financial results prior to May 4, 2017 are included in the Company’s consolidated financial statements. See Note 12 for additional information.

Fiscal Year

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the calendar year in which the fiscal year commences. References herein to “2018” and “2017” represent the 52-week period ended February 2, 2019 and the 53-week period ended February 3, 2018, respectively. All references herein to “the first quarter of 2018“ and “the first quarter of 2017“ represent the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and therefore do not include all of the information or footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for 2018. Therefore, these statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended February 3, 2018, included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 4, 2018.

Principles of Consolidation

The unaudited Consolidated Financial Statements include the accounts of Express, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Segment Reporting

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that, together, its President and Chief Executive Officer and its Chief Operating Officer are the Chief Operating Decision Maker, and that there is one operating segment. Therefore, the Company reports results as a single segment, which includes the operation of its Express brick-and-mortar retail and outlet stores, e-commerce operations, and franchise operations.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expense during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the date of the unaudited Consolidated Financial Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new information becomes available.

7

Recently Issued Accounting Pronouncements - Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 in the first quarter of fiscal 2018 under the full retrospective method, which required the adjustment of each prior period presented. The primary impact of ASC 606 relates to the accounting for points earned under the Company’s customer loyalty program, the timing of revenue recognition for e-commerce sales, and the classification on the income statement of funds received and certain costs incurred related to our private label credit card program. Upon the adoption of ASC 606, the Company recognized a cumulative effect of a change in accounting principle through a reduction to retained earnings on January 31, 2016, the first day of fiscal 2016, in the amount of $6.1 million. The impact of the adoption of ASC 606 on previously issued financial statements included in this report are as follows:

8

CONSOLIDATED BALANCE SHEET(unaudited, in thousands except per share amounts)	February 3, 2018
ASSETS	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CURRENT ASSETS:
Cash and cash equivalents	$	236,222		$	—		$	236,222
Receivables, net	12,084			—			12,084
Inventories	266,271			(5,543		)	260,728
Prepaid minimum rent	30,779			—			30,779
Other	19,780			4,539			24,319
Total current assets	565,136			(1,004		)	564,132
PROPERTY AND EQUIPMENT	1,047,447			—			1,047,447
Less: accumulated depreciation	(642,434		)	—			(642,434		)
Property and equipment, net	405,013			—			405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618			—			197,618
DEFERRED TAX ASSETS	7,025			321			7,346
OTHER ASSETS	12,815			—			12,815
Total assets	$	1,187,607		$	(683	)	$	1,186,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	145,589		$	—		$	145,589
Deferred revenue	28,920			12,320			41,240
Accrued expenses	116,355			(5,792		)	110,563
Total current liabilities	290,864			6,528			297,392
DEFERRED LEASE CREDITS	137,618			—			137,618
OTHER LONG-TERM LIABILITIES	105,125			(1,525		)	103,600
Total liabilities	533,607			5,003			538,610
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	926			—			926
Additional paid-in capital	199,099			—			199,099
Accumulated other comprehensive loss	—			—			—
Retained earnings	710,081			(5,686		)	704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(256,106		)	—			(256,106		)
Total stockholders’ equity	654,000			(5,686		)	648,314
Total liabilities and stockholders’ equity	$	1,187,607		$	(683	)	$	1,186,924

9

CONSOLIDATED STATEMENTS OF INCOME	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands, except per share amounts)	As Reported			Adjustments for adoption of ASC 606		As Adjusted
NET SALES	$	467,029		$	7,163	$	474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	340,031			1,880		341,911
Gross profit	126,998			5,283		132,281
OPERATING EXPENSES:
Selling, general and administrative expenses	130,072			2,267		132,339
Restructuring costs	6,271			—		6,271
Other operating expense, net	401			—		401
Total operating expenses	136,744			2,267		139,011
OPERATING INCOME	(9,746		)	3,016		(6,730		)
INTEREST EXPENSE, NET	797			—		797
INTEREST INCOME
OTHER INCOME, NET	(12		)	—		(12		)
(LOSS) INCOME BEFORE INCOME TAXES	(10,531		)	3,016		(7,515		)
INCOME TAX (BENEFIT) EXPENSE	(6,000		)	1,153		(4,847		)
NET INCOME (LOSS)	$	(4,531	)	$	1,863	$	(2,668	)
EARNINGS PER SHARE:
Basic	$	(0.06	)	$	0.02	$	(0.03	)
Diluted	$	(0.06	)	$	0.02	$	(0.03	)

10

CONSOLIDATED STATEMENT OF CASH FLOWS	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands)	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	(4,531	)	$	1,863		$	(2,668	)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	22,893			$	—		22,893
Loss on disposal of property and equipment	403			$	—		403
Impairment charge	5,512			$	—		5,512
Share-based compensation	4,018			$	—		4,018
Deferred taxes	1,133			$	1,153		2,286
Landlord allowance amortization	(3,126		)	$	—		(3,126		)
Changes in operating assets and liabilities:
Receivables, net	(442		)	$	—		(442		)
Inventories	(46,220		)	$	2,448		(43,772		)
Accounts payable, deferred revenue, and accrued expenses	20,635			$	(3,211	)	17,424
Other assets and liabilities	676			$	(2,253	)	(1,577		)
Net cash provided by operating activities	951			—			951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(14,623		)	$	—		(14,623		)
Net cash used in investing activities	(14,623		)	—			(14,623		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(414		)	$	—		(414		)
Repayments of financing arrangements	(303		)	$	—		(303		)
Repurchase of common stock for tax withholding obligations	(1,534		)	$	—		(1,534		)
Net cash used in financing activities	(2,251		)	—			(2,251		)
EFFECT OF EXCHANGE RATE ON CASH	(458		)	$	—		(458		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(16,381		)	—			(16,381		)
CASH AND CASH EQUIVALENTS, Beginning of period	207,373			$	—		207,373
CASH AND CASH EQUIVALENTS, End of period	$	190,992		$	—		$	190,992

Recently Issued Accounting Pronouncements - Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. Under ASU 2016-02, a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on its balance sheet. The new standard is effective for annual and interim periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method with early adoption permitted. The Company continues to evaluate the impact that adopting ASU 2016-02 will have on its consolidated financial statements, but the most significant impact will be to increase assets and liabilities on the consolidated balance sheet by the present value of the Company’s leasing obligations, which are primarily related to store leases, as well as additional disclosures required.

2. Revenue Recognition

The following is information regarding the Company’s major product categories and sales channels:

11

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Apparel	$	416,482	$	412,975
Accessories and other	48,302		47,277
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Stores	$	332,150	$	361,922
E-commerce	132,634		98,330
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

Other revenue consists primarily of sell-off revenue related to mark-out-of-stock inventory sales to third parties, shipping and handling revenue related to e-commerce activity, revenue earned from our private label credit card agreement, and revenue from franchise agreements.

Revenue related to the Company’s international franchise operations for the thirteen weeks endedMay 5, 2018 and April 29, 2017, respectively, were not material for any period presented and, therefore, are not reported separately from domestic revenue.

Revenue Recognition Policies

Merchandise Sales

The Company recognizes sales for in-store purchases at the point-of-sale. Revenue related to e-commerce transactions is recognized upon shipment based on the fact that control transfers to the customer at that time. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract and as a result any amounts received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income for amounts paid to applicable carriers. Associate discounts on merchandise purchases are classified as a reduction of net sales. Net sales excludes sales tax collected from customers and remitted to governmental authorities.

Loyalty Program

The Company maintains a customer loyalty program in which customers earn points toward rewards for qualifying purchases and other marketing activities. Upon reaching specified point values, customers are issued a reward, which they may redeem on merchandise purchases at the Company’s stores or on its website. Generally, rewards earned must be redeemed within 60 days from the date of issuance. The Company defers a portion of merchandise sales based on the estimated standalone selling price of the points earned. This deferred revenue is recognized as certificates are redeemed or expire. To calculate this deferral, the Company makes assumptions related to card holder redemption rates based on historical experience. The loyalty liability is included in deferred revenue on the unaudited Consolidated Balance Sheets.

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Beginning balance loyalty deferred revenue	$	14,186	$	15,662
Reduction in revenue/(revenue recognized)	887		(4,142		)
Ending balance loyalty deferred revenue	$	15,073	$	11,520

12

Sales Returns Reserve

The Company reduces net sales and provides a reserve for projected merchandise returns based on prior experience. Merchandise returns are often resalable merchandise and are refunded by issuing the same payment tender as the original purchase. The sales returns reserve was $14.5 million and $10.6 million as of May 5, 2018 and February 3, 2018, respectively, and is included in accrued expenses on the unaudited Consolidated Balance Sheets. The asset related to projected returned merchandise is included in other assets on the unaudited Consolidated Balance Sheets.

Gift Cards

The Company sells gift cards in its stores, on its e-commerce website, and through third parties. These gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. The gift card liability balance was $22.3 million and $26.7 million, as of May 5, 2018 and February 3, 2018, respectively, and is included in deferred revenue on the Consolidated Balance Sheets. The Company recognizes revenue from gift cards when they are redeemed by the customer. The Company also recognizes income on unredeemed gift cards, referred to as “gift card breakage.” Gift card breakage is recognized proportionately using a time-based attribution method from issuance of the gift card to the time when it can be determined that the likelihood of the gift card being redeemed is remote and that there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions. The gift card breakage rate is based on historical redemption patterns. Gift card breakage is included in net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning gift card liability	$	26,737		$	27,498
Issuances	8,384			8,228
Redemptions	(11,593		)	(12,046		)
Gift card breakage	(1,191		)	(1,130		)
Ending gift card liability	$	22,337		$	22,550

Private Label Credit Card

The Company has an agreement with Comenity Bank (the “Bank”) to provide customers with private label credit cards (the “Card Agreement”) which was amended on August 28, 2017 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo of the Express brand and can only be used at the Company’s retail store locations and e-commerce channel. The Bank is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts.

Pursuant to the Card Agreement, the Company receives amounts from the Bank during the term based on a percentage of private label credit card sales and is also eligible to receive incentive payments for the achievement of certain performance targets. These funds are recorded as net sales in the Consolidated Statements of Income and Comprehensive Income.

The Company also receives reimbursement funds from the Bank for expenses the Company incurs. These reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card. The reimbursement funds received related to these private label credit cards are recorded as net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.

In connection with the Card Agreement, the Bank agreed to pay the Company a $20.0 million dollar refundable payment which the Company recognized upon receipt as deferred revenue within other long-term liabilities in the unaudited Consolidated Balance Sheets and began to recognize into income on a straight-line basis commencing January of 2018. The remaining deferred revenue balance of $19.9 million will be recognized over the term of the amended Card Agreement within the other revenue component of net sales. In addition, the Company received $7.1 million in non-refundable payments during 2017 which were recognized in the other revenue component of net sales on the unaudited Consolidated Statements of Income with the related expenses classified as cost of goods sold, buying and occupancy.

.

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	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning balance refundable payment liability	$	19,906		$	—
Recognized in revenue	(719		)	—
Ending balance refundable payment liability	$	19,187		$	—

3. Earnings Per Share

The following table provides a reconciliation between basic and diluted weighted-average shares used to calculate basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 5, 2018	April 29, 2017
	(in thousands)
Weighted-average shares - basic	75,407	78,446
Dilutive effect of stock options and restricted stock units	716	—
Weighted-average shares - diluted	76,123	78,446

Equity awards representing 4.0 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen weeks ended May 5, 2018, as the inclusion of these awards would have been anti-dilutive. Equity awards representing 4.4 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen weeks endedApril 29, 2017, as the inclusion of these awards would have been anti-dilutive.

Additionally, for the thirteen weeks endedMay 5, 2018, approximately 1.5 million shares were excluded from the computation of diluted weighted average shares because the number of shares that will ultimately be issued is contingent on the Company’s performance compared to pre-established performance goals which have not been achieved as of May 5, 2018.

4. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date.

Level 1-Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2-Valuation is based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3-Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Financial Assets

The following table presents the Company’s financial assets, recorded in cash and cash equivalents on the unaudited Consolidated Balance Sheet, measured at fair value on a recurring basis as of May 5, 2018 and February 3, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall.

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	May 5, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	157,647	$	—	$	—
	February 3, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	139,920	$	—	$	—
Commercial paper	—		79,908		—
	$	139,920	$	79,908	$	—

The money market funds are valued using quoted market prices in active markets. The commercial paper is valued using other observable inputs for those securities based on information provided by an independent third party entity.

The carrying amounts reflected on the unaudited Consolidated Balance Sheets for the remaining cash and cash equivalents, receivables, prepaid expenses, and payables as of May 5, 2018 and February 3, 2018 approximated their fair values.

Non-Financial Assets

The Company’s non-financial assets, which include fixtures, equipment, improvements, and intangible assets, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur indicating the carrying value of these assets may not be recoverable, or annually in the case of indefinite lived intangibles, an impairment test is required. The impairment test requires the Company to estimate the fair value of the assets and compare this to the carrying value of the assets. If the fair value of the asset is less than the carrying value, then an impairment charge is recognized and the non-financial assets are recorded at fair value. The Company estimates the fair value using a discounted cash flow model. Factors used in the evaluation include, but are not limited to, management’s plans for future operations, recent operating results, and projected cash flows. During the thirteen weeks ended May 5, 2018 the Company did not recognize any impairment charges. For the thirteen weeks ended April 29, 2017, the Company recognized impairment charges of approximately $5.5 million related to its 17 Canadian stores, all of which are now closed and fully impaired. These charges are included in restructuring costs in the unaudited Consolidated Statements of Income. See Note 12 for additional discussion regarding the exit from Canada.

5. Intangible Assets

The following table provides the significant components of intangible assets:

	May 5, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		282		143
	$	198,043	$	282	$	197,761

	February 3, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		270		155
	$	198,043	$	270	$	197,773

The Company’s tradename, Internet domain names, and trademarks have indefinite lives. Licensing arrangements are amortized over a period of ten years and are included in other assets on the unaudited Consolidated Balance Sheets.

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6. Income Taxes

The provision for income taxes is based on a current estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. The Company’s effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in the Company’s assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items, and the mix of earnings.

The Company’s effective tax rate was 80.1% and 64.5% for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively. The effective tax rate for the thirteen weeks ended May 5, 2018 reflects $1.3 million of discrete tax expense related to a tax shortfall for share-based compensation.  The effective tax rate for the thirteen weeks ended April 29, 2017 reflects $5.0 million of discrete tax benefit related to our exit from Canada. This benefit was partially offset by discrete charges of $2.0 million related to a tax shortfall for share-based compensation and $1.2 million for a valuation allowance that was recorded against the deferred tax asset for deferred compensation. 

