francesca's Reports First Fiscal Quarter 2013 Financial Results
-
Net sales increased 29% to
$79.0 million
-
Comparable sales increased 2%
-
Adjusted diluted earnings per share increased 24% to
$0.26
FIRST QUARTER SUMMARY
Net sales for the thirteen weeks increased 29% to
Comparable sales, including direct-to-consumer sales, increased 2% on top of a 16% increase in the prior year quarter. Direct-to-consumer achieved record sales with a 97% increase over the prior year quarter driven by increases in traffic, conversion rates, and average transaction values. Comparable sales, excluding direct-to-consumer sales, were flat to the prior year quarter and below the Company's expectations of an increase in the range of 4% to 5%. The decrease was driven by lower than expected transactions as a reflection of the unseasonable weather conditions that persisted throughout the quarter.
Gross profit, as a percentage of net sales, was 52.4% compared to 53.1% in the prior year quarter, resulting from lower merchandise margins due to higher levels of promotions compared to the prior year quarter.
Selling, general and administrative (SG&A) expenses excluding
Adjusted income from operations for the quarter increased 23% to
BALANCE SHEET SUMMARY
Total cash and cash equivalents at quarter end were
Total inventories, excluding reserves, increased 28% over the prior year quarter and was in-line with net sales growth.
SECOND FISCAL QUARTER AND FULL FISCAL YEAR 2013 GUIDANCE
For the second quarter ending
For the full year ending
Conference Call Information
A conference call to discuss first quarter 2013 results is scheduled for
SEC Regulation G — Non-GAAP Information
This press release includes non-GAAP adjusted selling, general and administrative expenses, adjusted income from operations, 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 in the text above. 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 2013 diluted earnings per share and actual results on a comparable basis with our quarterly and fiscal year 2012 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.
Forward-Looking Statements
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. 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
About
francesca's® 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 balanced mix of apparel, jewelry, accessories and gifts. Today francesca's® operates 429 boutiques in 44 states and also serves its customers through francescas.com. For additional information on francesca's®, please visit www.francescas.com.
|
|||||||
Consolidated Statements of Operations | |||||||
Thirteen Weeks Ended | |||||||
May 4, 2013 |
|
Variance | |||||
In USD |
As a % of Net Sales(1) |
In USD |
As a % of Net Sales(1) |
In USD | % |
Basis Points |
|
(In thousands except per share data) | |||||||
Net sales |
|
100.0% |
|
100.0% |
|
29% | 0.0% |
Cost of goods sold and occupancy costs | 37,615 | 47.6% | 28,779 | 46.9% | 8,836 | 31% | 0.7% |
Gross profit | 41,372 | 52.4% | 32,543 | 53.1% | 8,829 | 27% | (0.7)% |
Selling, general and administrative expenses | 23,351 | 29.6% | 17,885 | 29.2% | 5,466 | 31% | 0.4% |
Income from operations | 18,021 | 22.8% | 14,658 | 23.9% | 3,363 | 23% | (1.1)% |
Interest expense | (116) | (0.1)% | (255) | (0.4)% | 139 | (55)% | 0.3% |
Other income | 83 | 0.1% | 37 | 0.1% | 46 | 124% | 0.0% |
Income before income tax expense | 17,988 | 22.8% | 14,440 | 23.5% | 3,548 | 25% | (0.7)% |
Income tax expense | 7,051 | 8.9% | 5,698 | 9.3% | 1,353 | 24% | (0.4)% |
Net income |
|
13.8% |
|
14.3% |
|
25% | (0.5)% |
Diluted earnings (loss) per common share |
|
|
|||||
Weighted average diluted shares outstanding: | 44,880 | 44,702 | |||||
Comparable sales change | 2% | 16% | |||||
(1) Percentage totals in the above table may not equal the sum of the components due to rounding. | |||||||
Consolidated Balance Sheets (In thousands) |
|||
|
|
|
|
ASSETS | |||
Current assets: | |||
Cash and cash equivalents |
|
|
|
Accounts receivable | 7,645 | 2,504 | 6,479 |
Inventories | 23,330 | 19,049 | 17,642 |
Deferred income taxes | 3,567 | 3,506 | 2,456 |
Prepaid expenses and other current assets | 4,772 | 4,749 | 3,248 |
Total current assets | 73,077 | 59,685 | 38,046 |
Property and equipment, net | 55,729 | 49,559 | 38,205 |
Deferred income taxes | 2,893 | 2,357 | 2,200 |
Other assets, net | 1,383 | 1,573 | 2,069 |
TOTAL ASSETS |
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable |
|
|
|
Accrued liabilities | 14,010 | 10,667 | 11,458 |
Total current liabilities | 22,633 | 19,025 | 21,535 |
Deferred and accrued rents | 26,151 | 22,092 | 19,245 |
Long-term debt | — | — | 12,000 |
Total liabilities | 48,784 | 41,117 | 52,780 |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock -- |
440 | 439 | 436 |
Additional paid-in capital | 86,464 | 85,161 | 79,166 |
Accumulated deficit | (2,606) | (13,543) | (51,862) |
Total stockholders' equity | 84,298 | 72,057 | 27,740 |
Total liabilities and stockholders' equity |
|
|
|
|
||
Consolidated Statements of Cash flows | ||
(In thousands) | ||
Thirteen Weeks Ended | ||
2013 |
2012 |
|
Cash Flows From Operating Activities: | ||
Net income |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation expense | 2,237 | 1,607 |
Stock-based compensation expense | 990 | 734 |
Excess tax benefit from stock-based compensation | (2,373) | (1,014) |
Loss on sale of assets | 110 | 7 |
Amortization of debt issuance costs | 73 | 73 |
Deferred income taxes | (597) | (1,352) |
Changes in assets and liabilities: | ||
Accounts receivable | (5,141) | (4,045) |
Inventories | (4,281) | (3,180) |
Prepaid expenses and other assets | 93 | (245) |
Accounts payable | 265 | 1,172 |
Accrued liabilities | 5,717 | 2,579 |
Deferred and accrued rents | 4,059 | 4,355 |
Net cash provided by operating activities | 12,089 | 9,433 |
Cash Flows Used in Investing Activities: | ||
Purchase of property and equipment | (8,517) | (6,620) |
Net cash used in investing activities | (8,517) | (6,620) |
Cash Flows Provided by (Used in) Financing Activities: | ||
Repayments of borrowings under the revolving credit facility | — | (10,000) |
Proceeds from the exercise of stock options | 221 | 348 |
Taxes paid related to net settlement of equity awards | (2,280) | — |
Excess tax benefit from stock-based compensation | 2,373 | 1,014 |
Net cash provided by (used in) financing activities | 314 | (8,638) |
Net increase (decrease) in cash and cash equivalents | 3,886 | (5,825) |
Cash and cash equivalents, beginning of year | 29,877 | 14,046 |
Cash and cash equivalents, end of period |
|
|
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for income taxes |
|
|
Interest paid |
|
|
CONTACT: InvestorsSource: Francesca's CollectionsICR, Inc. Jean Fontana 646-277-1214 CompanyRandi Sonenshein , Vice President, Finance and Investor Relations 832-494-2250
News Provided by Acquire Media