Francesca's swings to Q1 loss; to evaluate store portfolio

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Francesca's swings to Q1 loss; to evaluate store portfolio

By Marianne Wilson - 12/11/2018
Francesca’s Holdings Corp. posted a loss in its first-quarter as traffic to its stores slowed.

The women’s apparel and accessories retailer had a net loss of $16.2 million, or 47 cents a share, in the quarter ended Nov.3, compared to earnings of $0.2 million, or 1 cent a share, in the year-ago period. Adjusted loss came to 17 cents, in line with Street estimates.

Sales fell 10% to $95.4 million, slightly ahead of estimates of $95.1 million. Same-store sales fell 14%.

"Our biggest challenge and focus is to drive improved traffic trends in brick-and-mortar,” said CEO Steve Lawrence. “We are stepping up our marketing efforts with increased investments in influencers, and digital and social media. Our primary focus of this is to increase frequency of visits with existing guests through increased engagement, while winning back lapsed shoppers who have not purchased with us in the last six to 12 months.”

Lawrence added that Francesca’s has brought on a consulting firm to help it drive traffic through a variety of merchandising initiatives, including attention-grabbing window displays and lease line presentations. In addition, the retailer is evaluating its real estate portfolio with the goal of closing underperforming locations. (At the end of the quarter, Francesca's operated approximately 738 stores nationwide.)

“We believe the right long-term strategy for success is to have a strong e-commerce business which complements a vibrant brick-and-mortar footprint, and to accomplish this, we need to optimize our real estate portfolio,” Lawrence said. “We believe the actions we are taking will help stabilize our business and we will be able to move back to top line and bottom line growth while solidifying our unique position as the only national chain of boutiques.”