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Francesca's Holdings Corporation Reports Fiscal 2012 Second Quarter Results, Increased Guidance For The Full Year 2012 And Senior Leadership Transition Plan

Stocks in this article: FRAN

  • Total sales for the second quarter was up 49.1% driven by Comparable boutique sales increase of 20.7%
  • Diluted EPS for the second quarter increased to $0.28, an 87% increase over the prior year adjusted diluted EPS of $0.15
  • Senior leadership transition to take place effective January 2013

HOUSTON, Sept. 4, 2012 (GLOBE NEWSWIRE) -- Francesca's Holdings Corporation (Nasdaq:FRAN) today announced financial results for the fiscal second quarter ended July 28, 2012, as well as a transition plan for the Company's senior leadership.

Second Quarter Summary:

The Company's second quarter results exceeded previously provided guidance on the strength of a 20.7% increase in comparable boutique sales; its thirteenth consecutive quarterly comparable boutique sales increase. Strong customer responses across all merchandise categories, most notable in jewelry, contributed to better than planned sales and product margin.

  • Net sales increased $25.1 million, or 49.1%, compared with the same period in fiscal 2011. Comparable boutique sales increased 20.7% following an increase of 5.4% in the same prior year period.
  • Gross profit as a percentage of net sales increased 205 basis points compared with last year's second quarter. The increase is primarily the result of leveraging occupancy costs.
  • Selling, general and administrative expenses as a percentage of net sales decreased 69 basis points compared with last year's second quarter.
  • Income from operations increased 65.7% to $20.9 million compared to $12.6 million in the same prior year period. As a percentage of net sales, income from operations increased 274 basis points to 27.35% driven by gross margin expansion as well as leverage in selling, general and administrative expenses.
  • Net earnings for the second quarter was $12.7 million or $0.28 per diluted share compared to net earnings for the second quarter of 2011 of $5.5 million, or $0.13 per diluted share. Adjusted net earnings for the second quarter of fiscal 2011 was $6.5 million, or $0.15 per diluted share excluding a $1.6 million pretax ($1.0 million after tax) or $0.02 per diluted share charge for the early extinguishment of debt under the Company's prior secured credit facility.
  • At the end of the second fiscal quarter of 2012, the Company operated 357 boutiques in 44 states compared to 279 boutiques in 41 states at the end of the same prior year period and 283 boutiques at the end of fiscal year 2011.
  • Inventory per boutique was up 11.5% while overall sales productivity per boutique increased by 16.5% in the second quarter.
  • Debt decreased $7.0 million in the second quarter to $5.0 million as the Company used a portion of its cash flow to reduce its borrowing under its revolving credit facility. Subsequent to the end of the second quarter, borrowing was reduced an additional $3.0 million to $2.0 million.

Third Quarter and Fiscal 2012 Outlook

For the third quarter ending October 27, 2012, net sales are expected to be between $70.5 million and $71.5 million assuming a low double digit comparable boutique sales increase and the opening of two additional new boutiques. Earnings per diluted share are expected to be in the range of $0.20 to $0.21 compared to earnings per diluted share in the prior year quarter of $0.11. Excluding $0.7 million pretax ($0.4 million, net of tax) or $0.01 per diluted share for relocation costs of the Company's headquarters and distribution facilities, adjusted earnings per diluted share are expected to be in the range of $0.21 to $0.22 an increase of 50% to 57% over the same prior year period adjusted earnings per diluted share of $0.14 excluding a $2.3 million pretax ($1.4 million, net of tax) or $0.03 per diluted share charge for the acceleration of stock options.

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