Francesca's has a new vision for growth

Specialty retailer Francesca’s says its third-quarter sales show initiatives such as reducing inventories and enhancing assortments are producing results ahead of a new growth strategy for the company.



For the third quarter ended Oct. 31, the company posted a net income of $6.95 million, down 4.4% from a year earlier, and earnings of 16 cents per diluted share, down 1 cent from the third quarter of 2014. Net sales were up 19% from one year ago, to $103.7 million. Same-store sales rose 4%.



"We saw strength across all of our departments and throughout many categories, with apparel and accessories businesses leading the way,” said Michael W. Barnes, chairman, president, and CEO. “The sales productivity of new boutiques were the highest since 2012, which we believe is a result of the improved merchandise offering and elevated boutique level execution. In anticipation of an earlier start of the holiday season, we accelerated inventory receipts into the third quarter compared to last year. However, we are planning inventory levels at the end of the fourth quarter to be more consistent with historical levels in line with our expectations."



Barnes, who joined the company about a year ago from Signet, announced a new growth strategy called the “Vision 2020” plan, an idea he brought over from his days at Signet.



The new strategy comes just weeks after Francesca's appointed Laurie Hummel as chief merchandising officer and Erik Lautier as senior VP for online commerce.



"We continue to focus our execution on building the senior management team and executing our long term strategy toward achieving our future goals,” Barnes said. “Now that both our new CMO and our SVP of digital and marketing have joined the leadership team, I look forward to their contributions as we implement and execute our long term strategies which I call the ‘Vision 2020’ plan. Thus far during fiscal 2015, we have driven meaningful improvement in our financial performance and I continue to believe in the significant long term growth opportunities ahead."



Looking ahead the retailer raised its outlook for the end of the fiscal year, forecasting net sales between $432 million and $435 million, and diluted earnings between 86 and 88 cents per share.



Francesca's operates 621 boutiques in 47 states and the District of Columbia.