Shares of Fashion and accessories retailer Francesca’s Holdings Corporation (FRAN) rose and the Zacks Rank moved a notch higher after the company raised its fourth quarter fiscal 2014 earnings view.
After a disappointing third-quarter fiscal 2014 performance, the company finally saw some encouraging results in the holiday season. Consequently, last week management revised the fourth-quarter fiscal 2014 earnings guidance higher.
Net sales are now expected in the range of $103 to $105 million compared with $96 to $102 million announced during the third quarter conference call. The company expects comps to decline in low single-digits. Earnings per share are expected in the range of 17 to 20 cents higher than 13 to 19 cents expected previously. Gross profit margin is expected decrease by 475 to 525 basis points (bps) due to higher markdowns in its merchandise given during the quarter.
Francesca’s has been posting soft results for the past few quarters, primarily due to lower sales at its boutiques.
Francesca’s witnessed a surge in sales during the holiday season — the first two months of the fourth quarter. The seasonal and holiday offerings of the company witnessed greater demand and boosted sales.
The company is trying to turn around under its new leadership. On Dec 5, Francesca's appointed Michael Barnes, the former CEO of Signet Jewelers, as the new CEO. He was also one of the original employees at Fossil Group Inc. (FOSL) and spent more than 25 years there. However, it has yet to be seen if the new CEO is able to deliver the desired results.
Stocks to Consider
Better-ranked stocks in the apparel industry worth considering are Brown Shoe Company (BWS) and Dollar Stores Inc. (DLTR). All the stocks have a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment