Express_Presentation UBS Conference

7/31/2019 Express_Presentation UBS Conference

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STYLE AT THE SPEED OF LIFE

UBS Global Consumer ConferenceMarch 2012


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Cautionary Statement Regarding Forward-LookingStatements and Non-GAAP Financial Measures

Forward Looking Statements

Certain statements in this presentation are forward-looking statements made pursuant to the safe harbor provisions of the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements include any statement that does not directly relate to any historicalor current fact and may include, but are not limited to, statements regarding Expresss growth opportunities, strategy, and future plans,including plans for new stores, loyalty program, international expansion and new and expanding categories. Forward-looking statementsare based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees andare subject to risks, uncertainties and changes in circumstances that are diff icult to predict. Many factors could cause actual results todiffer materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending andgeneral economic conditions; (2) our ability to identify and respond to new and changing fashion trends, customer preferences and otherrelated factors; (3) fluctuations in our sales and results of operations on a seasonal basis and due to store events, promotions and a

variety of other factors; (4) increased competition from other retailers; (5) our dependence upon independent third parties to manufactureall of our merchandise; (6) our growth strategy, including our international expansion plan; (7) our dependence on a strong brand image;(8) our dependence upon key executive management; (9) our reliance on third parties to provide us with certain key services for ourbusiness; and (10) our substantial indebtedness and lease obligations. Additional information concerning these and other factors can befound in Express, Inc.'s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the yearended January 29, 2011. We undertake no obligation to publicly update or revise any forward-looking statement as a result of newinformation, future events or otherwise, except as otherwise required by law.

Non-GAAP Financial Measures

This presentation contains Non-GAAP financial measures, including Adjusted EBITDA. Adjusted EBITDA should be consideredsupplemental to and not a substitute for f inancial information prepared in accordance with generally accepted accounting principles(GAAP) included in Express, Inc.s filings with the Securities and Exchange Commission and may differ from similarly titled measuresused by others. Please refer to slide 28 for additional information and a reconciliation of these measures to the most directly comparablefinancial measures calculated in accordance with GAAP.


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SINCE 2007

We have significantly changed the Express business model Assembled a strong leadership team

Elevated our brand positioning

Implemented our Go-to-Market Strategy

Identified and executed four robust growth pillars

3

$86

$177

$137

$230

$309

$363

2006 2007 2008 2009 2010 2011

Adjusted EBITDA*

*Reconciliation provided on page 28

Which has dramatically changed the financial architecture of the business

Rigorous testing process

Data based decision making

Consistent improvement in results


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4

Who We Are

Launched in 1980 as a division of Limited

Brands

Over 30 years of brand history as afashion authority for 20-30 year oldshoppers

Transitioned to a standalone company in2007

One of the largest specialty retail apparelbrands with over $2.0 billion in sales

Distinctive point of view sexy,sophisticated, social

Committed to style and quality at anattractive value

M en's Apparel &

Accessories,

35%

W omen's

Apparel &

Accessories,

65%

Men

s Apparel &

Accessories 36%

Womens Apparel &

Accessories 64%

FY 2011 Sales Breakdown

2011 Financial Highlights

Sales $2.1 Billion

Adjusted EBITDA $363 Million

% Margin 17.5%

Stores 609


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Attractive Market and Customer Demographic

1 Fast growing segment of the population

2 High discretionary spend we believegreater than the average femalespecialty retail shopper

3 Specialty channel continues to increasemarket share

Source: NPD (January 2011); S&P industry reports; BEA, US Census; Wall Street Research.

By Gender By Age By Channel

Specialty Apparel Market is Large

Women

Men

$192B $192B

Mass

Specialty

Other

Dept Store

$43B

18-30

31+


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The Fashion Authority for20-30 Yr Old Shoppers

Casual Jeanswear Going OutWork

Teens

20-30s

Late20s/+30s


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How We Do It


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9

Express Girl

Young. Smart. Bold.Spirited. Flirty. Social.

23 years old

Loves shopping

Reads Vogue,

Cosmo, Glamour,InStyle

Loves music anddancing

In-the-know about

celebrity news andfashion

Confident. Driven. Charming.Stylish. Active. Cool.

