Express (EXPR) narrowly topped expectations on Wednesday with a 5.9% rise in fourth-quarter profits amid heavy promotions, but the apparel maker spooked Wall Street by issuing a negative outlook for the first quarter and full year.

Shareholders punished Express for warning of a “softer start to the year,” sending it plunging more than 13% in premarket trading.

The apparel maker said it earned $63.9 million, or 75 cents a share, last quarter, compared with a profit of $60.4 million, or 68 cents a share, a year earlier. Analysts had called for EPS of 74 cents.

Revenue rose 8.3% to $728.7 million, exceeding the Street’s view of $722 million. Same-store sales increased 1.5%. Gross margins slid to 35.1% from 37.2%.

“We ended the year positively, with the initiatives we implemented in our women's business driving improved results,” CEO Michael Weiss said in a statement, pointing to lower prices, communicating promotions and rebalancing the company’s sweater assortment.

Overshadowing the earnings beat, Express projected first-quarter EPS of 34 cents to 38 cents, which is well below consensus calls from analysts for 46 cents. Same-store sales are seen flat to down low single digits.

For the full year, Express sees EPS of $1.40 to $1.54, compared with far more optimistic estimates from analysts for $1.72. Management expects same-store sales to increase in the low single digits, including e-commerce sales.

Weiss said the guidance “anticipates a softer start to the year” amid “reduced traffic levels and consumer spending” in February. However, he said “spring merchandise has been received favorably by our customers, resulting in an improvement in conversion, which we do consider to be a leading indicator early in the quarter.”

While Express stumbled in February, the Commerce Department said on Wednesday U.S. retail sales actually jumped 1.1% in February from January, the largest gain since September.

Shares of Columbus, Ohio-based Express dove 13.37% to $16.33 in premarket action on Wednesday, threatening to slash their 2013 gain of 25%.

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