francesca's® Reports First Quarter Fiscal Year 2015 Financial Results
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Net sales increased 11% to
$95.0 million - Comparable sales decreased 2%
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Diluted earnings per share was
$0.17 - Opened 50 boutiques during the quarter
FIRST QUARTER RESULTS
Net sales increased 11% to
Our comparable sales decreased 2% due to lower boutique transaction count as compared to last year but was partially offset by a 19% increase in DTC sales. The increase in DTC sales was driven by increased traffic and conversion rates.
Gross profit, as a percentage of net sales, decreased to 47.3% from 49.0% in the prior year quarter. This decrease is attributable to 180 basis points of deleveraging of occupancy costs partially offset by 10 basis points improvement in merchandise margin. Our merchandise margin improved due to lesser promotions and markdowns compared to last year but was partially offset by disposal of certain slow-moving inventory.
Selling, general and administrative expenses ("SG&A") increased 19% to
Income from operations was
BALANCE SHEET SUMMARY
Total cash and cash equivalents at the end of the quarter were
We ended the quarter with
SECOND QUARTER AND FISCAL YEAR 2015 GUIDANCE
For the second quarter ending
For the full year ending
Capital expenditures for fiscal year 2015 are expected to be in the range of
Conference Call Information
A conference call to discuss the first quarter fiscal year 2015 results is scheduled for
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, as amended. Such forward-looking statements reflect our 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. These risks and uncertainties include, but are not limited to, the following: the risk that we cannot anticipate, identify and respond quickly to changing fashion trends and customer preferences; our ability to attract a sufficient number of customers to our boutiques or sell sufficient quantities of our merchandise through our direct-to-consumer business; our ability to successfully open and operate new boutiques each year; and our ability to efficiently source and distribute
additional merchandise quantities necessary to support our growth. For additional information regarding 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 for the year ended
About
francesca's® is a growing specialty retailer with retail locations designed and merchandised to feel like unique, 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 597 boutiques in 47 states and the
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Consolidated Statements of Operations | |||||||
(In Thousands, Except Per Share Amounts and Percentages) | |||||||
Thirteen Weeks Ended | |||||||
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Variance | |||||
In USD |
As a % of Net Sales(1) |
In USD |
As a % of Net Sales(1) |
In USD | % |
Basis Points |
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Net sales | $ 95,011 | 100.0 % |
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100.0 % | $ 9,587 | 11 % | -- |
Cost of goods sold and occupancy costs | 50,118 | 52.7 % | 43,592 | 51.0 % | 6,526 | 15 % | 170 |
Gross profit | 44,893 | 47.3 % | 41,832 | 49.0 % | 3,061 | 7 % | (170) |
Selling, general and administrative expenses | 33,003 | 34.7 % | 27,812 | 32.6 % | 5,191 | 19 % | 210 |
Income from operations | 11,890 | 12.5 % | 14,020 | 16.4 % | (2,130) | (15)% | (390) |
Interest expense | (110) | (0.1)% | (221) | (0.3)% | 111 | 50 % | 20 |
Other income | (66) | (0.1)% | 103 | 0.1 % | (169) | (164)% | (20) |
Income before income tax expense | 11,714 | 12.3 % | 13,902 | 16.3 % | (2,188) | (16)% | (400) |
Income tax expense | 4,473 | 4.7 % | 5,342 | 6.3 % | (869) | (16)% | (160) |
Net income | $ 7,241 | 7.6 % | $ 8,560 | 10.0 % |
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(15)% | (240) |
(1) Percentage totals or differences in the above table may not equal the sum or difference of the components due to rounding. | |||||||
Diluted earnings per share | $ 0.17 | $ 0.20 | |||||
Weighted average diluted share count | 42,418 | 42,362 | |||||
Comparable sales change | (2)% | (7)% |
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Consolidated Balance Sheets | |||
(In thousands, except share amounts) | |||
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ASSETS | |||
Current assets: | |||
Cash and cash equivalents |
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Accounts receivable | 11,858 | 12,279 | 10,822 |
Inventories | 31,395 | 23,801 | 28,779 |