Express Guy

27 years old

Embraces life, lovesthe social scene

Reads Maxim, Details,GQ, Rolling Stone

Tech-savvy and up oncultural trends

Loves hanging outwith his friends

Narrow End Point = Broad Appeal


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10

Sophisticated Design, Merchandisingand Sourcing Model

25.3% 26.3%

31.7%

35.6% 36.4%

FY2007 FY2008 FY2009 FY2010 FY2011

Design andMerchandising

Sourcing andProduction

Disciplined and data-driven approachto design and merchandising

Go-to-Market strategy tests ~75% ofproduct before ordering

Customer driven productselection

Nimble / Diversified supply chain

Moving production to lower costgeographies

Taking advantage of countries withDuty Free status

Optimizing Air/Ocean mix

20%

~75%

Pre-2007 Now

% Product Tested

Gross Margin


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Growth Opportunities


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Focused Growth Strategies

ExistingStores

E-Commerce

New

Stores

InternationalExpansion

Untapped potential in both U.S. and Canada(minimal new stores in past 10 years)

Opened 27 new stores in U.S. + Canada in 2011

Planning approximately 30 new stores in 2012

Significant international expansion opportunity

Planning additional new stores in 2012through partnership with Alshaya

Selectively exploring opportunities in LatinAmerica, Asia and Europe

Increasing sales productivity and operating margin

Marketing our brand, regaining historical saleslevels across all categories and addingcomplementary assortments (shoes, fragrance,watches)

Launched July 2008, have experienced rapid

growth Currently at 10% of total sales

Potential growth to 13-15% of sales

Sales per Gross Sq. Ft.

Store Growth

Number of Stores

Productivity Growth

e-commerce Growth

% of Sales

OperatingMargin:

~1% ~13%

$282$355

FY2006 FY2011

5%

8%

10%

FY2009 FY2010 FY2011

576 591 609~695

At IPO FY2010 FY2011 FY2014E


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Growth Initiatives

Improve existing store productivity and

expand margins

Continued margin expansion as we leverageimproved productivity

Regain historical sales volume in existingcategories

Introduction of new categories to driveadd-on sales

No structural reason for lower storeproductivity

Go-to-Market strategy has increased relevanceof in-store offering

Expanding brand awareness by launching highimpact marketing initiatives

Rolling out new loyalty program, ExpressNEXT, in Spring 2012

Industry Sales / GSF (1)

Industry EBITDA Margins (2)

$611

$535$497 $494 $468

$413

$328$355

Aeropo

stale

Abercro

mbie

&Fitch

Banana

Rep

ublic

Ame

rican

Ea

gle

Bebe

Gap

NY

&Co

Express

18%

13% 12%

18%

Guess

Gap

American

Eagle

Express

(1) Bebe and NY & Co. as of latest reported LTM. Aeropostale, Abercrombie & Fitch, Banana Republic,

American Eagle, Gap, Express as of FY2011.(2) Guess as of latest reported LTM. Gap, American Eagle, and Express, as of FY2011. EBITDA

adjusted for non-recurring and one-time items.


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Grow e-commerce Platform

Source: Public filings.(1) Across all brands (e.g., Gap, Old Navy, and Banana Republic for Gap); Gap numbers

are US only.

Performance Relative to Peers Launched Express.com in July 2008;

launched mobile application in Q310 andFacebook store in Q211

2011 growth of ~39% to 10% of total sales

Management expects to see channelgrowth up to 13-15% of sales, in-line with

peers

Core customer is an active online shopper

Mobile commerce playing larger role in20-30 year-old demographic

Recently hired a new SVP of e-commerce

% Total Sales

Peers (FY 2011)

10%

20%

12%13%

11%

URBN AEO ANF GPS

FY 2011


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Expand Our Store Base

Minimal new store openings between 2000-2009 as a result of dual-gender conversionprocess

Identified ~250 additional potential newstore locations

~150 malls and lifestyle centers in

U.S.

~100 top malls in Canada

Plan to open 30 to 40 stores per year overthe next several years 3 to 4% averagesquare footage growth

~2/3 in U.S.

~1/3 in Canada(Opened six Canada stores in2011)

Net Sq Ft Growth: 3% 3% 4% 4% 4%

Existing Stores Store Closures New Stores

573591

609

630

660(5)

(9)

(9)

(5)

(5)

23

27

~30

~35

~40

591

609

~630

~660

~695

2010 2011 2012E 2013E 2014E

# of Stores

New Store Potential


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New Store Format

New store design elevates brand while

showcasing end uses in an easier-to-shopformat

Redesigned layout enhances productpresentation and elevates overall shoppingexperience

Provides more space to optimize growth ofmens and accessory categories

Opened two stores in new format in June inKing of Prussia and Kenwood

Initial June testing results favorable

Plan to open all new and remodeled stores inthe new format beginning in late spring 2012


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International Growth Opportunity

Team devoted to international growthopportunities

Matt Moellering (COO)