7. Lease Financing Obligations

In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved in the construction of structural improvements or takes construction risk prior to commencement of a lease, it is deemed the owner of the project for accounting purposes. Therefore, the Company records an asset in property and equipment on the unaudited Consolidated Balance Sheets, including any capitalized interest costs, and related liabilities in accrued interest and lease financing obligations in other long-term liabilities on the unaudited Consolidated Balance Sheets, for the replacement cost of the Company’s portion of the pre-existing building plus the amount of construction costs incurred by the landlord as of the balance sheet date.

The initial terms of the lease arrangements for which the Company is considered the owner are expected to expire in 2023 and 2029. The net book value of landlord funded construction, replacement cost of pre-existing property, and capitalized interest in property and equipment on the unaudited Consolidated Balance Sheets was $59.3 million and $60.2 million, as of May 5, 2018 and February 3, 2018, respectively. There was also $66.3 million and $66.7 million of lease financing obligations as of May 5, 2018 and February 3, 2018, respectively, in other long-term liabilities on the unaudited Consolidated Balance Sheets.

Rent expense relating to the land is recognized on a straight-line basis over the lease term. The Company does not report rent expense for the portion of the rent payment determined to be related to the buildings which are owned for accounting purposes. Rather, this portion of the rent payment under the lease is recognized as interest expense and a reduction of the lease financing obligations.

In February 2016, the Company amended its lease arrangement with the landlord of the Times Square Flagship store. The amendment provided the landlord with the option to cancel the lease upon sufficient notice through December 31, 2016. The option was never exercised and therefore expired on December 31, 2016. In conjunction with amending the lease, the Company recognized an $11.4 million put option liability that is being amortized through interest expense over the remaining lease term. As of May 5, 2018, the remaining balance related to the put option was $8.1 million of which $7.3 million is included within other long-term liabilities on the Consolidated Balance Sheets.

8. Debt

A summary of the Company’s financing activities are as follows:

Revolving Credit Facility

On May 20, 2015, Express Holding, LLC, a wholly-owned subsidiary of the Company (“Express Holding”), and its subsidiaries entered into an Amended and Restated $250.0 million secured Asset-Based Credit Facility (“Revolving Credit Facility”). The expiration date of the facility is May 20, 2020. As of May 5, 2018, there were no borrowings outstanding and approximately $246.7 million was available for borrowing under the Revolving Credit Facility.

The Revolving Credit Facility requires Express Holding and its subsidiaries to maintain a fixed charge coverage ratio of at least 1.0:1.0 if excess availability plus eligible cash collateral is less than 10% of the borrowing base. In addition, the Revolving Credit Facility contains customary covenants and restrictions on Express Holding’s and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, distributions, dividends, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or fiscal year, and permitted business activities. All obligations under the Revolving Credit Facility are guaranteed by Express Holding and its domestic subsidiaries (that are not

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borrowers) and secured by a lien on, among other assets, substantially all working capital assets including cash, accounts receivable, and inventory, of Express Holding and its domestic subsidiaries.

Letters of Credit

The Company may enter into stand-by letters of credit (“stand-by LCs”) on an as-needed basis to secure payment obligations for merchandise purchases and other general and administrative expenses. As of May 5, 2018 and February 3, 2018, outstanding stand-by LCs totaled $3.3 million and $3.3 million, respectively.

9. Share-Based Compensation

The Company records the fair value of share-based payments to employees in the unaudited Consolidated Statements of Income as compensation expense, net of forfeitures, over the requisite service period.

Share-Based Compensation Plans

The following summarizes share-based compensation expense:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Restricted stock units	$	3,399	$	3,155
Stock options	333		863
Performance-based restricted stock units	82		—
Total share-based compensation	$	3,814	$	4,018

The stock compensation related income tax benefit recognized by the Company during the thirteen weeks ended May 5, 2018 and April 29, 2017 was $2.2 million and $1.9 million, respectively.

Restricted Stock Units

During the thirteen weeks ended May 5, 2018, the Company granted restricted stock units (“RSUs”) under the 2010 Plan. The fair value of RSUs is determined based on the Company’s closing stock price on the day prior to the grant date in accordance with the 2010 Plan. The RSUs granted in 2018 vest ratably over four years and the expense related to these RSUs will be recognized using the straight-line attribution method over this vesting period.

The Company’s activity with respect to RSUs, including awards with performance conditions granted prior to 2018, for the thirteen weeks ended May 5, 2018 was as follows:

	Number of Shares		Grant Date Weighted Average Fair Value Per Share
	(in thousands, except per share amounts)
Unvested, February 3, 2018	2,902		$	11.06
Granted	1,924		$	6.90
Vested	(854	)	$	14.70
Forfeited	(117	)	$	11.61
Unvested, May 5, 2018	3,855		$	8.99

The total fair value of RSUs that vested during the thirteen weeks ended May 5, 2018 was $12.6 million. As of May 5, 2018, there was approximately $27.7 million of total unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.0 years.

Stock Options

The Company’s activity with respect to stock options during the thirteen weeks ended May 5, 2018 was as follows:

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	Number of Shares		Grant Date Weighted Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
	(in thousands, except per share amounts and years)
Outstanding, February 3, 2018	2,609		$	16.43
Granted	—		$	—
Exercised	—		$	—
Forfeited or expired	(36	)	$	13.02
Outstanding, May 5, 2018	2,573		$	16.47	5.3	$	14
Expected to vest at May 5, 2018	484		$	12.41	8.5	$	12
Exercisable at May 5, 2018	2,060		$	17.51	4.5	$	—

As of May 5, 2018, there was approximately $2.1 million of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of approximately 1.6 years.

Performance-based Restricted Stock Units

In the first quarter of 2018, the Company granted performance shares to a limited number of senior executive-level employees, which entitle these employees to receive a specified number of shares of the Company’s common stock upon vesting. The number of shares earned could range between 0% and 200% of the target amount depending upon performance achieved over the three year vesting period. The performance conditions of the award include adjusted diluted earnings per share (EPS) targets and total shareholder return (TSR) of the Company’s common stock relative to a select group of peer companies. A Monte Carlo valuation model was used to determine the fair value of the awards. The TSR performance metric is a market condition. Therefore, fair value of the awards is fixed at the measurement date and is not revised based on actual performance. The number of shares that will ultimately vest will change based on estimates of the Company’s adjusted EPS performance in relation to the preestablished targets. The 2018 target grant currently corresponds to approximately 0.5 million shares, with a grant-date fair value of $7.54 per share.

10. Commitments and Contingencies

In a complaint filed on January 31, 2017 by Mr. Jorge Chacon in the Superior Court for the State of California for the County of Orange, certain subsidiaries of the Company were named as defendants in a representative action alleging violations of California state wage and hour statutes and other labor standards. In a complaint filed on December 8, 2017 by Mr. Robert Jaurigue in the Superior Court for the State of California for the County of Los Angeles, a subsidiary of the Company was named as a defendant in a representative action alleging violations of California state wage and hour statutes and other labor standards. Both lawsuits seek unspecified monetary damages and attorneys’ fees. The case filed by Mr. Jaurigue has been stayed by the court pending resolution of the case filed by Mr. Chacon. The Company is vigorously defending these claims and as of February 3, 2018, has established a reserve based on its best estimate of the outcome of the matters.

The Company is subject to various other claims and contingencies arising out of the normal course of business. Management

believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse

effect on the Company’s results of operations, financial condition, or cash flows.

11. Investment in Equity Interests

In the second quarter of 2016, the Company made a $10.1 million investment in Homage, LLC, a privately held retail company based in Columbus, Ohio. The non-controlling investment in the entity is being accounted for under the equity method. Under the terms of the agreement governing the investment, the Company’s investment was increased by $0.5 million during the second quarter of 2017 as the result of an accrual of a non-cash preferred yield. The total $10.6 million investment is included in other assets on the unaudited Consolidated Balance Sheets.

12. Restructuring Costs

In April of 2017, Express made the decision to close all 17 of its retail stores in Canada and discontinue all operations through its Canadian subsidiary, Express Fashion Apparel Canada Inc. (“Express Canada”). In connection with the plan to close all of its Canadian stores, on May 4, 2017, certain of Express, Inc.’s Canadian subsidiaries filed an application with the Ontario Superior Court of Justice (Commercial List) in Toronto (the “Court”) seeking protection for Express, Inc.’s Canadian subsidiaries under the Companies’ Creditors Arrangement Act in Canada (the “Filing”) and the appointment of a monitor to

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oversee the liquidation and wind-down process. Express Canada began conducting store closing liquidation sales in the middle of May and closed all of its Canadian stores in June of 2017. On September 27, 2017, a Joint Plan of Compromise and Arrangement (the “Plan”) which sets forth the amounts to be distributed to creditors and others in connection with the liquidation of Express Canada was sanctioned and approved by the Court and the creditors of Express Canada. The Plan is in the process of being implemented and substantially all of the creditor distributions under the Plan have been made.

Asset Impairment

As a result of the decision to close the Canadian stores, Express determined that it was more likely than not that the fixed assets associated with the Canadian stores would be sold or otherwise disposed of prior to the end of their useful lives and therefore evaluated these assets for impairment in the first quarter of 2017. As a result of this evaluation, the Company recognized an impairment charge of $5.5 million on the fixed assets in the first quarter of 2017, which is included in restructuring costs in the unaudited Consolidated Statements of Income.

Exit Costs

As of May 4, 2017, the date of the Filing, the Company no longer had a controlling interest in the Canadian subsidiaries and therefore it deconsolidated the Canadian operations from the Company’s consolidated financial statements as of such date. In addition to the impairment charges noted above, during the first quarter of 2017 the Company incurred $0.8 million in restructuring costs for professional fees. No restructuring costs were incurred in the first quarter of 2018.

As of May 5, 2018 and February 3, 2018, a $1.2 million lease related accrual remained. The Company does not expect to incur significant additional restructuring costs and expects to make the majority of the remaining cash payments within the next 12 months.

13. Retirement Benefits

The Company previously sponsored a non-qualified deferred compensation plan for certain eligible employees. In the first quarter of 2017, the Company elected to terminate the non-qualified plan effective March 31, 2017. Outstanding participant balances were distributed via lump sum in the first quarter of 2018 in the amount of $25.6 million. The Company had no further liability under the non-qualified plan as of May 5, 2018. The Company continues to sponsor a qualified defined contribution retirement plan for eligible employees.

14. Stockholders’ Equity

On November 28, 2017, the Company’s Board of Directors (“Board”) approved a new share repurchase program that authorized the Company to repurchase up to $150 million of the Company’s outstanding common stock using available cash (the “2017 Repurchase Program”). Under the 2017 Repurchase Program, the Company may repurchase shares on the open market, including through Rule 10b5-1 plans, in privately negotiated transactions, through block purchases, or otherwise in compliance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and amount of stock repurchases will depend on a variety of factors, including business and market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified, or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program. In 2017, the Company repurchased 2.1 million shares of its common stock under the 2017 Repurchase Program for an aggregate amount equal to $17.3 million, including commissions. In the first quarter of 2018, the Company repurchased an additional 2.2 million shares of its common stock under the 2017 Repurchase Program for an aggregate amount equal to $15.6 million, including commissions. Subsequent to May 5, 2018, the Company repurchased an additional 0.7 million shares of its common stock for an aggregate amount of $5.3 million, including commissions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of the Company as of the dates and for the periods presented below. The following discussion and analysis should be read in conjunction with our Annual Report on Form 10-K for the year ended February 3, 2018 and our unaudited Consolidated Financial Statements and the related notes included in Item 1 of this Quarterly Report. This discussion contains forward-looking statements that are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors. See “Forward-Looking Statements.”

Overview

Express is a specialty retailer of women’s and men’s apparel and accessories. We have over 35 years of experience offering a distinct combination of style and quality at an attractive value, targeting women and men between 20 and 30 years old. We offer our customers an assortment of fashionable apparel and accessories to address fashion needs across multiple wearing occasions, including work, casual, jeanswear, and going-out occasions.

Q1 2018 vs. Q1 2017

•

Net sales increased 1% to $479.4 million

•

Comparable sales increased 1%

•

Comparable sales (excluding e-commerce sales) decreased 8%

•

E-commerce sales increased 35% to $132.6 million

•

Gross margin percentage increased 200 basis points, to 29.9%

•

Operating income increased $9.5 million to $2.8 million

•

Net income increased $3.2 million to $0.5 million

•

Diluted earnings per share (EPS) increased to $0.01

The following charts show key performance metrics for the first quarter of 2018 compared to the first quarter of 2017.

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Strategic Objectives

We remain committed to our long-term growth strategy that includes (1) improving profitability through sales growth, margin expansion, and expense leverage, (2) providing an exceptional brand and customer experience, (3) transforming and leveraging our systems and processes, and (4) cultivating a strong Company culture. In furtherance of our strategy, for 2018, we are focused on the following strategic objectives:

Delivering Compelling Product at an Attractive Value. In the first quarter of 2018, we re-launched our Express One Eleven product line which is a key part of our Spring casual knits offering. The One Eleven line features newness and a wide range of fits. In the second quarter of 2018, we will extend our size offering in men’s and women’s merchandise in over 130 of our retail stores. This is in addition to the extended sizing we already offer online. Our wear-to-work merchandise will also be a key priority for us throughout 2018.

Investing in Growing Brand Awareness and Retaining and Acquiring New Customers to the Express Brand. In 2018, we will continue to invest in growing brand awareness and customer engagement through a variety of media and marketing programming, including search, digital, and social marketing. We will also continue to work with fashion influencers and a broad range of social media influencers. We believe that our Express NEXT loyalty program plays an important role in customer retention, engagement, and purchasing behavior. For 2018, we plan to add more services and improve the personalization for NEXT loyalty program members in order to increase customer engagement.

Growing e-Commerce and Expanding Omni-Channel Capabilities. In 2018, we will expand our assortment online and continue to invest in improving the speed, performance, functionality, and personalization across our e-commerce platforms, with a particular focus on mobile. We also plan to expand our ship-from-store capabilities so that the majority of our retail stores can fulfill e-commerce orders which we expect to allow us to better meet customer demand and optimize sales, margins, and inventory productivity. We will also continue to test buy online pick up in store capabilities in 2018 in select stores which allows customers to reserve merchandise online and then purchase and pick-up their reserved items.

Optimizing the Store Fleet and Executing Our Outlet Strategy. We will continue to respond to the rapidly changing retail environment through store closures, conversions of retail stores to outlets, opening new outlet stores, and negotiating favorable store lease terms. We expect to grow our outlet store base over 25% in 2018 through the conversion of 29 retail stores to outlets and the opening of 10 new outlets in 2018. We plan to close 11 retail stores in 2018.

Effectively Manage Our Cost Base. We expect to realize approximately $12 million in cost savings in 2018 through our cost savings initiatives, with the majority benefiting merchandise margin through lower sourcing costs, and remain on track to deliver a total of $44 to $54 million of annualized cost savings over the 2016 to 2019 period.

First quarter 2018 update
Store Productivity In the first quarter of 2018, comparable sales (excluding e-commerce sales) decreased 8%. We believe this decrease was primarily driven by the following: • Decreased traffic at our stores as a result of shifting consumer shopping patterns which are leading to continued traffic challenges in malls; and • A decrease in average dollar sales per transaction.	Store Fleet Optimization As of May 5, 2018, we operated 631 stores, including 146 factory outlet stores. First quarter of 2018 store openings and closures: • Opened 1 new factory outlet store in the U.S. • Closed 5 retail stores in the U.S.
E-Commerce In the first quarter of 2018, our e-commerce sales increased 35% compared to the first quarter of 2017 (33% on a comparable sales basis). We believe the increase was primarily driven by: • The shift in customer shopping patterns towards e-commerce and mobile; • Increased online conversion; and • Omni-channel capabilities delivering incremental sales. E-commerce sales represented 28% of our total net sales in the first quarter of 2018 compared to 21% in the first quarter of 2017.	Other Business Achievements Product • Saw improved performance in our men’s business and improving trends in our women’s business. Customer Experience • Further expanded our omni-channel capabilities, doubling the number of ship-from-store locations and reaching our target a quarter earlier than we anticipated. Brand • Positioned brand for launch of extended sizing in stores in the second quarter of 2018 Other • Repurchased 2.2 million shares for $15.6 million at an average price of $7.11.

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How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. These key measures include net sales, comparable sales, cost of goods sold, buying and occupancy costs, gross profit/gross margin, and selling, general, and administrative expenses. The following table describes and discusses these measures.

Financial Measures	Description	Discussion
Net Sales	Revenue from the sale of merchandise, less returns and discounts, as well as shipping and handling revenue related to e-commerce, revenue from the rental of our LED sign in Times Square, gift card breakage, revenue earned from our private label credit card agreement, and revenue earned from our franchise agreements.	Our business is seasonal, and we have historically realized a higher portion of our net sales in the third and fourth quarters due primarily to the impact of the holiday season. Generally, approximately 45% of our annual net sales occur in the Spring season (first and second quarters) and 55% occur in the Fall season (third and fourth quarters).
Comparable Sales	Comparable sales is a measure of the amount of sales generated in a period relative to the amount of sales generated in the comparable prior year period. Comparable sales for the first quarter of 2018 were calculated using the 13-week period ended May 5, 2018 as compared to the 13-week period ended May 6, 2017. Comparable sales includes: • Sales from stores that were open 12 months or more as of the end of the reporting period, including conversions • E-commerce sales Comparable sales excludes: • Sales from stores where the square footage has changed by more than 20% due to remodel or relocation activity • Sales from stores in a phased remodel where a portion of the store is under construction and therefore not productive selling space • Sales from stores where the store cannot open due to weather damage or other catastrophe	Our business and our comparable sales are subject, at certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter, Thanksgiving, and Christmas, and regional fluctuations for events such as sales tax holidays.
Cost of goods sold, buying and occupancy costs	Includes the following: • Direct cost of purchased merchandise • Inventory shrink and other adjustments • Inbound and outbound freight • Merchandising, design, planning and allocation, and manufacturing/production costs • Occupancy costs related to store operations (such as rent and common area maintenance, utilities, and depreciation on assets) • Logistics costs associated with our e-commerce business	Our cost of goods sold typically increases in higher volume quarters because the direct cost of purchased merchandise is tied to sales. The primary drivers of the costs of individual goods are raw materials, labor in the countries where our merchandise is sourced, and logistics costs associated with transporting our merchandise. Buying and occupancy costs related to stores are largely fixed and do not necessarily increase as volume increases. Changes in the mix of products sold by type of product or by channel may also impact our overall cost of goods sold, buying and occupancy costs.

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Financial Measures	Description	Discussion
Gross Profit/Gross Margin	Gross profit is net sales minus cost of goods sold, buying and occupancy costs. Gross margin measures gross profit as a percentage of net sales.	Gross profit/gross margin is impacted by the price at which we are able to sell our merchandise and the cost of our product. We review our inventory levels on an on-going basis in order to identify slow-moving merchandise and generally use markdowns to clear such merchandise. The timing and level of markdowns are driven primarily by seasonality and customer acceptance of our merchandise and have a direct effect on our gross margin. Any marked down merchandise that is not sold is marked-out-of-stock. We use third-party vendors to dispose of this marked-out-of-stock merchandise.
Selling, General, and Administrative Expenses	Includes operating costs not included in cost of goods sold, buying and occupancy costs such as: • Payroll and other expenses related to operations at our corporate offices • Store expenses other than occupancy costs • Marketing expenses, including production, mailing, print, and digital advertising costs, among other things	With the exception of store payroll, certain marketing expenses, and incentive compensation, selling, general, and administrative expenses generally do not vary proportionally with net sales. As a result, selling, general, and administrative expenses as a percentage of net sales are usually higher in lower volume quarters and lower in higher volume quarters.

23

Results of Operations

The First Quarter of 2018 Compared to the First Quarter of 2017

Net Sales

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
Net sales (in thousands)	$	479,352		$	474,192
Comparable sales percentage change	1		%	(10		)%
Comparable sales percentage change (excluding e-commerce sales)	(8		)%	(17		)%
Gross square footage at end of period (in thousands)	5,387			5,612
Number of:
Stores open at beginning of period	635			656
New retail stores	—			—
New outlet stores	1			5
Retail stores converted to outlets	—			—
Closed stores	(5		)	(9		)
Stores open at end of period	631			652

Net sales increased approximately $5.2 million compared to the first quarter of 2017. The increase was primarily attributable to an increase in comparable sales of 1% in the first quarter of 2018 compared to the first quarter of 2017. The increase in comparable sales resulted primarily from an increase in e-commerce sales. We attribute these increases to the aforementioned shift in consumer shopping patterns, our expanded assortment online and improvements in our online, and mobile customer experience. These increases were partially offset by a decrease in comparable store sales (excluding e-commerce) as a result of decreased traffic at our stores due in part to decreases in mall traffic overall and a decrease in average dollar sales per transacation.

24

Gross Profit

The following table shows cost of goods sold, buying and occupancy costs, gross profit in dollars, and gross margin percentage for the stated periods:

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands, except percentages)
Cost of goods sold, buying and occupancy costs	$	336,190		$	341,911
Gross profit	$	143,162		$	132,281
Gross margin percentage	29.9		%	27.9		%

The 200 basis point increase in gross margin percentage, or gross profit as a percentage of net sales, in the first quarter of 2018 compared to the first quarter of 2017 was comprised of a 90 basis point improvement in merchandise margin and a 110 basis point decrease in buying and occupancy costs as a percentage of net sales. The improvement in merchandise margin was driven by our sourcing-related cost savings initiatives. The decrease in buying and occupancy costs was primarily the result of the exit from Canada in 2017 and lower rent expense due to favorable lease renewals. These were partially offset by increased fulfillment costs as a result of increased e-commerce sales.

Selling, General, and Administrative Expenses

The following table shows selling, general, and administrative expenses in dollars and as a percentage of net sales for the stated periods:

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands, except percentages)
Selling, general, and administrative expenses	$	140,634		$	132,339
Selling, general, and administrative expenses, as a percentage of net sales	29.3		%	27.9		%

The $8.3 millionincrease in selling, general, and administrative expenses in the first quarter of 2018 as compared to the first quarter of 2017 was primarily the result of increased marketing expense due to investments in marketing, technology, and e-commerce initiatives. Moreover, the increase was also partially due to an accrual for incentive compensation and increased payroll due to wage increases.

Restructuring Costs

The following table shows restructuring costs in dollars for the stated periods:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Restructuring costs	$	—	$	6,271

Restructuring costs represent the costs incurred related to the exit of our Canadian business in 2017. These costs included $5.5 million in impairment charges and $0.8 million in professional fees during the thirteen weeks ended April 29, 2017.

25

Income Tax Expense

The following table shows income tax expense in dollars for the stated periods:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Income tax expense	$	2,084	$	(4,847	)

The effective tax rate was 80.1% for the thirteen weeks ended May 5, 2018 compared to 64.5% for the thirteen weeks ended April 29, 2017. The effective tax rate for the thirteen weeks ended May 5, 2018 reflects $1.3 million of discrete tax expense related to a tax shortfall for share-based compensation. The effective tax rate for the thirteen weeks ended April 29, 2017 reflects $5.0 million of discrete tax benefit related to our exit from Canada. This benefit was partially offset by discrete charges of $2.0 million related to a tax shortfall for share-based compensation and $1.2 million for a valuation allowance that was recorded against the deferred tax asset for deferred compensation. The effective tax rate, excluding discrete items, was 28.6% and 39.2% for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

We anticipate that our effective tax rate, excluding discrete items, will be approximately 28% in 2018.

Non-GAAP Financial Measures

The following table presents adjusted operating income/(loss), adjusted net income/(loss) and adjusted diluted earnings per share, each non-GAAP financial measures, and operating income/(loss), net income/(loss), and diluted earnings per share, the most closely related GAAP measures, for the stated periods. Adjusted operating income/(loss), adjusted net income/(loss), and adjusted diluted earnings per share eliminate the impact of the exit of our Canadian business in 2017:

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands, except per share amounts)
Operating Income/(Loss)	$	2,775		$	(6,730	)
Adjusted Operating Income/(Loss)	$	2,775	*	$	(459	)
Net Income/(Loss)	$	517		$	(2,668	)
Adjusted Net Income/(Loss)	$	517	*	$	(3,694	)
Diluted Earnings Per Share	$	0.01		$	(0.03	)
Adjusted Diluted Earnings Per Share	$	0.01	*	$	(0.05	)

*No adjustments were made to operating income, net income, or diluted earnings per share for the thirteen weeks ended May 5, 2018.

We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial measures: adjusted operating income/(loss), adjusted net income/(loss), and adjusted diluted earnings per share. We believe that these non-GAAP measures provide additional useful information to assist stockholders in understanding our financial results and assessing our prospects for future performance. Management believes adjusted operating income/(loss), adjusted net income/(loss), and adjusted diluted earnings per share are important indicators of our business performance because they exclude items that may not be indicative of, or are unrelated to, our underlying operating results, and provide a better baseline for analyzing trends in our business. In addition, adjusted diluted earnings per share is used as a performance measure in our executive compensation program for purposes of determining the number of equity awards that are ultimately earned. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. These adjusted financial measures should not be considered in isolation or as a substitute for reported operating income/(loss), reported net income/(loss), or reported diluted earnings per share. These non-GAAP financial measures reflect an additional way of viewing our operations that, when viewed with our GAAP results and the below reconciliations to the corresponding GAAP financial measures, provide a more complete understanding of our business. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The table below reconciles the non-GAAP financial measures, adjusted operating loss, adjusted net loss, and adjusted diluted

26

earnings per share, with the most directly comparable GAAP financial measures, operating loss, net loss, and diluted earnings per share for the first quarter of 2017.

	Thirteen Weeks Ended April 29, 2017
(in thousands, except per share amounts)	Operating Loss	Net Loss	Diluted Earnings per Share	Weighted Average Diluted Shares Outstanding
Reported GAAP Measure	$(6,730)	$(2,668)	$(0.03)	78,446
Impact of Canadian Exit	6,271	6,271	0.08
Income Tax Benefit - Canadian Exit	—	(7,297)	(0.09)
Adjusted Non-GAAP Measure	$(459)	$(3,694)	$(0.05)

Liquidity and Capital Resources

A summary of cash provided by or used in operating, investing, and financing activities is shown in the following table:

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
(Used in) provided by operating activities	$	(24,779	)	$	951
Used in investing activities	(7,920		)	(14,623		)
Used in financing activities	(19,002		)	(2,251		)
Decrease in cash and cash equivalents	(51,701		)	(16,381		)
Cash and cash equivalents at end of period	$	184,521		$	190,992

Our business relies on cash flows from operations as our primary source of liquidity, with the majority of those cash flows being generated in the fourth quarter of the year. Our primary operating cash needs are for merchandise inventories, payroll, store rent, and marketing. For the thirteen weeks ended May 5, 2018, our cash flows used in operating activities were $24.8 million compared to $1.0 million in cash flows provided by operating activities for the thirteen weeks ended April 29, 2017. The decrease in cash flows from operating activities for the thirteen weeks ended May 5, 2018 was primarily driven by the distribution of $25.6 million related to the termination of our non-qualified supplemental retirement plan.

In addition to cash flows from operations, we have access to additional liquidity, if needed, through borrowings under our Revolving Credit Facility. As of May 5, 2018, we had $246.7 million available for borrowing under our Revolving Credit Facility. Refer to Note 8 of our unaudited Consolidated Financial Statements for additional information on our Revolving Credit Facility.

We also use cash for capital expenditures and financing transactions. For the thirteen weeks ended May 5, 2018, we had capital expenditures of approximately $7.9 million. These relate primarily to store remodels, new outlet stores, and information technology projects to support our strategic business initiatives. We expect capital expenditures for the remainder of 2018 to be approximately $52 million to $57 million, primarily driven by store remodels, new outlet stores, and investments in information technology. These capital expenditures do not include the impact of landlord allowances, which are expected to be approximately $4 million for the remainder of 2018.

On November 28, 2017, the Board approved a new share repurchase program that authorizes us to repurchase up to $150 million of our outstanding common stock using available cash. For the thirteen weeks ended May 5, 2018, we repurchased 2.2 million shares under the share repurchase program for an aggregate amount equal to $15.6 million, including commissions. In addition, subsequent to May 5, 2018, the Company repurchased an additional 0.7 million shares under the share repurchase program for an aggregate amount equal to $5.3 million, including commissions.

Our liquidity position benefits from the fact that we generally collect cash from sales to customers the same day or, in the case of credit or debit card transactions, within three to five days of the related sale, and have up to 75 days to pay certain merchandise vendors and 45 days to pay the majority of our non-merchandise vendors.

We believe that cash generated from future operations and the availability of borrowings under our Revolving Credit Facility will be sufficient to meet working capital requirements and anticipated capital expenditures for at least the next 12 months.

27

Contractual Obligations

Our contractual obligations and other commercial commitments did not change materially between February 3, 2018 and May 5, 2018. For additional information regarding our contractual obligations as of February 3, 2018, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended February 3, 2018.

