Upcoming AWS Coverage on Tailored Brands Post-Earnings Results

LONDON, UK / ACCESSWIRE / December 13, 2016 / Active Wall St. announces its post-earnings coverage on Francesca's Holdings Corp. (NASDAQ: FRAN) as the Company posted its third quarter fiscal 2016 earnings results on December 06, 2016. The clothing retailer posted a 15% increase in sales and surpassed sales and revenue expectations. Register with us now for your free membership at: http://www.activewallst.com/register/.

One of Francesca's Holdings' competitors within the Apparel Stores space, Tailored Brands, Inc. (NYSE: TLRD), reported on December 07, 2016, its consolidated financial results for the fiscal third quarter ended October 29, 2016. AWS will be initiating a research report on Tailored Brands in the coming days.

Today, AWS is promoting its earnings coverage on FRAN; touching on TLRD. Get our free coverage by signing up to:

http://www.activewallst.com/registration-3/?symbol=FRAN

http://www.activewallst.com/registration-3/?symbol=TLRD

Earnings Reviewed

For the three months ended on October 29, 2016, quarter, Francesca's net sales increased 15% to $119.5 million from $103.7 million in the prior year's comparable quarter. The increase was attributed to a 7% increase in comparable sales primarily driven by an increase in the number of transactions both at boutiques and online as well as the addition of 50 net new boutiques since the prior year's same quarter. The company's revenue numbers topped analysts' revenue forecasts of $116.1 million. During Q3 2016, Francesca's opened 18 boutiques and closed one boutique, bringing the total boutique count to 669 at the end of Q3 2016. E-commerce comparable sales increased 47% to $5.7 million driven by increased website traffic and conversion rate.

During Q3 2016, Francesca's gross profit, as a percent of net sales, increased to 48.2% from 46.6% in Q3 2015. This increase was attributed to 40 basis points of higher merchandise margin and 120 basis points of occupancy costs leverage. The increase in merchandise margin was primarily attributed to favorable mix change and lower markdowns compared to the prior year's comparable quarter. During Q3 2016, the company's income from operations was $15.8 million, or 13.2% of net sales, compared to $11.1 million, or 10.7% of net sales, in the prior year's same quarter.

For Q3 2016, Francesca's reported diluted earnings of $0.26 per share, a 63% increase over Q3 2015's earnings of $0.16 per diluted share. The company's diluted earnings per shares were higher than its guidance of $0.16 to $0.19, due to the impact of higher sales and a better-than-expected gross margin rate as well as an approximately $0.03 per share favorable impact related to a shift in timing primarily of marketing and point-of-sale implementation expenses which the Company now expects to incur in Q4 2016. Francesca's earnings numbers also outperformed Wall Street's expectations of $0.18 per share.

Balance Sheet

As of October 29, 2016, Francesca's total cash and cash equivalents stood at $24.7 million compared to $42.0 million at the end of the comparable prior year's same quarter. During Q3 2016, Francesca's repurchased 263,000 shares of its common stock at a cost of $4.2 million, bringing the Company's total year-to-date repurchases to 3,506,000 shares at a cost of $48.0 million.

Francesca's ended Q3 2016 with $42.8 million of inventory on hand compared to $43.9 million at the end of the prior year's comparable period. The company's average ending inventory per boutique decreased by 10% versus the year ago corresponding period.

Outlook

For Q4 2017 ending January 28, 2017, Francesca's is projecting net sales to be in the range of $143 million to $148 million with the assumption that comparable sales will be in the low single digit decrease to low single digit increase range compared to the prior year's increase of 11%. The Company plans to open five new boutiques and close three boutiques during the upcoming quarter. The company expects diluted earnings per share to be in the band of $0.33 to $0.37, including approximately $0.03 of expense due to a timing shift from Q3 2016 to Q4 2016.

For FY16, Francesca's is expecting net sales to be in the range of $484 million to $489 million; assuming a low-single digit increase in comparable sales compared to the prior year's increase of 3%. The Company expects to open 64 boutiques and close nine boutiques in FY16. Diluted earnings per share are now projected to be in the range of $1.03 to $1.07 compared to the previous guidance of $0.96 to $1.03. Capital expenditures for FY16 are anticipated to be in the range of $25.0 million to $28.0 million.

Stock Performance

At the closing bell, on Monday, December 12, 2016, Francesca's Holdings' stock marginally fell 0.09%, ending the trading session at $21.17. A total volume of 1.16 million shares were traded at the end of the day, which was higher than the 3-month average volume of 983.35 thousand shares. In the last month and previous three months, shares of the company have surged 26.01% and 41.23%, respectively. Moreover, the stock rallied 21.60% since the start of the year. Shares of the company have a PE ratio of 19.92.

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SOURCE: Active Wall Street