* Sees 3rd-qtr comparable store sales down 2-5 pct
* Sees 3rd-qtr earnings/share of $0.19-$0.21 vs est $0.30
* Sees 3rd-qtr revenue of $78 mln-$80 mln vs est $89.7 mln
* Shares fall as much as 26 pct
(Adds comments by CEO, analyst, full-year outlook, result
details, background; updates share move)
By Maria Ajit Thomas
Sept 4 Women's apparel and accessories company
Francesca's Holdings Corp forecast a decline in
comparable store sales, joining a host of retailers hurt by
cautious consumer spending.
Francesca's shares slid nearly 26 percent to $17.80, their
lowest in more than a year and a half, on the Nasdaq on
Customers in the United States have curbed discretionary
spending, as they battle higher taxes and steeper gasoline
prices, choosing to buy cars and houses instead of dresses and
"...Traffic trends slowed and remained challenging
throughout July, which has also continued into August,"
Francesca's Chief Executive Neill Davis said on a post-earnings
call with analysts.
Comparable sales transactions - a proxy for traffic - fell
nearly 4 percent in the second quarter, Davis said. Comparable
sales declined 1 percent.
"They seem to be alluding to the fact that maybe spending is
becoming more cautious and therefore consumers are purchasing
less on impulse on gag gifts and those little gadgets and
instead focusing on occasion-driven purchases," Wedbush
Securities analyst Betty Chen told Reuters.
Francesca's, whose clothing, jewelry and gift items are
targeted towards women between the ages of 18 and 35, said it
expects comparable sales to decline by 2-5 percent in the third
It forecast a profit of 19-21 cents per share on sales of
$78 million-$80 million for the three months ending Nov. 2.
Analysts on average were expecting a profit of 30 cents per
share on revenue of $89.7 million in the current quarter,
according to Thomson Reuters I/B/E/S.
Francesca's may be trying to figure out apparel trends that
could appeal to more buyers, said Wedbush analyst Chen. "Also
maybe some of the product categories will require repositioning,
Gifts, which account for nearly a tenth of Francesca's
sales, declined 1 percent in the second quarter to $7.9 million.
The business includes items such as candles, home accessories
and wall art.
Francesca's said it expects comparable sales to remain
unchanged or fall up to 2 percent in the year ending Feb. 1,
2014 and cut its full-year revenue forecast to $343
million-$349.5 million from $365 million-$370 million.
It also slashed its adjusted profit outlook to $1.10-$1.16
per share from $1.27-$1.30. Analysts were expecting a profit of
$1.29 per share on revenue of $368.7 million.
Net income rose to $14.6 million, or 33 cents per share, in
the quarter ended Aug. 3 from $12.7 million, or 28 cents per
share, a year earlier. Net sales rose 17 percent to $89.6
million. Analysts had expected a profit of 35 cents per share on
revenue of $94.5 million.
Francesca's shares were down nearly 26 percent at $17.88 in
heavy morning trade. Nearly 11.7 million shares had changed
hands by 11:19 a.m. ET, 10 times the stock's 10-day moving
(Reporting By Maria Ajit Thomas in Bangalore; Editing by