* Raises full-year profit forecast to $1.05-$1.17/share
* Expects comparable sales to remain flat at best
* First-qtr comparable sales down 7 pct
* Shares down as much as 14 pct
(Adds details from conference call, updates shares)
June 10 Women's apparel retailer Francesca's
Holdings Corp cut its full-year forecast after
reporting lower-than-expected quarterly profit and sales due to
a harsh winter and increased discounts to clear off an inventory
The company's shares fell as much as 14 percent to an
all-time low of $13.15 on the Nasdaq on Tuesday morning.
Francesca's said it expects its profit to improve in the
second half of the year as comparable-store sales pick up,
particularly in its high-margin jewelry business, where poor
sales hurt first-quarter margins by about 50 basis points.
The company said it expects earnings of $1.05-$1.17 per
share on revenue of $387-$399 million, assuming comparable-store
sales would remain flat at best for the year ending Jan. 31.
It had previously forecast earnings of $1.16-$1.31 per share
on revenue of $391-$409 million. It was expecting comparable
sales to rise or fall in low single digits in percentage terms.
Francesca's, which sells clothing, shoes, bags and jewelry
targeted at women aged 18 to 35, said it expects comparable
sales to fall in the mid- to low-single digits in the current
quarter based on May sales trends and as it sells slow-moving
inventory at discounted rates.
"The retail environment has been challenging since the
beginning of the calendar year with soft traffic trends and
competitively aggressive promotions," Chief Executive Neill
Davis said on a conference call with analysts.
The company joins a number of apparel retailers including
Express Inc, Guess Inc and Aeropostale Inc
who are struggling to attract customers and drive
profits as a revival in consumer spending takes longer.
Francesca's first-quarter boutique sales were hurt by severe
winter weather in February which resulted in full- and
partial-day closing of more than 360 stores, particularly in the
Gulf Coast, Mid-Atlantic, Northeast and New England areas, the
The company's shift to selling more metal-based and less
colorful jewelry also proved unfavorable in the quarter, while
it was unable to cash in on the demand for dresses as it stocked
more tops, skirts and shorts based on February trends.
Francesca's said there was significant traffic increase
through its mobile website and will be relaunching its online
and mobile websites, with larger images, a cleaner interface and
user-generated content, over the summer.
The company, which has 513 boutiques, said net income fell
to $8.6 million, or 20 cents per share, in the quarter ended May
3, from $10.9 million, or 24 cents per share, a year earlier.
Revenue rose 8 percent to $85.4 million, while comparable
sales fell 7 percent.
Analysts on average had expected a profit of 23 cents per
share on revenue of $88.1 million, according to Thomson Reuters
(Reporting By Sruthi Ramakrishnan in Bangalore,; Editing by Don
Sebastian and Maju Samuel)