Ron Young (SVP International)

Flexible store expansion options

Partnerships (similar toMiddle-East with Alshaya)

Joint Ventures

Owned Stores

Ship to over 60 countries currently

Extended to parts of Asia, SouthAmerica and Europe as ofAugust 2011

Global Store Potential

Current Stores Target Areas


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Historical Financials

Adjusted EBITDA ($ in millions)Net Sales ($ in millions)

Stores: 658 609

SPGSF: $282 $355

GM %: ~28% ~36%

$1,749 $1,796 $1,737 $1,721

$1,906

$2,073

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

$86

$177

$137

$230

$309

$363

FY2006 FY2007 FY2008 FY2009 FY2010 FY2011

4.9%

9.9%

7.9%

13.3%

16.2%

17.5%

Adj.EBITDA

Margin


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Positive Momentum Continues in 2011

Strong top-line momentum continued in 2011

with sales up 9%

Comparable sales up 6% following a10% increase in fiscal year 2010

Gross margin expansion of 80 bps in 2011 (vs.2010) driven by our evolving go-to-market

strategy

Operating income up 36% to $271 million or13.1% of net sales in 2011 compared to 2010

Paid down $169 million of debt in fiscal 2011

Repurchased $49 million of bonds in Q1and Q2

Prepaid $120 million term loan onDecember 6th

2011 Results Comparison

Adjusted EBITDA

$1,906

$2,073

FY2010 FY2011

Net Sales

10%

6%

FY2010 FY2011

Comparable Sales

$137

$230

$309

$363

FY2008 FY2009 FY2010 FY2011Margin: 7.9% 13.3% 16.2% 17.5%


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Why Invest in Express?

Iconic lifestyle brand targeting an attractive customerdemographic

Advantageous go-to-market strategy driving consistentperformance

Significant opportunities to grow sales and margins

Proven and experienced management team


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EBITDA Reconciliation

($ in millions) February 4, July 7, 2007

Year Ended 2007 through Year Ended Year Ended Year Ended Year Ended

February 3, through February 2, January 31, January 30, January 29, January 28,

2007 July 6, 2007 2008 2009 2010 2011 2012

Net income (loss) $17.5 $29.9 ($40.4) ($29.0) $75.3 $127.4 $140.7

Depreciation & amortization 61.9 25.1 48.2 79.1 69.7 65.1 65.3

Interest expense (net) - - 1.8 33.2 52.7 59.5 35.8

Provision for income taxes 6.5 7.2 0.5 0.2 1.2 14.4 94.9

EBITDA $85.9 $62.2 $10.1 $83.5 $198.9 $266.3 $336.7

Non-cash deductions, losses and charges - - 9.8 21.1 12.1 14.6 14.0

Non-recurring expenses - - 86.9 18.7 5.9 2.1 -

Transaction expenses - - 0.8 3.6 1.7 2.6 -

Permitted advisory agreement fees & expenses - - 3.9 4.2 7.2 12.8 -

Non-cash expense related to equity incentives - - 1.2 2.1 2.1 5.3 10.1

Foreign exchange (gains)/losses recorded in other income - - - - - - (0.4)

Other adjustments- -

2.7 4.0 1.9 5.7 3.0

Adjusted EBITDA $85.9 $62.2 $115.3 $137.2 $229.8 $309.3 $363.4

Adjusted EBITDA is a supplemental measure of financial performance that is not required by, or presented in accordance with, GAAP. EBITDA is defined as consolidated net income (loss)before depreciation and amortization, interest expense (net) and amortization of debt issuance costs and discounts and provision for income taxes. Adjusted EBITDA is calculated in accordancewith our existing credit agreements, and is defined as EBITDA adjusted to exclude the items set forth in the table. Adjusted EBITDA is a measure by which our lenders evaluate our covenantcompliance.

Adjusted EBITDA is not a measure of our financial performance or liquidity under GAAP and should not be considered an alternative to net income as a measure of operating performance,cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. Additionally, Adjusted EBITDA is not intended to be ameasure of free cash flow for managements discretionary use, as they do not consider certain cash requirements such as interest payments, tax payments and debt service requirements.Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and cash costs to replace assets beingdepreciated and amortized, and exclude certain non-recurring charges that may recur in the future. Management compensates for these limitations by relying primarily on our GAAP results andby using Adjusted EBITDA only supplementally. We strongly encourage investors and stockholders to review our financial statements and publicly filed reports within the SEC in their entiretyand not rely on any single financial measure.


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UBS Global Consumer ConferenceMarch 2012

Express_Presentation UBS Conference

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