Investor Confidence Sink In Francesca’s Holdings Corp (NASDAQ:FRAN)

Posted by Kristi Scott March 27, 2014 0 Comment 792 views

Francesca’s Holdings Corp (NASDAQ:FRAN), the ailing apparel store chain reported its 4th quarter operation results and full year results on 26th March, before markets opened for the day. The market community showed their collective thumbs down to the company’s lower than expect results for the just concluded quarter and its tepid outlook for the current year operations.


The key highlight from the earnings call was the 6 percent increase in sales that the firm posted in its 4Q to reach $92.1 million mark.  The increase in sales volume was ascribed to the firm opening 91 new stores in the past year. But it was offset by a 6 percent dip in comparable/same store sales that it experienced in the same quarter as against the 10 percent incremental increase in 4Q12.

Continued Pressure On Bottom Line

Earnings per share were down to 27 cents for the quarter. Gross profits in context to sales were down 50.6 percent, where as in 4Q12 it had stabilized at 53.4 percent. Profits went down due to company going aggressive with their price discounts and promotional offers during the holiday season in December.

Costs Spiralling Upwards

Expenses went up by 28 percent to reach $27.7 million in 4Q as against the $21.6 million it has registered in 4Q12.  Income from operations for the quarter was $18.9 million, which translates to 20.5 percent of its overall sales, where as in the comparable period, the firm had accumulated $24.7 million in the previous year.

Headwinds Explained

Explaining the slowdown in comparable sales rate, Francesca’s Holdings Corp (NASDAQ:FRAN President, Chief Executive Officer and Director Neill P. Davis has been quoted to have said that, “The headwinds our business experienced as we progressed through January have continued into the first quarter, impacting our ability to clear through seasonal fall and winter products and resulting in the delay of spring season full-price selling”

About Kristi Scott

Kristi Scott joined GDP Insider in 2005 as a Wall Street reporter for the Business and Market section. Kristi covers the stock market, financial markets and personal finance. Her awards have come from the National Federation of Professional Writers, the Ohio Newspaper Association, the Cleveland Press Club, the Society of Professional Journalists and Suburban Newspapers of America. Kristi was named SNA's national Journalist of the Year

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