Back to top

Analyst Blog

The apparel and accessories retailer Francesca’s Holding Corp (FRAN - Snapshot Report) raised its guidance for the upcoming fourth quarter ending February 2, 2013. The upward revision came on the back of strong sales and margin performance in the holiday season.

The company raised its earnings per share guidance to the range of 29 cents to 30 cents from the previously announced range of 27 cents to 28 cents. Net sales for the fourth quarter are projected to be around $84.5 million to $85.0 million, up 37% to 38% over the comparable prior-year quarter. Net sales were guided up from the range of $82.5 million to $83.5 million announced during the third quarter conference call.

November same-store sales were above expectations despite the negative effects of Hurricane Sandy, and prompted the company to raise its guidance for the upcoming quarter.

The company’s boutiques saw customer traffic during the holiday season. Moreover, its ‘broad and shallow merchandising strategy’ was a big hit.

The Zacks Consensus Estimate for the fourth quarter of 2012 increased by one cent to 29 cents per share in the past 30 days, as 2 out of 5 estimates were raised. The current projection implies an estimated year-over-year growth of 54.7%.

Francesca's reported third-quarter earnings of 24 cents a share, beating the Zacks Consensus Estimate by a couple of cents or 9.1%. Earnings more than doubled from the prior-year quarter earnings of 11 cents. Net sales came in at $72 million, up 44% year over year and beat the Zacks Consensus Estimate of $71 million. Comparable boutique sales improved 16.7%.

Operating income jumped 120.4% to $17.7 million. Operating margin expanded 855 basis points to 24.6%, reflecting selling, general and administrative expense leverage, as well as gross margin improvement of 96 basis points to 52.6%.

The company’s stores are widespread across the U.S. enabling it to reach a large number of customers. It has also increased focus on e-commerce, which is expected to boost revenue in the near future.

Founded in 1999 and headquartered in Houston, Texas, Francesca’s Holdings Corporation operates a chain of retail boutiques under the Francesca’s collections brand in the United States. It is a holding company operating through its subsidiary, Francesca’s Collections Inc.

The company targets female customers and offers a diverse and uniquely balanced mix of high-quality, trendy apparel, jewelry, accessories and gifts at attractive prices. Francesca’s Holdings carries a Zacks Rank #1 (Strong Buy) and competes with Urban Outfitters Inc. (URBN - Analyst Report) carrying a Zacks Rank #3 (Hold) and ANN Inc. (ANN - Snapshot Report) carrying a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%