Critical Accounting Policies

Management has determined that our most critical accounting policies are those related to revenue recognition, merchandise inventory valuation, long-lived asset valuation, claims and contingencies, and income taxes. We continue to monitor our accounting policies to ensure proper application of current rules and regulations. There have been no significant changes to the policies discussed in our Annual Report on Form 10-K for the year ended February 3, 2018.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

Our Revolving Credit Facility bears interest at variable rates, however, we did not borrow any amounts under the Revolving Credit Facility during the thirteen weeks ended May 5, 2018. Changes in interest rates are not expected to have a material impact on our future earnings or cash flows given our limited exposure to such changes.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934) that are designed to provide reasonable assurance that information required to be disclosed in our Securities Exchange Act of 1934 reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures.

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation prior to filing this report of our disclosure controls and procedures. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of May 5, 2018.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) that occurred during the first quarter of 2018 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

Information relating to legal proceedings is set forth in Note 10 to our unaudited Consolidated Financial Statements included in Part I of this Quarterly Report and is incorporated herein by reference.

28

ITEM 1A. RISK FACTORS.

In addition to the other information set forth in this Quarterly Report, careful consideration should be given to the risk factors set forth in “Item 1A. Risk Factors”, of our Annual Report on Form 10-K for the year ended February 3, 2018, any of which could materially affect our business, operations, financial position, stock price, or future results. The risks described herein and in our Annual Report on Form 10-K for the year ended February 3, 2018, are important to an understanding of the statements made in this Quarterly Report, in our other filings with the SEC, and in any other discussion of our business. These risk factors, which contain forward-looking information, should be read in conjunction with “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the unaudited Consolidated Financial Statements and related notes included in this Quarterly Report.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

The following table provides information regarding the purchase of shares of our common stock made by or on behalf of the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934, during each month of the quarterly period ended May 5, 2018:

Month	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased under the Plans or Programs(2)
	(in thousands, except per share amounts)
February 4, 2018 - March 3, 2018	1,130	$	6.90	1,130	$	125,000
March 4, 2018 - April 7, 2018	798	$	7.23	795	$	119,264
April 8, 2018 - May 5, 2018	590	$	7.92	275	$	117,177
Total	2,518			2,200

⁽¹⁾ Includes shares purchased in connection with employee tax withholding obligations under the 2010 Plan.

⁽²⁾ On November 28, 2017, the Board approved a share repurchase program that authorizes the Company to repurchase up to $150 million of the Company’s outstanding common stock using available cash. The Company may repurchase shares on the open market, including through Rule 10b5-1 plans, in privately negotiated transactions, through block purchases, or otherwise in compliance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and amount of stock repurchases will depend on a variety of factors, including business and market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified, or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4.    MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.     OTHER INFORMATION.

None.

29

ITEM 6.    EXHIBITS.

Exhibits. The following exhibits are filed or furnished with this Quarterly Report:

Exhibit Number	Exhibit Description
10.1+	Form of Restricted Stock Unit and Other Cash-Based Award Agreement (incorporated by reference to Exhibit 10.1 to the Form 8-K filed by the Company with the SEC on April 6, 2018.)
31.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
* Filed herewith.
+ Indicates a management contract or compensatory plan or arrangement

30

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date:	June 13, 2018	EXPRESS, INC.
		By:	/s/ Periclis Pericleous
			Periclis Pericleous
			Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer)

31

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, David G. Kornberg, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Express, Inc. for the quarter ended May 5, 2018;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	June 13, 2018	By:	/s/ David G. Kornberg
			David G. Kornberg
			President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Periclis Pericleous, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Express, Inc. for the quarter ended May 5, 2018;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	June 13, 2018	By:	/s/ Periclis Pericleous
			Periclis Pericleous
			Senior Vice President, Chief Financial Officer and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Express, Inc. (the "Company") on Form 10-Q for the quarter ended May 5, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned David G. Kornberg, President and Chief Executive Officer of the Company, and Periclis Pericleous, Senior Vice President, Chief Financial Officer, and Treasurer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of each of our knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries.

Date: June 13, 2018

/s/ David G. Kornberg

David G. Kornberg

President and Chief Executive Officer

/s/ Periclis Pericleous

Periclis Pericleous

Senior Vice President, Chief Financial Officer and Treasurer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

XML

Document and Entity Information - shares	3 Months Ended
	May 05, 2018	Jun. 02, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	EXPRESS, INC.
Entity Central Index Key	0001483510
Current Fiscal Year End Date	--02-02
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	May 05, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Outstanding (in shares)		74,524,088

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018
CURRENT ASSETS:
Cash and cash equivalents	$ 184,521	$ 236,222
Receivables, net	11,248	12,084
Inventories	277,513	260,728
Prepaid minimum rent	29,920	30,779
Other	26,182	24,319
Total current assets	529,384	564,132
PROPERTY AND EQUIPMENT	1,051,508	1,047,447
Less: accumulated depreciation	(657,752)	(642,434)
Property and equipment, net	393,756	405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618	197,618
DEFERRED TAX ASSETS	7,358	7,346
OTHER ASSETS	12,873	12,815
Total assets	1,140,989	1,186,924
CURRENT LIABILITIES:
Accounts payable	125,502	145,589
Deferred revenue	37,811	41,240
Accrued expenses	106,586	110,563
Total current liabilities	269,899	297,392
DEFERRED LEASE CREDITS	134,283	137,618
OTHER LONG-TERM LIABILITIES	102,407	103,600
Total liabilities	506,589	538,610
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY:
Preferred stock – $0.01 par value; 10,000 shares authorized; no shares issued or outstanding	0	0
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	935	926
Additional paid-in capital	202,904	199,099
Retained earnings	704,912	704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(274,351)	(256,106)
Total stockholders’ equity	634,400	648,314
Total liabilities and stockholders’ equity	$ 1,140,989	$ 1,186,924

XML

Consolidated Balance Sheets (Parentheticals) - $ / shares	May 05, 2018	Feb. 03, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	10,000,000	10,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	93,501,000	92,647,000
Common stock, outstanding (in shares)	75,059,000	76,724,000
Treasury stock (in shares)	18,442,000	15,923,000

XML

Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Income Statement [Abstract]
NET SALES	$ 479,352	$ 474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	336,190	341,911
Gross profit	143,162	132,281
OPERATING EXPENSES:
Selling, general, and administrative expenses	140,634	132,339
Restructuring costs	0	6,271
Other operating (income) expense, net	(247)	401
Total operating expenses	140,387	139,011
OPERATING INCOME/(LOSS)	2,775	(6,730)
INTEREST EXPENSE, NET	174	797
OTHER LOSS/(INCOME), NET	0	(12)
INCOME/(LOSS) BEFORE INCOME TAXES	2,601	(7,515)
INCOME TAX EXPENSE/(BENEFIT)	2,084	(4,847)
NET INCOME/(LOSS)	517	(2,668)
OTHER COMPREHENSIVE INCOME:
Foreign currency translation (loss)/gain	0	(369)
Other Comprehensive (Loss) Income	0	(369)
COMPREHENSIVE INCOME/(LOSS)	$ 517	$ (3,037)
EARNINGS PER SHARE:
Basic (usd per share)	$ 0.01	$ (0.03)
Diluted (usd per share)	$ 0.01	$ (0.03)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic (in shares)	75,407	78,446
Diluted (in shares)	76,123	78,446

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$ 517	$ (2,668)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	21,162	22,893
Loss on disposal of property and equipment	231	403
Impairment charge	0	5,512
Share-based compensation	3,814	4,018
Deferred taxes	(12)	2,286
Landlord allowance amortization	(2,973)	(3,126)
Changes in operating assets and liabilities:
Receivables, net	837	(442)
Inventories	(16,785)	(43,772)
Accounts payable, deferred revenue, and accrued expenses	(29,530)	17,424
Other assets and liabilities	(2,040)	(1,577)
Net cash provided by operating activities	(24,779)	951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(7,920)	(14,623)
Net cash used in investing activities	(7,920)	(14,623)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(454)	(414)
Repayments of financing arrangements	(303)	(303)
Repurchase of common stock under share repurchase program	(15,638)	0
Repurchase of common stock for tax withholding obligations	(2,607)	(1,534)
Net cash used in financing activities	(19,002)	(2,251)
EFFECT OF EXCHANGE RATE ON CASH	0	(458)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(51,701)	(16,381)
CASH AND CASH EQUIVALENTS, Beginning of period	236,222	207,373
CASH AND CASH EQUIVALENTS, End of period	$ 184,521	$ 190,992

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Description of Business and Basis of Presentation

3 Months Ended

May 05, 2018

Description of Business and Basis of Presentation [Abstract]

Description of Business and Basis of Presentation

Description of Business and Basis of Presentation

Business Description

Express, Inc., together with its subsidiaries (“Express” or the “Company”), is a specialty retailer of women’s and men’s apparel and accessories, targeting the 20 to 30 year old customer. Express merchandise is sold through retail and factory outlet stores and the Company’s e-commerce website, www.express.com, as well as its mobile app. As of May 5, 2018, Express operated 485 primarily mall-based retail stores in the United States and Puerto Rico as well as 146 factory outlet stores. Additionally, as of May 5, 2018, the Company earned revenue from 16 franchise stores in Latin America. These franchise stores are operated by franchisees pursuant to franchise agreements. Under the franchise agreements, the franchisees operate stand-alone Express stores that sell Express-branded apparel and accessories purchased directly from the Company.

On May 4, 2017, Express announced its intention to exit the Canadian market and Express Fashion Apparel Canada Inc. and one of its wholly-owned subsidiaries filed for protection in Canada under the Companies’ Creditors Arrangement Act (CCAA) with the Ontario Superior Court of Justice in Toronto. As of May 4, 2017, Canadian retail operations were deconsolidated from the Company’s financial statements. Canadian financial results prior to May 4, 2017 are included in the Company’s consolidated financial statements. See Note 12 for additional information.

Fiscal Year

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the calendar year in which the fiscal year commences. References herein to “2018” and “2017” represent the 52-week period ended February 2, 2019 and the 53-week period ended February 3, 2018, respectively. All references herein to “the first quarter of 2018“ and “the first quarter of 2017“ represent the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and therefore do not include all of the information or footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for 2018. Therefore, these statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended February 3, 2018, included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 4, 2018.

Principles of Consolidation

The unaudited Consolidated Financial Statements include the accounts of Express, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Segment Reporting

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that, together, its President and Chief Executive Officer and its Chief Operating Officer are the Chief Operating Decision Maker, and that there is one operating segment. Therefore, the Company reports results as a single segment, which includes the operation of its Express brick-and-mortar retail and outlet stores, e-commerce operations, and franchise operations.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expense during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the date of the unaudited Consolidated Financial Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new information becomes available.

Recently Issued Accounting Pronouncements - Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 in the first quarter of fiscal 2018 under the full retrospective method, which required the adjustment of each prior period presented. The primary impact of ASC 606 relates to the accounting for points earned under the Company’s customer loyalty program, the timing of revenue recognition for e-commerce sales, and the classification on the income statement of funds received and certain costs incurred related to our private label credit card program. Upon the adoption of ASC 606, the Company recognized a cumulative effect of a change in accounting principle through a reduction to retained earnings on January 31, 2016, the first day of fiscal 2016, in the amount of $6.1 million. The impact of the adoption of ASC 606 on previously issued financial statements included in this report are as follows:

CONSOLIDATED BALANCE SHEET(unaudited, in thousands except per share amounts)	February 3, 2018
ASSETS	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CURRENT ASSETS:
Cash and cash equivalents	$	236,222		$	—		$	236,222
Receivables, net	12,084			—			12,084
Inventories	266,271			(5,543		)	260,728
Prepaid minimum rent	30,779			—			30,779
Other	19,780			4,539			24,319
Total current assets	565,136			(1,004		)	564,132
PROPERTY AND EQUIPMENT	1,047,447			—			1,047,447
Less: accumulated depreciation	(642,434		)	—			(642,434		)
Property and equipment, net	405,013			—			405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618			—			197,618
DEFERRED TAX ASSETS	7,025			321			7,346
OTHER ASSETS	12,815			—			12,815
Total assets	$	1,187,607		$	(683	)	$	1,186,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	145,589		$	—		$	145,589
Deferred revenue	28,920			12,320			41,240
Accrued expenses	116,355			(5,792		)	110,563
Total current liabilities	290,864			6,528			297,392
DEFERRED LEASE CREDITS	137,618			—			137,618
OTHER LONG-TERM LIABILITIES	105,125			(1,525		)	103,600
Total liabilities	533,607			5,003			538,610
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	926			—			926
Additional paid-in capital	199,099			—			199,099
Accumulated other comprehensive loss	—			—			—
Retained earnings	710,081			(5,686		)	704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(256,106		)	—			(256,106		)
Total stockholders’ equity	654,000			(5,686		)	648,314
Total liabilities and stockholders’ equity	$	1,187,607		$	(683	)	$	1,186,924

CONSOLIDATED STATEMENTS OF INCOME	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands, except per share amounts)	As Reported			Adjustments for adoption of ASC 606		As Adjusted
NET SALES	$	467,029		$	7,163	$	474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	340,031			1,880		341,911
Gross profit	126,998			5,283		132,281
OPERATING EXPENSES:
Selling, general and administrative expenses	130,072			2,267		132,339
Restructuring costs	6,271			—		6,271
Other operating expense, net	401			—		401
Total operating expenses	136,744			2,267		139,011
OPERATING INCOME	(9,746		)	3,016		(6,730		)
INTEREST EXPENSE, NET	797			—		797
INTEREST INCOME
OTHER INCOME, NET	(12		)	—		(12		)
(LOSS) INCOME BEFORE INCOME TAXES	(10,531		)	3,016		(7,515		)
INCOME TAX (BENEFIT) EXPENSE	(6,000		)	1,153		(4,847		)
NET INCOME (LOSS)	$	(4,531	)	$	1,863	$	(2,668	)
EARNINGS PER SHARE:
Basic	$	(0.06	)	$	0.02	$	(0.03	)
Diluted	$	(0.06	)	$	0.02	$	(0.03	)

CONSOLIDATED STATEMENT OF CASH FLOWS	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands)	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	(4,531	)	$	1,863		$	(2,668	)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	22,893			$	—		22,893
Loss on disposal of property and equipment	403			$	—		403
Impairment charge	5,512			$	—		5,512
Share-based compensation	4,018			$	—		4,018
Deferred taxes	1,133			$	1,153		2,286
Landlord allowance amortization	(3,126		)	$	—		(3,126		)
Changes in operating assets and liabilities:
Receivables, net	(442		)	$	—		(442		)
Inventories	(46,220		)	$	2,448		(43,772		)
Accounts payable, deferred revenue, and accrued expenses	20,635			$	(3,211	)	17,424
Other assets and liabilities	676			$	(2,253	)	(1,577		)
Net cash provided by operating activities	951			—			951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(14,623		)	$	—		(14,623		)
Net cash used in investing activities	(14,623		)	—			(14,623		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(414		)	$	—		(414		)
Repayments of financing arrangements	(303		)	$	—		(303		)
Repurchase of common stock for tax withholding obligations	(1,534		)	$	—		(1,534		)
Net cash used in financing activities	(2,251		)	—			(2,251		)
EFFECT OF EXCHANGE RATE ON CASH	(458		)	$	—		(458		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(16,381		)	—			(16,381		)
CASH AND CASH EQUIVALENTS, Beginning of period	207,373			$	—		207,373
CASH AND CASH EQUIVALENTS, End of period	$	190,992		$	—		$	190,992

Recently Issued Accounting Pronouncements - Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. Under ASU 2016-02, a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on its balance sheet. The new standard is effective for annual and interim periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method with early adoption permitted. The Company continues to evaluate the impact that adopting ASU 2016-02 will have on its consolidated financial statements, but the most significant impact will be to increase assets and liabilities on the consolidated balance sheet by the present value of the Company’s leasing obligations, which are primarily related to store leases, as well as additional disclosures required.

