NEW YORK (TheStreet) -- Shares of Francesca's Holdings Corp.
(FRAN - Get Report) are down 11.7% to $18.45 in trading today.
The drop comes after the holding company reported earnings at the low end of its raised guidance for the fourth quarter. Francesca's raised its fourth quarter guidance in January to 27-29 cents earnings per share (EPS) on revenues of $93-$95 million, from 25-29 cents EPS on $90-$95 million in revenue. The company hit marks of $92.1 million in sales and 27 cents EPS for the quarter.
Company President and CEO Neil P. Davis said, "Sales results for the fourth quarter were below our revised guidance driven by the impact of 370 full and partial daily boutique closings during January due to extreme weather conditions. Performance in regions less affected by extreme weather performed within our updated fourth quarter guidance."
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TheStreet Ratings team rates FRANCESCAS HOLDINGS CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:"We rate FRANCESCAS HOLDINGS CORP (FRAN) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and a generally disappointing performance in the stock itself." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 10.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.33, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, FRAN has a quick ratio of 2.20, which demonstrates the ability of the company to cover short-term liquidity needs.
- FRANCESCAS HOLDINGS CORP's earnings per share declined by 16.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FRANCESCAS HOLDINGS CORP increased its bottom line by earning $1.05 versus $0.52 in the prior year. This year, the market expects an improvement in earnings ($1.06 versus $1.05).
- Net operating cash flow has decreased to $7.33 million or 30.12% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, FRANCESCAS HOLDINGS CORP has marginally lower results.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Specialty Retail industry. The net income has decreased by 19.7% when compared to the same quarter one year ago, dropping from $10.80 million to $8.67 million.
- You can view the full analysis from the report here: FRAN Ratings Report