Deferred income taxes | 5,288 | 4,858 | 4,643 |
Prepaid expenses and other current assets | 5,547 | 5,890 | 6,179 |
Total current assets | 100,207 | 85,899 | 75,836 |
Property and equipment, net | 77,114 | 74,095 | 69,799 |
Deferred income taxes | 3,623 | 3,642 | 3,113 |
Other assets, net | 1,731 | 1,909 | 1,724 |
TOTAL ASSETS |
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LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable |
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Accrued liabilities | 13,699 | 11,904 | 9,640 |
Total current liabilities | 29,979 | 23,454 | 19,398 |
Landlord incentives and deferred rent | 36,739 | 32,877 | 32,333 |
Long-term debt | -- | -- | 15,000 |
Total liabilities | 66,718 | 56,331 | 66,731 |
Commitments and contingencies | |||
Stockholders' equity: | |||
Common stock - |
455 | 455 | 454 |
Additional paid-in capital | 105,000 | 105,498 | 103,574 |
Retained earnings | 70,645 | 63,404 | 39,856 |
Treasury stock, at cost - 3.2 million shares held at each of |
(60,143) | (60,143) | (60,143) |
Total stockholders' equity | 115,957 | 109,214 | 83,741 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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Consolidated Statements of Cash Flows | ||
(In thousands) | ||
Thirteen Weeks Ended | ||
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Cash Flows From Operating Activities: | ||
Net income |
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Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 3,822 | 3,043 |
Stock-based compensation expense | 793 | 832 |
Excess tax benefit from stock-based compensation | (64) | (581) |
Loss on sale of assets | 128 | 17 |
Deferred income taxes | (1,875) | (855) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 485 | (1,256) |
Inventories | (7,594) | (4,164) |
Prepaid expenses and other assets | 460 | 453 |
Accounts payable | 6,543 | (1,039) |
Accrued liabilities | 1,795 | (185) |
Landlord incentive and deferred rent | 3,862 | 4,885 |
Net cash provided by operating activities | 15,596 | 9,710 |
Cash Flows Used in Investing Activities: | ||
Purchase of property and equipment | (8,721) | (8,078) |
Net cash used in investing activities | (8,721) | (8,078) |
Cash Flows Provided by (Used in) Financing Activities: | ||
Proceeds from the exercise of stock options | 109 | 972 |
Excess tax benefit from stock-based compensation | 64 | 581 |
Repayments of borrowings under the revolving credit facility | -- | (10,000) |
Repurchases of common stock | -- | (5,270) |
Net cash provided by (used in) financing activities | 173 | (13,717) |
Net increase (decrease) in cash and cash equivalents | 7,048 | (12,085) |
Cash and cash equivalents, beginning of year | 39,071 | 37,498 |
Cash and cash equivalents, end of period |
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Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for income taxes |
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Interest paid |
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Supplemental Information | ||||
Quarterly Sales by Merchandise Category | ||||
Thirteen Weeks Ended | Variance | |||
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In Dollars | % | |
(in thousands, except percentages) | ||||
Apparel |
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8 % |
Jewelry | 21,972 | 18,321 | 3,651 | 20 % |
Accessories | 15,379 | 14,144 | 1,235 | 9 % |
Gifts | 9,837 | 8,399 | 1,438 | 17 % |
Merchandise Sales | 95,358 | 85,628 | 9,730 | 11 % |
Others(1) | (347) | (204) | (143) | (70)% |
Net sales |
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11 % |
(1) Includes gift card breakage income, shipping and change in return reserve. |
Quarterly Comparable Transactions Results for Fiscal Year 2015 | |||
Transactions(1) | Average Transaction Value(2) | ||
Q1 | (5)% | 3% | |
(1) The number of comparable transactions (including merchandise and gift card purchases, returns and gift card redemptions) processed through our point-of-sale system for which a receipt was issued. | |||
(2) Average transaction value is calculated by dividing total comparable sales by the number of comparable transactions during the period. |
Quarterly Comparable Sales | |||
FY 2013 | FY 2014 | FY 2015 | |
Q1 | 2 % | (7)% | (2)% |
Q2 | (1)% | (7)% | |
Q3 | (3)% | (6)% | |
Q4 | (6)% | 1 % | |
Fiscal year | (2)% | (5)% |
CONTACT:Source:ICR, Inc. Jean Fontana 646-277-1214 CompanyMark Vendetti 832-494-2315 Mark.Vendetti@francescas.com / IR@francescas.com
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