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Revenue Recognition

3 Months Ended

May 05, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The following is information regarding the Company’s major product categories and sales channels:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Apparel	$	416,482	$	412,975
Accessories and other	48,302		47,277
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Stores	$	332,150	$	361,922
E-commerce	132,634		98,330
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

Other revenue consists primarily of sell-off revenue related to mark-out-of-stock inventory sales to third parties, shipping and handling revenue related to e-commerce activity, revenue earned from our private label credit card agreement, and revenue from franchise agreements.

Revenue related to the Company’s international franchise operations for the thirteen weeks endedMay 5, 2018 and April 29, 2017, respectively, were not material for any period presented and, therefore, are not reported separately from domestic revenue.

Revenue Recognition Policies

Merchandise Sales

The Company recognizes sales for in-store purchases at the point-of-sale. Revenue related to e-commerce transactions is recognized upon shipment based on the fact that control transfers to the customer at that time. The Company has made a policy election to treat shipping and handling as costs to fulfill the contract and as a result any amounts received from customers are included in the transaction price allocated to the performance obligation of providing goods with a corresponding amount accrued within cost of goods sold, buying and occupancy costs in the unaudited Consolidated Statements of Income and Comprehensive Income for amounts paid to applicable carriers. Associate discounts on merchandise purchases are classified as a reduction of net sales. Net sales excludes sales tax collected from customers and remitted to governmental authorities.

Loyalty Program

The Company maintains a customer loyalty program in which customers earn points toward rewards for qualifying purchases and other marketing activities. Upon reaching specified point values, customers are issued a reward, which they may redeem on merchandise purchases at the Company’s stores or on its website. Generally, rewards earned must be redeemed within 60 days from the date of issuance. The Company defers a portion of merchandise sales based on the estimated standalone selling price of the points earned. This deferred revenue is recognized as certificates are redeemed or expire. To calculate this deferral, the Company makes assumptions related to card holder redemption rates based on historical experience. The loyalty liability is included in deferred revenue on the unaudited Consolidated Balance Sheets.

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Beginning balance loyalty deferred revenue	$	14,186	$	15,662
Reduction in revenue/(revenue recognized)	887		(4,142		)
Ending balance loyalty deferred revenue	$	15,073	$	11,520

Sales Returns Reserve

The Company reduces net sales and provides a reserve for projected merchandise returns based on prior experience. Merchandise returns are often resalable merchandise and are refunded by issuing the same payment tender as the original purchase. The sales returns reserve was $14.5 million and $10.6 million as of May 5, 2018 and February 3, 2018, respectively, and is included in accrued expenses on the unaudited Consolidated Balance Sheets. The asset related to projected returned merchandise is included in other assets on the unaudited Consolidated Balance Sheets.

Gift Cards

The Company sells gift cards in its stores, on its e-commerce website, and through third parties. These gift cards do not expire or lose value over periods of inactivity. The Company accounts for gift cards by recognizing a liability at the time a gift card is sold. The gift card liability balance was $22.3 million and $26.7 million, as of May 5, 2018 and February 3, 2018, respectively, and is included in deferred revenue on the Consolidated Balance Sheets. The Company recognizes revenue from gift cards when they are redeemed by the customer. The Company also recognizes income on unredeemed gift cards, referred to as “gift card breakage.” Gift card breakage is recognized proportionately using a time-based attribution method from issuance of the gift card to the time when it can be determined that the likelihood of the gift card being redeemed is remote and that there is no legal obligation to remit the unredeemed gift cards to relevant jurisdictions. The gift card breakage rate is based on historical redemption patterns. Gift card breakage is included in net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning gift card liability	$	26,737		$	27,498
Issuances	8,384			8,228
Redemptions	(11,593		)	(12,046		)
Gift card breakage	(1,191		)	(1,130		)
Ending gift card liability	$	22,337		$	22,550

Private Label Credit Card

The Company has an agreement with Comenity Bank (the “Bank”) to provide customers with private label credit cards (the “Card Agreement”) which was amended on August 28, 2017 to extend the term of the arrangement through December 31, 2024. Each private label credit card bears the logo of the Express brand and can only be used at the Company’s retail store locations and e-commerce channel. The Bank is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts.

Pursuant to the Card Agreement, the Company receives amounts from the Bank during the term based on a percentage of private label credit card sales and is also eligible to receive incentive payments for the achievement of certain performance targets. These funds are recorded as net sales in the Consolidated Statements of Income and Comprehensive Income.

The Company also receives reimbursement funds from the Bank for expenses the Company incurs. These reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card. The reimbursement funds received related to these private label credit cards are recorded as net sales in the unaudited Consolidated Statements of Income and Comprehensive Income.

In connection with the Card Agreement, the Bank agreed to pay the Company a $20.0 million dollar refundable payment which the Company recognized upon receipt as deferred revenue within other long-term liabilities in the unaudited Consolidated Balance Sheets and began to recognize into income on a straight-line basis commencing January of 2018. The remaining deferred revenue balance of $19.9 million will be recognized over the term of the amended Card Agreement within the other revenue component of net sales. In addition, the Company received $7.1 million in non-refundable payments during 2017 which were recognized in the other revenue component of net sales on the unaudited Consolidated Statements of Income with the related expenses classified as cost of goods sold, buying and occupancy.

.

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning balance refundable payment liability	$	19,906		$	—
Recognized in revenue	(719		)	—
Ending balance refundable payment liability	$	19,187		$	—

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Earnings Per Share

3 Months Ended

May 05, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following table provides a reconciliation between basic and diluted weighted-average shares used to calculate basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 5, 2018	April 29, 2017
	(in thousands)
Weighted-average shares - basic	75,407	78,446
Dilutive effect of stock options and restricted stock units	716	—
Weighted-average shares - diluted	76,123	78,446

Equity awards representing 4.0 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen weeks ended May 5, 2018, as the inclusion of these awards would have been anti-dilutive. Equity awards representing 4.4 million shares of common stock were excluded from the computation of diluted earnings per share for the thirteen weeks endedApril 29, 2017, as the inclusion of these awards would have been anti-dilutive.

Additionally, for the thirteen weeks endedMay 5, 2018, approximately 1.5 million shares were excluded from the computation of diluted weighted average shares because the number of shares that will ultimately be issued is contingent on the Company’s performance compared to pre-established performance goals which have not been achieved as of May 5, 2018.

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Fair Value Measurements

3 Months Ended

May 05, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date.

Level 1-Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2-Valuation is based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3-Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Financial Assets

The following table presents the Company’s financial assets, recorded in cash and cash equivalents on the unaudited Consolidated Balance Sheet, measured at fair value on a recurring basis as of May 5, 2018 and February 3, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall.

	May 5, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	157,647	$	—	$	—
	February 3, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	139,920	$	—	$	—
Commercial paper	—		79,908		—
	$	139,920	$	79,908	$	—

The money market funds are valued using quoted market prices in active markets. The commercial paper is valued using other observable inputs for those securities based on information provided by an independent third party entity.

The carrying amounts reflected on the unaudited Consolidated Balance Sheets for the remaining cash and cash equivalents, receivables, prepaid expenses, and payables as of May 5, 2018 and February 3, 2018 approximated their fair values.

Non-Financial Assets

The Company’s non-financial assets, which include fixtures, equipment, improvements, and intangible assets, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur indicating the carrying value of these assets may not be recoverable, or annually in the case of indefinite lived intangibles, an impairment test is required. The impairment test requires the Company to estimate the fair value of the assets and compare this to the carrying value of the assets. If the fair value of the asset is less than the carrying value, then an impairment charge is recognized and the non-financial assets are recorded at fair value. The Company estimates the fair value using a discounted cash flow model. Factors used in the evaluation include, but are not limited to, management’s plans for future operations, recent operating results, and projected cash flows. During the thirteen weeks ended May 5, 2018 the Company did not recognize any impairment charges. For the thirteen weeks ended April 29, 2017, the Company recognized impairment charges of approximately $5.5 million related to its 17 Canadian stores, all of which are now closed and fully impaired. These charges are included in restructuring costs in the unaudited Consolidated Statements of Income. See Note 12 for additional discussion regarding the exit from Canada.

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Intangible Assets

3 Months Ended

May 05, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The following table provides the significant components of intangible assets:

	May 5, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		282		143
	$	198,043	$	282	$	197,761

	February 3, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		270		155
	$	198,043	$	270	$	197,773

The Company’s tradename, Internet domain names, and trademarks have indefinite lives. Licensing arrangements are amortized over a period of ten years and are included in other assets on the unaudited Consolidated Balance Sheets.

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Income Taxes

3 Months Ended

May 05, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes is based on a current estimate of the annual effective tax rate adjusted to reflect the impact of discrete items. The Company’s effective income tax rate may fluctuate from quarter to quarter as a result of a variety of factors, including changes in the Company’s assessment of certain tax contingencies, valuation allowances, changes in tax law, outcomes of administrative audits, the impact of discrete items, and the mix of earnings.

The Company’s effective tax rate was 80.1% and 64.5% for the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively. The effective tax rate for the thirteen weeks ended May 5, 2018 reflects $1.3 million of discrete tax expense related to a tax shortfall for share-based compensation.  The effective tax rate for the thirteen weeks ended April 29, 2017 reflects $5.0 million of discrete tax benefit related to our exit from Canada. This benefit was partially offset by discrete charges of $2.0 million related to a tax shortfall for share-based compensation and $1.2 million for a valuation allowance that was recorded against the deferred tax asset for deferred compensation.

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Lease Financing Obligations

3 Months Ended

May 05, 2018

Leases [Abstract]

Lease Financing Obligations

Lease Financing Obligations

In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved in the construction of structural improvements or takes construction risk prior to commencement of a lease, it is deemed the owner of the project for accounting purposes. Therefore, the Company records an asset in property and equipment on the unaudited Consolidated Balance Sheets, including any capitalized interest costs, and related liabilities in accrued interest and lease financing obligations in other long-term liabilities on the unaudited Consolidated Balance Sheets, for the replacement cost of the Company’s portion of the pre-existing building plus the amount of construction costs incurred by the landlord as of the balance sheet date.

The initial terms of the lease arrangements for which the Company is considered the owner are expected to expire in 2023 and 2029. The net book value of landlord funded construction, replacement cost of pre-existing property, and capitalized interest in property and equipment on the unaudited Consolidated Balance Sheets was $59.3 million and $60.2 million, as of May 5, 2018 and February 3, 2018, respectively. There was also $66.3 million and $66.7 million of lease financing obligations as of May 5, 2018 and February 3, 2018, respectively, in other long-term liabilities on the unaudited Consolidated Balance Sheets.

Rent expense relating to the land is recognized on a straight-line basis over the lease term. The Company does not report rent expense for the portion of the rent payment determined to be related to the buildings which are owned for accounting purposes. Rather, this portion of the rent payment under the lease is recognized as interest expense and a reduction of the lease financing obligations.

In February 2016, the Company amended its lease arrangement with the landlord of the Times Square Flagship store. The amendment provided the landlord with the option to cancel the lease upon sufficient notice through December 31, 2016. The option was never exercised and therefore expired on December 31, 2016. In conjunction with amending the lease, the Company recognized an $11.4 million put option liability that is being amortized through interest expense over the remaining lease term. As of May 5, 2018, the remaining balance related to the put option was $8.1 million of which $7.3 million is included within other long-term liabilities on the Consolidated Balance Sheets.

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Debt

3 Months Ended

May 05, 2018

Debt Disclosure [Abstract]

Debt

Debt

A summary of the Company’s financing activities are as follows:

Revolving Credit Facility

On May 20, 2015, Express Holding, LLC, a wholly-owned subsidiary of the Company (“Express Holding”), and its subsidiaries entered into an Amended and Restated $250.0 million secured Asset-Based Credit Facility (“Revolving Credit Facility”). The expiration date of the facility is May 20, 2020. As of May 5, 2018, there were no borrowings outstanding and approximately $246.7 million was available for borrowing under the Revolving Credit Facility.

The Revolving Credit Facility requires Express Holding and its subsidiaries to maintain a fixed charge coverage ratio of at least 1.0:1.0 if excess availability plus eligible cash collateral is less than 10% of the borrowing base. In addition, the Revolving Credit Facility contains customary covenants and restrictions on Express Holding’s and its subsidiaries’ activities, including, but not limited to, limitations on the incurrence of additional indebtedness, liens, negative pledges, guarantees, investments, loans, asset sales, mergers, acquisitions, prepayment of other debt, distributions, dividends, the repurchase of capital stock, transactions with affiliates, the ability to change the nature of its business or fiscal year, and permitted business activities. All obligations under the Revolving Credit Facility are guaranteed by Express Holding and its domestic subsidiaries (that are not borrowers) and secured by a lien on, among other assets, substantially all working capital assets including cash, accounts receivable, and inventory, of Express Holding and its domestic subsidiaries.

Letters of Credit

The Company may enter into stand-by letters of credit (“stand-by LCs”) on an as-needed basis to secure payment obligations for merchandise purchases and other general and administrative expenses. As of May 5, 2018 and February 3, 2018, outstanding stand-by LCs totaled $3.3 million and $3.3 million, respectively.

