Express stock continues to climb amid earnings miss, WHP Global partnership

Shares of Express are up amid news of the company's partnership with WHP Global.

Video transcript

JOSH SCHAFER: I've got an earnings story for us today, too, Seana. But it's a little bit different. So we're taking a look at Express. You can see shares there up about 43%. And that's following the company's third quarter earnings report this morning. But what's interesting is the earnings report wasn't good. You can see there, you've got 11% comparable sales down year over year, a $30 million operating profit loss, inventories up 10% again.

But here is going to be the key, Dave. They had an investment come in. They had a partnership. And the partnership comes from WHP Global. And that partnership-- so that's the parent company of Toys R' Us. And they come in and they say, let's buy the stock. And they buy 5 million shares of that stock at about, I think it was about $4.50 that they buy that stock at.

Well, look at where the stock's trading. The stock's trading a little over $1. So when you have someone come in, says, we think it's worth closer to 4.50, and it's only $1.30 stock, I think some people say, well, maybe there's just a lot of upside there.

That doesn't mean it's not a takeover buy. They're not buying it at 4.50. But they're saying it's worth a lot. And I think that that sort of means-- maybe you can see a little bit of incremental value there, right? It certainly is--

DAVE BRIGGS: Sure.

JOSH SCHAFER: It certainly isn't worth $1.30, right? And that's sort of why it's going up. It's funny because the earnings weren't that great.

DAVE BRIGGS: A lot of air has come out of the stock, and to your point, 44% down year to date. And largely, this is follow the troops at chow time. If you want another positive, it's if these recessionary fears are true, you're still going to buy clothes. You're probably going to trade down, and you might end up at Express.