Francesca’s delivered results for the third quarter that were in line with analysts’ estimates, but raised its forecast for the fourth quarter.
The boutique retailer reported that revenues jumped 19.1 percent year-over-year to $103.7 million from $98.9 million, beating the FactSet estimate of $102 million. Earnings per share of 16 cents met expectations.
The increase in net sales was driven by a 4 percent rise in comparable sales, helped by the addition of 81 new stores. Comp sales were up as the average transaction value increased. Each of the merchandise categories posted double-digit sales increases during the quarter, while the strongest categories for growth were apparel and accessories.
Michael W. Barnes, chairman, president and chief executive officer, stated, “We are very pleased to have exceeded our third quarter sales and earnings expectations. The momentum in our business that began in August continued throughout the third quarter. We saw strength across all of our departments and throughout many categories, with apparel and accessories businesses leading the way.”
Based on all that good news, Francesca’s raised fourth-quarter guidance to a range of 31 cents to 33 cents and net sales to be between $127 million and $130 million. For the full fiscal year, net sales are forecast to be in the range of $432 million and $435 million. Diluted earnings per share for the year are expected to be in the range of 86 cents to 88 cents.
Barnes went on to say, “In anticipation of an earlier start of the holiday season, we accelerated inventory receipts into the third quarter compared to last year. We are planning inventory levels at the end of the fourth quarter to be more consistent with historical levels in line with our expectations.”
Francesca’s did see its gross profits drop as the company addressed slow-moving merchandise and remodeled stores. Expenses also climbed as the retailer ramped up personnel to support the increase in boutiques.