NEW YORK (TheStreet) -- Francesca's Holdings (FRAN) shares are climbing, up 30.7% to $15.11 in trading on Friday on nearly 10 times its normal trading value, after the specialty women's fashion retailer announced that CEO Neill Davis had resigned and that his post would be filled by Michael Barnes.
Barnes, who was formerly the chief executive at Signet Jewlers, was also named chairman and president of the Houston, TX-based company which reported a 30% decline in its second quarterly profit when it last released its financial results.
The 53 year old Barnes will replace the 57 year old Davis, who joined the company in January 2013, immediately ahead of the retailer's scheduled December 10 third quarter earnings results release.
"His ability to set and execute transformational strategic plans, along with his track record of creating value for shareholders, make him the right executive to capitalize fully on Francesca's solid growth platform," said former chairman and new lead director Greg Brenneman of the hire.
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 good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.1%. Since the same quarter one year prior, revenues slightly increased by 8.7%. 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.
- FRAN's debt-to-equity ratio is very low at 0.05 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FRAN has a quick ratio of 1.70, which demonstrates the ability of the company to cover short-term liquidity needs.
- 49.92% is the gross profit margin for FRANCESCAS HOLDINGS CORP which we consider to be strong. Regardless of FRAN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, FRAN's net profit margin of 10.59% compares favorably to the industry average.
- FRANCESCAS HOLDINGS CORP's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, FRANCESCAS HOLDINGS CORP reported lower earnings of $1.02 versus $1.05 in the prior year. For the next year, the market is expecting a contraction of 9.8% in earnings ($0.92 versus $1.02).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 29.5% when compared to the same quarter one year ago, falling from $14.62 million to $10.31 million.
- You can view the full analysis from the report here: FRAN Ratings Report