Has Francesa's Hit Rock Bottom Yet?

Francesca’s Holdings Corp. (NASDAQ: FRAN) released its most recent quarterly results before the markets opened on Tuesday. In an unexpected move, shares dropped to their lowest level ever since the company has been public. The company originally entered the market at $23 per share.

The company said that it had $0.01 in earnings per share (EPS) and $113 million in revenue, compared with consensus estimates that called for $0.05 per share and $120.78 million. The same period of last year reportedly had $0.20 in EPS and $119.71 million in revenue.

What really did the company in was that comparable sales dropped 13% in this quarter, compared to a decrease of 3% in the same period last year. The decline in comparable sales was primarily due to the decline in boutique traffic and conversion rate, although conversion sequentially improved from month-to-month during the quarter.

Looking ahead to the fiscal third quarter, the company expects to see a diluted loss per share of $0.03 to a diluted earnings per share of $0.02 and net sales in the range of $105 million to $110 million, assuming comparable sales decrease in the range of 3% to 8%. Consensus estimates call for $0.22 in EPS and $116.51 million in revenue for the quarter.

Steve Lawrence, president and CEO, commented:

Second quarter sales results were disappointing mostly due to weak traffic trends. While we have made significant progress in our merchandising strategy, inventory discipline and store renovations, we know there is additional work to be done to win back our core customer. We did see some positives in the business, including improving conversion, very strong ecommerce sales growth, and a significant reduction in clearance inventory.

Shares of Francesca’s were last seen down about 33% at $3.95, with a consensus analyst price target of $9.00 and a 52-week trading range of $3.92 to $8.48.

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