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Francesca's Holdings Corporation (FRAN - Snapshot Report) reported earnings of 33 cents per share for the fourth quarter of fiscal 2012, surpassing the Zacks Consensus Estimate of 30 cents by 10.0%. Earnings of this specialty retailer grew 73.7% year over year on the back of double-digit top-line growth.

Francesca's reported net sales of $86.7 million, beating the Zacks Consensus Estimate of 84 million by 3.2%. Net sales surged 40.6% year over year, driven by solid improvement in comparable boutique sales and opening of 77 new stores. Comparable boutique sales rose 9.2% in the quarter on the back of increased traffic and strong business in clothing and jewelry sections.  

Gross margin increased 92 basis points to 53.4% on the back of strong sales leverage in the quarter. Selling, general and administrative expenses rose 20.8% to $21.6 million in the quarter. However, as a percentage of revenues, selling, general and administrative expenses contracted 408 basis points to 24.9% in the quarter.

Fiscal 2012

Francesca's reported adjusted earnings of $1.06 per share for fiscal 2012, up 82.8% year over year on the back of solid top-line growth.

Francesca's reported net sales of $296.4 million, up 45.2%, driven by solid improvement in comparable boutique sales and opening of new stores. Comparable boutique sales rose 14.9% in the quarter on the back of increased traffic.

Outlook  

Francesca's expects net sales to grow in the range of $79.5 million to $80.5 million in the first quarter of 2013 on the back of expected comparable sales growth of 4% to 5%. Earnings per share are expected to be in the range of 25 cents to 26 cents, up 25.0% to 30.0% from the prior- year quarter.  

For fiscal 2013, the company expects net sales to grow in the range of $365.0 million to $370.0 million on the back of expected comparable sales growth of 4% to 5%. Earnings per share are expected to be in the range of $1.27 to $1.30, up 23.3% to 26.2% from the prior-year quarter.  

On the other hand, another company in the same sector, Nike Inc. (NKE - Analyst Report) recently reported earnings of third quarter of 2013.  Earnings of Nike surpassed the Zacks Consensus Estimate by 9.0% and surged 19.7% year over year in the third quarter of 2013 on the back of 9% year-over-year increase in revenues, improved margins, lower share count and reduced tax rate. However, revenues missed the Zacks Consensus Estimate by 0.7%.  Nike, during the second quarter of fiscal 2013, entered into an agreement to shed certain assets of the Umbro brand to Iconix Brand Group Inc. (ICON - Analyst Report) for $225 million.

Francesca's currently carries a Zacks Rank #3 (Hold).   

Another company in the sector, Skechers USA Inc. (SKX - Analyst Report), carrying a Zacks Rank #1 (Strong Buy), appears impressive.
 

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