|Francesca's Holdings Corporation ( FRAN )|
|Written by Editor|
|Friday, 08 June 2012 09:14|
Francesca's Holdings Corporation Reports Financial Results for the Fiscal First Quarter Ended April 28, 2012
Comparable Boutique Sales Increased 15.5%
Francesca's Holdings Corporation (FRAN) today announced financial results for the fiscal first quarter ended April 28, 2012.
For the fiscal first quarter ended April 28, 2012:
John De Meritt, President and CEO stated: "Our fiscal year 2012 is off to a strong start as we continue to execute on our differentiated business model. We attribute our continued success to our highly effective broad and shallow merchandising strategy that enables a nimble response to changes in customer demand. We are also very pleased with our new boutique performance which proves to be highly successful. Looking ahead, we plan to continue our strong growth by consistently offering our customers great merchandise at an outstanding value, growing our boutique base and investing in the infrastructure needed to support our growth plans."
Balance Sheet highlights as of April 28, 2012:
Cash and cash equivalents totaled $8.2 million.
Inventory was $17.9 million on a boutique base of 327 compared to $13.5 million on a boutique base of 249 for the comparable prior period. Sales growth of 48.6% exceeded inventory growth of 32.5%, reflecting effective inventory management.
Borrowings decreased $10.0 million in the first quarter to $12.0 million as the Company used a portion of its cash flow to reduce its borrowing under its revolving credit facility. Subsequent to the end of the quarter, borrowing was reduced an additional $3.0 million to $9.0 million. At April 28, 2012, $53.0 million was available under our revolving credit facility for future borrowings.
Second Quarter and Fiscal 2012 Outlook
For the second quarter ending July 28, 2012, net sales are expected to be between $69.0 million and $71.0 million, assuming a low-double-digit comparable boutique sales increase and the opening of 29 new boutiques. Earnings per diluted share are expected to be in the range of $0.22 to $0.23, an increase of 69% to 77% over the same prior year period earnings per diluted share of $0.13 per share. Excluding the $1.6 million of non-recurring charges during the second quarter of fiscal year 2011, adjusted diluted earnings per share was $0.15 per share compared to expected diluted earnings per share in the range of $0.22 to $0.23 per share, an increase of 47% - 53% over the prior year. The number of diluted weighted average shares outstanding is expected to be 44.8 million.
For the full fiscal year ending February 2, 2013, net sales are expected to be in the range of $280.0 million to $283.0 million, assuming a high-single-digit comparable boutique sales increase and the opening of 75 new boutiques and an outlet boutique. Earnings per diluted share are expected to be in the range of $0.87 to $0.89, an increase of 67% to 71% over the same prior year period earnings per diluted share of $0.52 per share. Excluding $1.1 million of non-recurring charges during fiscal year 2012 and $4.5 million of non-recurring charges during fiscal year 2011, adjusted diluted earnings per share are expected to be in the range of $0.89 to $0.91 per share, an increase of 53% to 57% over the adjusted diluted earnings per share of $0.58 per share for fiscal year 2011.
Please see the table of this release that refers to reconciliation of GAAP net income and diluted earnings per share to non-GAAP adjusted net income and adjusted diluted earnings per share.
The Company uses the National Retail Federation calendar and fiscal year 2012 includes 53 weeks. We estimate that the additional week will contribute approximately $3.0 million in net sales and $0.02 per diluted share in incremental earnings. This is partially offset by an estimated charge of $0.7 million, or $0.01 per diluted share, associated with the previously announced relocation of the Company's corporate headquarters and distribution facilities. Our full year projections also assume a 40% tax rate and capital expenditures of $20.0 million to $22.0 million.
Conference Call Information
A conference call to discuss first quarter results is scheduled for June 7, 2012, at 4:30 p.m. ET. A live web cast of the conference call will be available in the investor relations section of the Company's website, www.francescascollections.com. In addition, a replay of the call will be available after the call and remain available until July 7, 2012. To access the telephone replay, listeners should dial (877) 870-5176. The access code for the replay is 6969422. A replay of the web cast will also be available shortly after the call and will remain on the website for ninety days.
SEC Regulation G -- Non-GAAP Information
This press release includes non-GAAP adjusted net income and adjusted diluted earnings per share, each a non-GAAP financial measure. We have reconciled these non-GAAP financial measures with the most directly comparable GAAP financial measures both in the text above and the table that refers to such in this release. We believe that these non-GAAP financial measures not only provide our management with comparable financial data for internal financial analysis but also provide meaningful supplemental information to investors. Specifically, these non-GAAP financial measures allow investors to better understand the performance of our business and facilitate a meaningful evaluation of our quarterly and fiscal year 2012 diluted earnings per share and actual results on a comparable basis with our quarterly and fiscal year 2011 results. These non-GAAP measures should be considered a supplement to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP.
Certain statements in this release are "forward-looking statements" made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company's current expectations or beliefs concerning future events and are subject to various risks and uncertainties that may cause actual results to differ materially from those that we expected, including: possible adverse changes in general economic conditions and their impact on consumer confidence and spending; possible inability to predict and respond in a timely manner to changes in consumer demand; possible loss of key management or inability to attract and retain the talent required for our business; possible inability to maintain and enhance our brand; possible inability to successfully implement our growth strategies or manage our growing business; possible inability to successfully open new boutiques as planned; and possible inability to sustain levels of comparable-boutique sales. For a discussion of these and other risks and uncertainties that could cause actual results to differ materially from those contained in our forward-looking statements, please refer to "Risk Factors" in our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 21, 2012. We undertake no obligation to publicly update or revise any forward-looking statement. Financial schedules are attached to this release.
About Francesca's Holdings Corporation
Francesca's Collections is a growing specialty retailer with retail locations designed and merchandised to feel like independently owned, upscale boutiques providing customers a fun and differentiated shopping experience. The merchandise assortment is a diverse and uniquely balanced mix of high-quality, trend-right apparel, jewelry, accessories and gifts at attractive prices. Francesca's Collections appeals to the 18-35 year-old, fashion conscious, female customer, although the Company finds that women of all ages are attracted to the eclectic and sophisticated merchandise selection and boutique setting. Francesca's Collections' boutiques carry a broad selection but limited quantities of individual styles and new merchandise is introduced five days a week.
For additional information on Francesca's, please visit www.francescascollections.com