Dec 5 Francesca's Holdings Corp's
third-quarter results surpassed Wall Street estimates as its
higher-margin products found favor with shoppers, prompting the
retailer to raise its full-year outlook.
The company attributed its strong margins to its "broad and
shallow" strategy of stocking limited quantities of a broad
selection of individual styles, enabling it to respond quickly
to changes in demand.
Short lead times of vendors also allows Francesca's to
introduce new merchandise at its boutiques as often as five
times a week.
The company, which specializes in affordable clothing for
women in the 18 to 35 age group, now expects full-year adjusted
earnings of $1.00 to $1.01 per share, up from its previous
outlook of 96 cents to 98 cents per share.
Analysts on average are expecting earnings of 98 cents,
according to Thomson Reuters I/B/E/S.
The company focused on selling fashion jewelry, accessories
and selected home decor when it was founded. However, over the
years it diversified into apparel, which has now become its
Third-quarter earnings rose to $10.8 million, or 24 cents
per share, from $4.7 million, or 11 cents per share, a year
Revenue rose 44 percent to $72.0 million, helped by a 17
percent increase in comparable boutique sales.
Analysts expected the company to earn 22 cents per share on
revenue of $71.2 million.
Francesca's shares, which have gained more than half their
value this year, closed at $26.81 on the Nasdaq on Tuesday.