Upcoming AWS Coverage on Cato Post-Earnings Results

LONDON, UK / ACCESSWIRE / April 3, 2017 / Active Wall St. announces its post-earnings coverage on Francesca's Holdings Corp. (NASDAQ: FRAN). The Company posted its fourth quarter fiscal and fiscal year 2016 financial results on March 21, 2017. The clothing retailer surpassed sales and earnings 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, The Cato Corp. (NYSE: CATO), reported on March 16, 2017, its earnings for the fourth quarter and year ended January 28, 2017. AWS will be initiating a research report on Cato in the coming days.

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

http://www.activewallst.com/register/

Earnings Reviewed

For the quarter ended January 28, 2017, Francesca's net sales increased 9% to $146.3 million from $134.6 million in Q4 FY15. This increase was due to the addition of 55 net new boutiques since the prior year's same period and a 42% increase in ecommerce sales driven by increased website traffic and conversion rate. Comparable sales were flat in the reported quarter compared to the same period last year as the increase in average transaction value offset the decrease in transactions. The Company's revenue numbers came ahead of analysts' consensus of $145.7 million. Francesca's net sales increased 11% to $487.2 million for FY16 from $439.4 million in the prior year.

During Q4 FY16, Francesca's gross profit, as a percent of net sales, decreased to 46.4% from 49.1% in the previous year's same quarter. This unfavorable variance was principally due to the Company's strategic move to take accelerated markdowns in January, which included marking some merchandise out-of-stock at the end of the year, in order to enter fiscal year 2017 with clean inventories.

For Q4 FY16, Francesca's income from operations was $23.6 million, or 16.1% of net sales, compared to $24.2 million, or 18.0% of net sales, in Q4 FY15. Francesca's net income for Q4 FY16 was $14.6 million, or $0.39 diluted earnings per share, compared to $14.7 million, or $0.35 diluted earnings per share, in Q4 FY15. The Company's earning numbers surpassed Wall Street's estimates of $0.37 per share.

Francesca's net income for FY16 totaled $42.0 million, or $1.09 diluted earnings per share, compared to $38.2 million, or $0.91 diluted earnings per share, in the prior year.

Balance Sheet Summary

Francesca's total cash and cash equivalents at the end of the quarter were $53.2 million compared to $56.2 million at the end of the comparable prior year's comparable quarter. During the reported quarter, the Company repurchased 298,000 shares of its common stock at a cost of $5.2 million, bringing the Company's total year-to-date repurchases to 3,804,000 shares at a cost of $53.2 million.

Francesca's ended the quarter with $24.0 million of inventory on hand compared to $31.5 million at the end of the prior year's comparable period. Average ending inventory per boutique decreased by 30% (a 14% decrease on a two-year stack basis) versus the prior year's comparable period principally due to improved inventory management.

Store Update

Francesca's opened five new boutiques and closed three boutiques during the quarter, bringing the total count to 671 at the end of the quarter. During FY16, the Company opened 64 new boutiques and closed nine boutiques compared to 83 new boutiques opened and six boutiques closed in FY15.

Outlook

For the first quarter ending April 29, 2017, Francesca's is forecasting net sales to be in the range of $111 million to $114 million, based on the assumption that comparable sales will be in the low single digit decrease to flat range compared to the prior year's increase of 2%. The Company plans to open approximately 15 new boutiques and close approximately four existing boutiques during the reported quarter. Diluted earnings per share are expected to be in the range of $0.12 to $0.16.

For the fiscal year ending February 03, 2018, Francesca's is projecting net sales to be in the range of $527 million to $543 million. The Company expects to open approximately 60 to 65 boutiques and close approximately 10 to 15 boutiques in FY17. Diluted earnings per share are expected to be in the range of $1.11 to $1.21 compared to the prior year of $1.09. Capital expenditures for fiscal year 2017 are expected to be in the range of $28 million to $33 million.

Stock Performance

At the close of trading session on Friday, March 31, 2017, Francesca's stock price dropped 6.69% to end the day at $15.35. A total volume of 1.09 million shares were exchanged during the session, which was above the 3-month average volume of 880.82 thousand shares. The Company's share price has gained 0.46% in the past six months. The stock currently has a market cap of $571.02 million and is trading at a PE ratio of 13.95.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street