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Share-Based Compensation

3 Months Ended

May 05, 2018

Share-based Compensation [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company records the fair value of share-based payments to employees in the unaudited Consolidated Statements of Income as compensation expense, net of forfeitures, over the requisite service period.

Share-Based Compensation Plans

The following summarizes share-based compensation expense:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Restricted stock units	$	3,399	$	3,155
Stock options	333		863
Performance-based restricted stock units	82		—
Total share-based compensation	$	3,814	$	4,018

The stock compensation related income tax benefit recognized by the Company during the thirteen weeks ended May 5, 2018 and April 29, 2017 was $2.2 million and $1.9 million, respectively.

Restricted Stock Units

During the thirteen weeks ended May 5, 2018, the Company granted restricted stock units (“RSUs”) under the 2010 Plan. The fair value of RSUs is determined based on the Company’s closing stock price on the day prior to the grant date in accordance with the 2010 Plan. The RSUs granted in 2018 vest ratably over four years and the expense related to these RSUs will be recognized using the straight-line attribution method over this vesting period.

The Company’s activity with respect to RSUs, including awards with performance conditions granted prior to 2018, for the thirteen weeks ended May 5, 2018 was as follows:

	Number of Shares		Grant Date Weighted Average Fair Value Per Share
	(in thousands, except per share amounts)
Unvested, February 3, 2018	2,902		$	11.06
Granted	1,924		$	6.90
Vested	(854	)	$	14.70
Forfeited	(117	)	$	11.61
Unvested, May 5, 2018	3,855		$	8.99

The total fair value of RSUs that vested during the thirteen weeks ended May 5, 2018 was $12.6 million. As of May 5, 2018, there was approximately $27.7 million of total unrecognized compensation expense related to unvested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.0 years.

Stock Options

The Company’s activity with respect to stock options during the thirteen weeks ended May 5, 2018 was as follows:

	Number of Shares		Grant Date Weighted Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
	(in thousands, except per share amounts and years)
Outstanding, February 3, 2018	2,609		$	16.43
Granted	—		$	—
Exercised	—		$	—
Forfeited or expired	(36	)	$	13.02
Outstanding, May 5, 2018	2,573		$	16.47	5.3	$	14
Expected to vest at May 5, 2018	484		$	12.41	8.5	$	12
Exercisable at May 5, 2018	2,060		$	17.51	4.5	$	—

As of May 5, 2018, there was approximately $2.1 million of total unrecognized compensation expense related to stock options, which is expected to be recognized over a weighted average period of approximately 1.6 years.

Performance-based Restricted Stock Units

In the first quarter of 2018, the Company granted performance shares to a limited number of senior executive-level employees, which entitle these employees to receive a specified number of shares of the Company’s common stock upon vesting. The number of shares earned could range between 0% and 200% of the target amount depending upon performance achieved over the three year vesting period. The performance conditions of the award include adjusted diluted earnings per share (EPS) targets and total shareholder return (TSR) of the Company’s common stock relative to a select group of peer companies. A Monte Carlo valuation model was used to determine the fair value of the awards. The TSR performance metric is a market condition. Therefore, fair value of the awards is fixed at the measurement date and is not revised based on actual performance. The number of shares that will ultimately vest will change based on estimates of the Company’s adjusted EPS performance in relation to the preestablished targets. The 2018 target grant currently corresponds to approximately 0.5 million shares, with a grant-date fair value of $7.54 per share.

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Commitments and Contingencies

3 Months Ended

May 05, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

In a complaint filed on January 31, 2017 by Mr. Jorge Chacon in the Superior Court for the State of California for the County of Orange, certain subsidiaries of the Company were named as defendants in a representative action alleging violations of California state wage and hour statutes and other labor standards. In a complaint filed on December 8, 2017 by Mr. Robert Jaurigue in the Superior Court for the State of California for the County of Los Angeles, a subsidiary of the Company was named as a defendant in a representative action alleging violations of California state wage and hour statutes and other labor standards. Both lawsuits seek unspecified monetary damages and attorneys’ fees. The case filed by Mr. Jaurigue has been stayed by the court pending resolution of the case filed by Mr. Chacon. The Company is vigorously defending these claims and as of February 3, 2018, has established a reserve based on its best estimate of the outcome of the matters.

The Company is subject to various other claims and contingencies arising out of the normal course of business. Management

believes that the ultimate liability arising from such claims and contingencies, if any, is not likely to have a material adverse

effect on the Company’s results of operations, financial condition, or cash flows.

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Investment in Equity Interests

3 Months Ended

May 05, 2018

Equity Method Investments and Joint Ventures [Abstract]

Investment in Equity Interests

Investment in Equity Interests

In the second quarter of 2016, the Company made a $10.1 million investment in Homage, LLC, a privately held retail company based in Columbus, Ohio. The non-controlling investment in the entity is being accounted for under the equity method. Under the terms of the agreement governing the investment, the Company’s investment was increased by $0.5 million during the second quarter of 2017 as the result of an accrual of a non-cash preferred yield. The total $10.6 million investment is included in other assets on the unaudited Consolidated Balance Sheets.

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Restructuring Costs

3 Months Ended

May 05, 2018

Restructuring and Related Activities [Abstract]

Restructuring Costs

Restructuring Costs

In April of 2017, Express made the decision to close all 17 of its retail stores in Canada and discontinue all operations through its Canadian subsidiary, Express Fashion Apparel Canada Inc. (“Express Canada”). In connection with the plan to close all of its Canadian stores, on May 4, 2017, certain of Express, Inc.’s Canadian subsidiaries filed an application with the Ontario Superior Court of Justice (Commercial List) in Toronto (the “Court”) seeking protection for Express, Inc.’s Canadian subsidiaries under the Companies’ Creditors Arrangement Act in Canada (the “Filing”) and the appointment of a monitor to oversee the liquidation and wind-down process. Express Canada began conducting store closing liquidation sales in the middle of May and closed all of its Canadian stores in June of 2017. On September 27, 2017, a Joint Plan of Compromise and Arrangement (the “Plan”) which sets forth the amounts to be distributed to creditors and others in connection with the liquidation of Express Canada was sanctioned and approved by the Court and the creditors of Express Canada. The Plan is in the process of being implemented and substantially all of the creditor distributions under the Plan have been made.

Asset Impairment

As a result of the decision to close the Canadian stores, Express determined that it was more likely than not that the fixed assets associated with the Canadian stores would be sold or otherwise disposed of prior to the end of their useful lives and therefore evaluated these assets for impairment in the first quarter of 2017. As a result of this evaluation, the Company recognized an impairment charge of $5.5 million on the fixed assets in the first quarter of 2017, which is included in restructuring costs in the unaudited Consolidated Statements of Income.

Exit Costs

As of May 4, 2017, the date of the Filing, the Company no longer had a controlling interest in the Canadian subsidiaries and therefore it deconsolidated the Canadian operations from the Company’s consolidated financial statements as of such date. In addition to the impairment charges noted above, during the first quarter of 2017 the Company incurred $0.8 million in restructuring costs for professional fees. No restructuring costs were incurred in the first quarter of 2018.

As of May 5, 2018 and February 3, 2018, a $1.2 million lease related accrual remained. The Company does not expect to incur significant additional restructuring costs and expects to make the majority of the remaining cash payments within the next 12 months.

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Retirement Benefits

3 Months Ended

May 05, 2018

Postemployment Benefits [Abstract]

Retirement Benefits

Retirement Benefits

The Company previously sponsored a non-qualified deferred compensation plan for certain eligible employees. In the first quarter of 2017, the Company elected to terminate the non-qualified plan effective March 31, 2017. Outstanding participant balances were distributed via lump sum in the first quarter of 2018 in the amount of $25.6 million. The Company had no further liability under the non-qualified plan as of May 5, 2018. The Company continues to sponsor a qualified defined contribution retirement plan for eligible employees.

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Stockholders' Equity

3 Months Ended

May 05, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

On November 28, 2017, the Company’s Board of Directors (“Board”) approved a new share repurchase program that authorized the Company to repurchase up to $150 million of the Company’s outstanding common stock using available cash (the “2017 Repurchase Program”). Under the 2017 Repurchase Program, the Company may repurchase shares on the open market, including through Rule 10b5-1 plans, in privately negotiated transactions, through block purchases, or otherwise in compliance with applicable laws, including Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and amount of stock repurchases will depend on a variety of factors, including business and market conditions as well as corporate and regulatory considerations. The share repurchase program may be suspended, modified, or discontinued at any time and the Company has no obligation to repurchase any amount of its common stock under the program. In 2017, the Company repurchased 2.1 million shares of its common stock under the 2017 Repurchase Program for an aggregate amount equal to $17.3 million, including commissions. In the first quarter of 2018, the Company repurchased an additional 2.2 million shares of its common stock under the 2017 Repurchase Program for an aggregate amount equal to $15.6 million, including commissions. Subsequent to May 5, 2018, the Company repurchased an additional 0.7 million shares of its common stock for an aggregate amount of $5.3 million, including commissions.

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Description of Business and Basis of Presentation (Policies)

3 Months Ended

May 05, 2018

Description of Business and Basis of Presentation [Abstract]

Fiscal Year

Fiscal Year

The Company’s fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the calendar year in which the fiscal year commences. References herein to “2018” and “2017” represent the 52-week period ended February 2, 2019 and the 53-week period ended February 3, 2018, respectively. All references herein to “the first quarter of 2018“ and “the first quarter of 2017“ represent the thirteen weeks ended May 5, 2018 and April 29, 2017, respectively.

Basis of Presentation

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and therefore do not include all of the information or footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments (which are of a normal recurring nature) necessary to state fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for 2018. Therefore, these statements should be read in conjunction with the Consolidated Financial Statements and Notes thereto for the year ended February 3, 2018, included in the Company’s Annual Report on Form 10-K, filed with the SEC on April 4, 2018.

Principles of Consolidation

Principles of Consolidation

The unaudited Consolidated Financial Statements include the accounts of Express, Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Segment Reporting

Segment Reporting

The Company defines an operating segment on the same basis that it uses to evaluate performance internally. The Company has determined that, together, its President and Chief Executive Officer and its Chief Operating Officer are the Chief Operating Decision Maker, and that there is one operating segment. Therefore, the Company reports results as a single segment, which includes the operation of its Express brick-and-mortar retail and outlet stores, e-commerce operations, and franchise operations.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited Consolidated Financial Statements and the reported amounts of revenue and expense during the reporting period, as well as the related disclosure of contingent assets and liabilities as of the date of the unaudited Consolidated Financial Statements. Actual results may differ from those estimates. The Company revises its estimates and assumptions as new information becomes available.

Recently Issued Accounting Pronouncements Adopted/Not Yet Adopted

Recently Issued Accounting Pronouncements - Not Yet Adopted

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” ASU 2016-02 requires entities to recognize lease assets and lease liabilities on the balance sheet and to disclose key information about leasing arrangements. Under ASU 2016-02, a lessee should recognize a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term on its balance sheet. The new standard is effective for annual and interim periods beginning after December 15, 2018. ASU 2016-02 mandates a modified retrospective transition method with early adoption permitted. The Company continues to evaluate the impact that adopting ASU 2016-02 will have on its consolidated financial statements, but the most significant impact will be to increase assets and liabilities on the consolidated balance sheet by the present value of the Company’s leasing obligations, which are primarily related to store leases, as well as additional disclosures required.

Recently Issued Accounting Pronouncements - Adopted

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). ASC 606 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The Company adopted ASC 606 in the first quarter of fiscal 2018 under the full retrospective method, which required the adjustment of each prior period presented. The primary impact of ASC 606 relates to the accounting for points earned under the Company’s customer loyalty program, the timing of revenue recognition for e-commerce sales, and the classification on the income statement of funds received and certain costs incurred related to our private label credit card program.

Fair Value Measurements

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date.

Level 1-Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2-Valuation is based upon quoted prices for similar assets and liabilities in active markets or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3-Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

Lease Financing Obligations

Lease Financing Obligations

In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved in the construction of structural improvements or takes construction risk prior to commencement of a lease, it is deemed the owner of the project for accounting purposes. Therefore, the Company records an asset in property and equipment on the unaudited Consolidated Balance Sheets, including any capitalized interest costs, and related liabilities in accrued interest and lease financing obligations in other long-term liabilities on the unaudited Consolidated Balance Sheets, for the replacement cost of the Company’s portion of the pre-existing building plus the amount of construction costs incurred by the landlord as of the balance sheet date.

Share-Based Compensation

Share-Based Compensation

The Company records the fair value of share-based payments to employees in the unaudited Consolidated Statements of Income as compensation expense, net of forfeitures, over the requisite service period.

Restricted Stock Units

During the thirteen weeks ended May 5, 2018, the Company granted restricted stock units (“RSUs”) under the 2010 Plan. The fair value of RSUs is determined based on the Company’s closing stock price on the day prior to the grant date in accordance with the 2010 Plan. The RSUs granted in 2018 vest ratably over four years and the expense related to these RSUs will be recognized using the straight-line attribution method over this vesting period.

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Description of Business and Basis of Presentation (Tables)

3 Months Ended

May 05, 2018

Description of Business and Basis of Presentation [Abstract]

Schedule of Effect of New Accounting Pronouncements

The impact of the adoption of ASC 606 on previously issued financial statements included in this report are as follows:

CONSOLIDATED BALANCE SHEET(unaudited, in thousands except per share amounts)	February 3, 2018
ASSETS	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CURRENT ASSETS:
Cash and cash equivalents	$	236,222		$	—		$	236,222
Receivables, net	12,084			—			12,084
Inventories	266,271			(5,543		)	260,728
Prepaid minimum rent	30,779			—			30,779
Other	19,780			4,539			24,319
Total current assets	565,136			(1,004		)	564,132
PROPERTY AND EQUIPMENT	1,047,447			—			1,047,447
Less: accumulated depreciation	(642,434		)	—			(642,434		)
Property and equipment, net	405,013			—			405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618			—			197,618
DEFERRED TAX ASSETS	7,025			321			7,346
OTHER ASSETS	12,815			—			12,815
Total assets	$	1,187,607		$	(683	)	$	1,186,924
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	145,589		$	—		$	145,589
Deferred revenue	28,920			12,320			41,240
Accrued expenses	116,355			(5,792		)	110,563
Total current liabilities	290,864			6,528			297,392
DEFERRED LEASE CREDITS	137,618			—			137,618
OTHER LONG-TERM LIABILITIES	105,125			(1,525		)	103,600
Total liabilities	533,607			5,003			538,610
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	926			—			926
Additional paid-in capital	199,099			—			199,099
Accumulated other comprehensive loss	—			—			—
Retained earnings	710,081			(5,686		)	704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(256,106		)	—			(256,106		)
Total stockholders’ equity	654,000			(5,686		)	648,314
Total liabilities and stockholders’ equity	$	1,187,607		$	(683	)	$	1,186,924

CONSOLIDATED STATEMENTS OF INCOME	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands, except per share amounts)	As Reported			Adjustments for adoption of ASC 606		As Adjusted
NET SALES	$	467,029		$	7,163	$	474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	340,031			1,880		341,911
Gross profit	126,998			5,283		132,281
OPERATING EXPENSES:
Selling, general and administrative expenses	130,072			2,267		132,339
Restructuring costs	6,271			—		6,271
Other operating expense, net	401			—		401
Total operating expenses	136,744			2,267		139,011
OPERATING INCOME	(9,746		)	3,016		(6,730		)
INTEREST EXPENSE, NET	797			—		797
INTEREST INCOME
OTHER INCOME, NET	(12		)	—		(12		)
(LOSS) INCOME BEFORE INCOME TAXES	(10,531		)	3,016		(7,515		)
INCOME TAX (BENEFIT) EXPENSE	(6,000		)	1,153		(4,847		)
NET INCOME (LOSS)	$	(4,531	)	$	1,863	$	(2,668	)
EARNINGS PER SHARE:
Basic	$	(0.06	)	$	0.02	$	(0.03	)
Diluted	$	(0.06	)	$	0.02	$	(0.03	)

CONSOLIDATED STATEMENT OF CASH FLOWS	Thirteen Weeks Ended April 29, 2017
(unaudited, in thousands)	As Reported			Adjustments for adoption of ASC 606			As Adjusted
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$	(4,531	)	$	1,863		$	(2,668	)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	22,893			$	—		22,893
Loss on disposal of property and equipment	403			$	—		403
Impairment charge	5,512			$	—		5,512
Share-based compensation	4,018			$	—		4,018
Deferred taxes	1,133			$	1,153		2,286
Landlord allowance amortization	(3,126		)	$	—		(3,126		)
Changes in operating assets and liabilities:
Receivables, net	(442		)	$	—		(442		)
Inventories	(46,220		)	$	2,448		(43,772		)
Accounts payable, deferred revenue, and accrued expenses	20,635			$	(3,211	)	17,424
Other assets and liabilities	676			$	(2,253	)	(1,577		)
Net cash provided by operating activities	951			—			951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(14,623		)	$	—		(14,623		)
Net cash used in investing activities	(14,623		)	—			(14,623		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(414		)	$	—		(414		)
Repayments of financing arrangements	(303		)	$	—		(303		)
Repurchase of common stock for tax withholding obligations	(1,534		)	$	—		(1,534		)
Net cash used in financing activities	(2,251		)	—			(2,251		)
EFFECT OF EXCHANGE RATE ON CASH	(458		)	$	—		(458		)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(16,381		)	—			(16,381		)
CASH AND CASH EQUIVALENTS, Beginning of period	207,373			$	—		207,373
CASH AND CASH EQUIVALENTS, End of period	$	190,992		$	—		$	190,992

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Revenue Recognition (Tables)

3 Months Ended

May 05, 2018

Revenue from Contract with Customer [Abstract]

Schedule of Revenue by Major Product Categories and Sales Channels

The following is information regarding the Company’s major product categories and sales channels:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Apparel	$	416,482	$	412,975
Accessories and other	48,302		47,277
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Stores	$	332,150	$	361,922
E-commerce	132,634		98,330
Other revenue	14,568		13,940
Total net sales	$	479,352	$	474,192

Schedule of Contract with Customer, Liability

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning gift card liability	$	26,737		$	27,498
Issuances	8,384			8,228
Redemptions	(11,593		)	(12,046		)
Gift card breakage	(1,191		)	(1,130		)
Ending gift card liability	$	22,337		$	22,550

The loyalty liability is included in deferred revenue on the unaudited Consolidated Balance Sheets.

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Beginning balance loyalty deferred revenue	$	14,186	$	15,662
Reduction in revenue/(revenue recognized)	887		(4,142		)
Ending balance loyalty deferred revenue	$	15,073	$	11,520

Schedule of Refundable Payment Liability

	Thirteen Weeks Ended
	May 5, 2018			April 29, 2017
	(in thousands)
Beginning balance refundable payment liability	$	19,906		$	—
Recognized in revenue	(719		)	—
Ending balance refundable payment liability	$	19,187		$	—

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Earnings Per Share (Tables)

3 Months Ended

May 05, 2018

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table provides a reconciliation between basic and diluted weighted-average shares used to calculate basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 5, 2018	April 29, 2017
	(in thousands)
Weighted-average shares - basic	75,407	78,446
Dilutive effect of stock options and restricted stock units	716	—
Weighted-average shares - diluted	76,123	78,446

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Fair Value Measurements (Tables)

3 Months Ended

May 05, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents the Company’s financial assets, recorded in cash and cash equivalents on the unaudited Consolidated Balance Sheet, measured at fair value on a recurring basis as of May 5, 2018 and February 3, 2018, aggregated by the level in the fair value hierarchy within which those measurements fall.

	May 5, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	157,647	$	—	$	—
	February 3, 2018
	Level 1		Level 2		Level 3
	(in thousands)
Money market funds	$	139,920	$	—	$	—
Commercial paper	—		79,908		—
	$	139,920	$	79,908	$	—

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Intangible Assets (Tables)

3 Months Ended

May 05, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

The following table provides the significant components of intangible assets:

	May 5, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		282		143
	$	198,043	$	282	$	197,761

	February 3, 2018
	Cost		Accumulated Amortization		Ending Net Balance
	(in thousands)
Tradename/domain names/trademarks	$	197,618	$	—	$	197,618
Licensing arrangements	425		270		155
	$	198,043	$	270	$	197,773

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Share-Based Compensation (Tables)

3 Months Ended

May 05, 2018

Share-based Compensation [Abstract]

Schedule of Shared-based Compensation Expense

The following summarizes share-based compensation expense:

	Thirteen Weeks Ended
	May 5, 2018		April 29, 2017
	(in thousands)
Restricted stock units	$	3,399	$	3,155
Stock options	333		863
Performance-based restricted stock units	82		—
Total share-based compensation	$	3,814	$	4,018

Schedule of Activity related to Stock Options

The Company’s activity with respect to stock options during the thirteen weeks ended May 5, 2018 was as follows:

	Number of Shares		Grant Date Weighted Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value
	(in thousands, except per share amounts and years)
Outstanding, February 3, 2018	2,609		$	16.43
Granted	—		$	—
Exercised	—		$	—
Forfeited or expired	(36	)	$	13.02
Outstanding, May 5, 2018	2,573		$	16.47	5.3	$	14
Expected to vest at May 5, 2018	484		$	12.41	8.5	$	12
Exercisable at May 5, 2018	2,060		$	17.51	4.5	$	—

Schedule Activity related to Restricted Stock Units, Including Awards with Performance Conditions

The Company’s activity with respect to RSUs, including awards with performance conditions granted prior to 2018, for the thirteen weeks ended May 5, 2018 was as follows:

	Number of Shares		Grant Date Weighted Average Fair Value Per Share
	(in thousands, except per share amounts)
Unvested, February 3, 2018	2,902		$	11.06
Granted	1,924		$	6.90
Vested	(854	)	$	14.70
Forfeited	(117	)	$	11.61
Unvested, May 5, 2018	3,855		$	8.99

XML

Description of Business and Basis of Presentation (Details) $ in Thousands		3 Months Ended
	May 04, 2017 subsidiaries	May 05, 2018 USD ($) segment stores	Feb. 03, 2018 USD ($)	Jan. 31, 2016 USD ($)
Description of Business and Basis of Presentation [Line Items]
Number of stores under franchise agreements		16
Number of subsidiaries under the companies creditors arrangement act | subsidiaries	1
Number of operating segments | segment		1
Reduction to retained earnings | $		$ (704,912)	$ (704,395)
Retail [Member]
Description of Business and Basis of Presentation [Line Items]
Number of stores		485
Outlet [Member]
Description of Business and Basis of Presentation [Line Items]
Number of stores		146
Minimum [Member]
Description of Business and Basis of Presentation [Line Items]
Age of target customer		20 years
Maximum [Member]
Description of Business and Basis of Presentation [Line Items]
Age of target customer		30 years
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member]
Description of Business and Basis of Presentation [Line Items]
Reduction to retained earnings | $			$ 5,686	$ 6,100

XML

Description of Business and Basis of Presentation - Impact of ASC 606 on Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	May 05, 2018	Feb. 03, 2018	Apr. 29, 2017	Jan. 28, 2017	Jan. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 184,521	$ 236,222	$ 190,992	$ 207,373
Receivables, net	11,248	12,084
Inventories	277,513	260,728
Prepaid minimum rent	29,920	30,779
Other	26,182	24,319
Total current assets	529,384	564,132
PROPERTY AND EQUIPMENT	1,051,508	1,047,447
Less: accumulated depreciation	(657,752)	(642,434)
Property and equipment, net	393,756	405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS	197,618	197,618
DEFERRED TAX ASSETS	7,358	7,346
OTHER ASSETS	12,873	12,815
Total assets	1,140,989	1,186,924
CURRENT LIABILITIES:
Accounts payable	125,502	145,589
Deferred revenue	37,811	41,240
Accrued expenses	106,586	110,563
Total current liabilities	269,899	297,392
DEFERRED LEASE CREDITS	134,283	137,618
OTHER LONG-TERM LIABILITIES	102,407	103,600
Total liabilities	506,589	538,610
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively	935	926
Additional paid-in capital	202,904	199,099
Accumulated other comprehensive loss		0
Retained earnings	704,912	704,395
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively	(274,351)	(256,106)
Total stockholders’ equity	634,400	648,314
Total liabilities and stockholders’ equity	$ 1,140,989	1,186,924
Scenario, Previously Reported [Member]
CURRENT ASSETS:
Cash and cash equivalents		236,222	190,992	207,373
Receivables, net		12,084
Inventories		266,271
Prepaid minimum rent		30,779
Other		19,780
Total current assets		565,136
PROPERTY AND EQUIPMENT		1,047,447
Less: accumulated depreciation		(642,434)
Property and equipment, net		405,013
TRADENAME/DOMAIN NAMES/TRADEMARKS		197,618
DEFERRED TAX ASSETS		7,025
OTHER ASSETS		12,815
Total assets		1,187,607
CURRENT LIABILITIES:
Accounts payable		145,589
Deferred revenue		28,920
Accrued expenses		116,355
Total current liabilities		290,864
DEFERRED LEASE CREDITS		137,618
OTHER LONG-TERM LIABILITIES		105,125
Total liabilities		533,607
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively		926
Additional paid-in capital		199,099
Accumulated other comprehensive loss		0
Retained earnings		710,081
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively		(256,106)
Total stockholders’ equity		654,000
Total liabilities and stockholders’ equity		1,187,607
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member]
CURRENT ASSETS:
Cash and cash equivalents		0	$ 0	$ 0
Receivables, net		0
Inventories		(5,543)
Prepaid minimum rent		0
Other		4,539
Total current assets		(1,004)
PROPERTY AND EQUIPMENT		0
Less: accumulated depreciation		0
Property and equipment, net		0
TRADENAME/DOMAIN NAMES/TRADEMARKS		0
DEFERRED TAX ASSETS		321
OTHER ASSETS		0
Total assets		(683)
CURRENT LIABILITIES:
Accounts payable		0
Deferred revenue		12,320
Accrued expenses		(5,792)
Total current liabilities		6,528
DEFERRED LEASE CREDITS		0
OTHER LONG-TERM LIABILITIES		(1,525)
Total liabilities		5,003
STOCKHOLDERS’ EQUITY:
Common stock – $0.01 par value; 500,000 shares authorized; 93,501 shares and 92,647 shares issued at May 5, 2018 and February 3, 2018, respectively, and 75,059 shares and 76,724 shares outstanding at May 5, 2018 and February 3, 2018, respectively		0
Additional paid-in capital		0
Accumulated other comprehensive loss		0
Retained earnings		(5,686)			$ (6,100)
Treasury stock – at average cost; 18,442 shares and 15,923 shares at May 5, 2018 and February 3, 2018, respectively		0
Total stockholders’ equity		(5,686)
Total liabilities and stockholders’ equity		$ (683)

XML

Description of Business and Basis of Presentation - Impact of ASC 606 on Consolidated Statements of Income (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
NET SALES	$ 479,352	$ 474,192
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS	336,190	341,911
Gross profit	143,162	132,281
OPERATING EXPENSES:
Selling, general, and administrative expenses	140,634	132,339
Restructuring costs	0	6,271
Other operating expense, net	(247)	401
Total operating expenses	140,387	139,011
OPERATING INCOME	2,775	(6,730)
INTEREST EXPENSE, NET	174	797
OTHER INCOME, NET	0	(12)
(LOSS) INCOME BEFORE INCOME TAXES	2,601	(7,515)
INCOME TAX (BENEFIT) EXPENSE	2,084	(4,847)
NET INCOME/(LOSS)	$ 517	$ (2,668)
EARNINGS PER SHARE:
Basic (usd per share)	$ 0.01	$ (0.03)
Diluted (usd per share)	$ 0.01	$ (0.03)
Scenario, Previously Reported [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
NET SALES		$ 467,029
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS		340,031
Gross profit		126,998
OPERATING EXPENSES:
Selling, general, and administrative expenses		130,072
Restructuring costs		6,271
Other operating expense, net		401
Total operating expenses		136,744
OPERATING INCOME		(9,746)
INTEREST EXPENSE, NET		797
OTHER INCOME, NET		(12)
(LOSS) INCOME BEFORE INCOME TAXES		(10,531)
INCOME TAX (BENEFIT) EXPENSE		(6,000)
NET INCOME/(LOSS)		$ (4,531)
EARNINGS PER SHARE:
Basic (usd per share)		$ (0.06)
Diluted (usd per share)		$ (0.06)
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
NET SALES		$ 7,163
COST OF GOODS SOLD, BUYING AND OCCUPANCY COSTS		1,880
Gross profit		5,283
OPERATING EXPENSES:
Selling, general, and administrative expenses		2,267
Restructuring costs		0
Other operating expense, net		0
Total operating expenses		2,267
OPERATING INCOME		3,016
INTEREST EXPENSE, NET		0
OTHER INCOME, NET		0
(LOSS) INCOME BEFORE INCOME TAXES		3,016
INCOME TAX (BENEFIT) EXPENSE		1,153
NET INCOME/(LOSS)		$ 1,863
EARNINGS PER SHARE:
Basic (usd per share)		$ 0.02
Diluted (usd per share)		$ 0.02

XML

Description of Business and Basis of Presentation - Impact of ASC 606 on Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income	$ 517	$ (2,668)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization	21,162	22,893
Loss on disposal of property and equipment	231	403
Impairment charge	0	5,512
Share-based compensation	3,814	4,018
Deferred taxes	(12)	2,286
Landlord allowance amortization	(2,973)	(3,126)
Changes in operating assets and liabilities:
Receivables, net	837	(442)
Inventories	(16,785)	(43,772)
Accounts payable, deferred revenue, and accrued expenses	(29,530)	17,424
Other assets and liabilities	(2,040)	(1,577)
Net cash provided by operating activities	(24,779)	951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(7,920)	(14,623)
Net cash used in investing activities	(7,920)	(14,623)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations	(454)	(414)
Repayments of financing arrangements	(303)	(303)
Repurchase of common stock for tax withholding obligations	(2,607)	(1,534)
Net cash used in financing activities	(19,002)	(2,251)
EFFECT OF EXCHANGE RATE ON CASH	0	(458)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(51,701)	(16,381)
CASH AND CASH EQUIVALENTS, Beginning of period	236,222	207,373
CASH AND CASH EQUIVALENTS, End of period	184,521	190,992
Scenario, Previously Reported [Member]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income		(4,531)
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization		22,893
Loss on disposal of property and equipment		403
Impairment charge		5,512
Share-based compensation		4,018
Deferred taxes		1,133
Landlord allowance amortization		(3,126)
Changes in operating assets and liabilities:
Receivables, net		(442)
Inventories		(46,220)
Accounts payable, deferred revenue, and accrued expenses		20,635
Other assets and liabilities		676
Net cash provided by operating activities		951
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(14,623)
Net cash used in investing activities		(14,623)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations		(414)
Repayments of financing arrangements		(303)
Repurchase of common stock for tax withholding obligations		(1,534)
Net cash used in financing activities		(2,251)
EFFECT OF EXCHANGE RATE ON CASH		(458)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(16,381)
CASH AND CASH EQUIVALENTS, Beginning of period	236,222	207,373
CASH AND CASH EQUIVALENTS, End of period		190,992
Restatement Adjustment [Member] | Accounting Standards Update 2014-09 [Member]
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss)/income		1,863
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization		0
Loss on disposal of property and equipment		0
Impairment charge		0
Share-based compensation		0
Deferred taxes		1,153
Landlord allowance amortization		0
Changes in operating assets and liabilities:
Receivables, net		0
Inventories		2,448
Accounts payable, deferred revenue, and accrued expenses		(3,211)
Other assets and liabilities		(2,253)
Net cash provided by operating activities		0
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		0
Net cash used in investing activities		0
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on lease financing obligations		0
Repayments of financing arrangements		0
Repurchase of common stock for tax withholding obligations		0
Net cash used in financing activities		0
EFFECT OF EXCHANGE RATE ON CASH		0
NET DECREASE IN CASH AND CASH EQUIVALENTS		0
CASH AND CASH EQUIVALENTS, Beginning of period	$ 0	0
CASH AND CASH EQUIVALENTS, End of period		$ 0

XML

Description of Business and Basis of Presentation - Impact of ASC 606 Consolidated Balance Sheets (Parentheticals) (Details) - $ / shares	May 05, 2018	Feb. 03, 2018
Description of Business and Basis of Presentation [Abstract]
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	500,000,000	500,000,000
Common stock, issued (in shares)	93,501,000	92,647,000
Common stock, outstanding (in shares)	75,059,000	76,724,000
Treasury stock (in shares)	18,442,000	15,923,000

XML

Revenue Recognition - Revenue by Major Product Categories and Sales Channels (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Disaggregation of Revenue [Line Items]
Total net sales	$ 479,352	$ 474,192
Apparel [Member]
Disaggregation of Revenue [Line Items]
Total net sales	416,482	412,975
Accessories And Other [Member]
Disaggregation of Revenue [Line Items]
Total net sales	48,302	47,277
Other Revenue [Member]
Disaggregation of Revenue [Line Items]
Total net sales	14,568	13,940
Stores [Member]
Disaggregation of Revenue [Line Items]
Total net sales	332,150	361,922
E-commerce [Member]
Disaggregation of Revenue [Line Items]
Total net sales	$ 132,634	$ 98,330

XML

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	May 05, 2018	Apr. 29, 2017	Feb. 03, 2018	Aug. 28, 2017	Jan. 28, 2017
Revenue from Contract with Customer [Abstract]
Redemption period for rewards earned	60 days
Sales returns reserve	$ 14,500		$ 10,600
Gift card liability	22,337	$ 22,550	26,737		$ 27,498
Deferred Revenue Arrangement [Line Items]
NET SALES	479,352	474,192
Comenity Bank [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue	$ 19,187	$ 0	19,906		$ 0
Credit Card From 2018 [Member] | Comenity Bank [Member]
Deferred Revenue Arrangement [Line Items]
Deferred revenue			19,900	$ 20,000
NET SALES			$ 7,100

XML

Revenue Recognition - Loyalty Deferred Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Contract With Customer, Liability [Roll Forward]
Beginning balance loyalty deferred revenue	$ 14,186	$ 15,662
Reduction in revenue/(revenue recognized)	887	(4,142)
Ending balance loyalty deferred revenue	$ 15,073	$ 11,520

XML

Revenue Recognition - Gift Card Liability (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Gift Card Liability [Roll Forward]
Beginning gift card liability	$ 26,737	$ 27,498
Issuances	8,384	8,228
Redemptions	(11,593)	(12,046)
Gift card breakage	(1,191)	(1,130)
Ending gift card liability	$ 22,337	$ 22,550

XML

Revenue Recognition - Refundable Payment Liability (Details) - Comenity Bank [Member] - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Movement in Deferred Revenue [Roll Forward]
Beginning balance refundable payment liability	$ 19,906	$ 0
Recognized in revenue	(719)	0
Ending balance refundable payment liability	$ 19,187	$ 0

XML

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Earnings Per Share [Abstract]
Weighted-average shares, basic (in shares)	75,407	78,446
Dilutive effect of stock options and restricted stock units (in shares)	716	0
Weighted-average shares, diluted (in shares)	76,123	78,446
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of earnings per share (in shares)	4,000	4,400
Performance Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potentially dilutive securities excluded from computation of earnings per share (in shares)	1,500

XML

Fair Value Measurements (Details) $ in Thousands	3 Months Ended
	May 05, 2018 USD ($)	Apr. 29, 2017 USD ($) stores	Feb. 03, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment charge	$ 0	$ 5,512
Number of stores impaired during the period | stores		17
Recurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			$ 139,920
Recurring [Member] | Level 1 [Member] | Money market funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets	157,647		139,920
Recurring [Member] | Level 1 [Member] | Commercial paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			0
Recurring [Member] | Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			79,908
Recurring [Member] | Level 2 [Member] | Money market funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets	0		0
Recurring [Member] | Level 2 [Member] | Commercial paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			79,908
Recurring [Member] | Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			0
Recurring [Member] | Level 3 [Member] | Money market funds [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets	$ 0		0
Recurring [Member] | Level 3 [Member] | Commercial paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial assets			$ 0

XML

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Feb. 03, 2018
Finite-Lived Intangible Assets [Line Items]
Accumulated Amortization	$ 282	$ 270
Indefinite-lived Intangible Assets [Line Items]
Cost	197,618	197,618
Cost	198,043	198,043
Ending Net Balance	197,761	197,773
Trademarks and Trade Names [Member]
Indefinite-lived Intangible Assets [Line Items]
Cost	197,618	197,618
Licensing arrangements [Member]
Finite-Lived Intangible Assets [Line Items]
Cost	425	425
Accumulated Amortization	282	270
Ending Net Balance	$ 143	$ 155
Finite-lived intangible assets, useful life	10 years

XML

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Income Tax Disclosure [Abstract]
Effective income tax rate	80.10%	64.50%
Discrete tax expense, share-based compensation	$ 1.3	$ 2.0
Discrete tax benefit, exit from Canada		5.0
Valuation allowance		$ 1.2

XML

Lease Financing Obligations (Details) - USD ($) $ in Millions	May 05, 2018	Feb. 03, 2018	Feb. 29, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Landlord funded construction, replacement cost of pre-existing property, and capitalized interest	$ 59.3	$ 60.2
Lease financing obligations	66.3	$ 66.7
Put option	8.1		$ 11.4
Other Noncurrent Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Put option	$ 7.3

XML

Debt - Revolving Credit Facility (Details) - Line of Credit [Member]	3 Months Ended
	May 05, 2018 USD ($)	May 20, 2015 USD ($)
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 250,000,000.0
Amount outstanding	$ 0
Remaining borrowing capacity	$ 246,700,000
Fixed charge ratio, numerator	1.0
Fixed charge ratio, denominator	1.0
Percent of borrowing base in fixed charge coverage ratio restriction	10.00%

XML

Debt - Letters of Credit (Details) - USD ($) $ in Millions	May 05, 2018	Feb. 03, 2018
Letter of Credit [Member] | Stand-by LCs [Member]
Debt Instrument [Line Items]
Letters of credit outstanding	$ 3.3	$ 3.3

XML

Share-Based Compensation - Cost by Award Type (Details) - USD ($) $ in Thousands	3 Months Ended
	May 05, 2018	Apr. 29, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 3,814	$ 4,018
Tax benefit from share-based compensation expense	2,200	1,900
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	3,399	3,155
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	333	863
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 82	$ 0

XML

Share-Based Compensation - Schedule of Restricted Stock Units, Including Awards with Performance Conditions (Details) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended
	May 05, 2018 USD ($) $ / shares shares
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	4 years
Number of Shares
Unvested at beginning of period (in shares) | shares	2,902
Granted (in shares) | shares	1,924
Vested (in shares) | shares	(854)
Forfeited (in shares) | shares	(117)
Unvested at end of period (in shares) | shares	3,855
Grant Date Weighted Average Fair Value Per Share
Grant date weighted average fair value at beginning of period (usd per share) | $ / shares	$ 11.06
Grant date weighted average fair value, granted (usd per share) | $ / shares	6.90
Grant date weighted average fair value, vested (usd per share) | $ / shares	14.70
Grant date weighted average fair value, forfeited (usd per share) | $ / shares	11.61
Grant date weighted average fair value at end of period (usd per share) | $ / shares	$ 8.99
Fair value of options vested | $	$ 12.6
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Number of Shares
Granted (in shares) | shares	500
Grant Date Weighted Average Fair Value Per Share
Grant date weighted average fair value, granted (usd per share) | $ / shares	$ 7.54

XML

Share-Based Compensation - Unrecognized Compensation Expense and Period for Recognition (Details) $ in Millions	3 Months Ended
	May 05, 2018 USD ($)
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	$ 27.7
Period for recognition	2 years
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	$ 2.1
Period for recognition	1 year 7 months 6 days

XML

Share-Based Compensation - Schedule of Stock Options Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	May 05, 2018 USD ($) $ / shares shares
Number of Shares
Stock Options Outstanding at beginning of period (in shares) | shares	2,609
Stock Options Granted (in shares) | shares	0
Stock Options Exercised (in shares) | shares	0
Stock Options Forfeited or expired (in shares) | shares	(36)
Stock Options Outstanding at end of period (in shares) | shares	2,573
Stock Options Expected to Vest at end of period (in shares) | shares	484
Stock Options Exercisable at end of period (in shares) | shares	2,060
Grant Date Weighted Average Exercise Price Per Share
Grant Date Weighted Average Exercise Price of Options Outstanding at beginning of period (usd per share) | $ / shares	$ 16.43
Grant Date Weighted Average Exercise Price of Options Granted (usd per share) | $ / shares	0.00
Grant Date Weighted Average Exercise Price of Options Exercised (usd per share) | $ / shares	0.00
Grant Date Weighted Average Exercise Price of Options Forfeited or expired (usd per share) | $ / shares	13.02
Grant Date Weighted Average Exercise Price of Options Outstanding at end of period (usd per share) | $ / shares	16.47
Grant Date Weighted Average Exercise Price of Options Expected to Vest at end of period (usd per share) | $ / shares	12.41
Grant Date Weighted Average Exercise Price of Options Exercisable at end of period (usd per share) | $ / shares	$ 17.51
Weighted-Average Remaining Contractual Life (in years)
Weighted Average Remaining Contractual Life of Options Outstanding	5 years 3 months 18 days
Weighted Average Remaining Contractual Life of Options Expected to Vest at end of period	8 years 6 months
Weighted Average Remaining Contractual Life of Options Exercisable at end of period	4 years 6 months
Aggregate Intrinsic Value
Aggregate Intrinsic Value of Options Outstanding at end of period | $	$ 14
Aggregate Intrinsic Value of Options Expected to Vest at end of period | $	12
Aggregate Intrinsic Value of Options Exercisable at end of period | $	$ 0

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Share-Based Compensation - Performance-based Restricted Stock Units (Details) - Performance Shares [Member] shares in Millions	3 Months Ended
	May 05, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Granted (in shares) | shares	0.5
Grant date weighted average fair value, granted (usd per share) | $ / shares	$ 7.54
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target percentage of performance-based restricted stock units which can be earned	0.00%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Target percentage of performance-based restricted stock units which can be earned	200.00%

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Investment in Equity Interests - Equity Method Investments (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 29, 2017	May 05, 2018	Jul. 30, 2016
Equity Method Investments and Joint Ventures [Abstract]
Equity method investment		$ 10.6	$ 10.1
Increase in equity method investment during period	$ 0.5

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Restructuring Costs (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 29, 2017 stores	May 05, 2018 USD ($)	Apr. 29, 2017 USD ($)	Feb. 03, 2018 USD ($)
Restructuring and Related Activities [Abstract]
Number of stores closed | stores	17
Impairment charge		$ 0	$ 5,512
Restructuring costs		0	$ 800
Lease accrual		$ 1,200		$ 1,200
Remaining restructuring costs, term		12 months

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Retirement Benefits (Details) $ in Millions	3 Months Ended
	May 05, 2018 USD ($)
Postemployment Benefits [Abstract]
Outstanding participant balances paid	$ 25.6

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Stockholders' Equity (Details) - USD ($) shares in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Jun. 13, 2018	May 05, 2018	Feb. 03, 2018	Nov. 28, 2017
Equity [Abstract]
Stock repurchase program, authorized amount				$ 150,000,000
Subsequent Event [Line Items]
Treasury stock, acquired (in shares)		2.2	2.1
Treasury stock, value, acquired		$ 15,600,000	$ 17,300,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Treasury stock, acquired (in shares)	0.7
Treasury stock, value, acquired	$ 5,300,000