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Organic Growth Boosts the Revenue of Francesca’s Holdings

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About Francesca’s Holdings

A $486.68 million company, Francesca’s Holdings Corporation (FRAN) is known for its collection of hand-selected merchandise. It offers an eclectic mix of carefully curated clothing, bright jewelry, bold accessories, and playful gifts. The company’s online boutique, francescas.com, offers new arrivals almost daily.

The price movement of Francesca’s Holdings Corporation on a weekly, monthly, and year-to-date basis is 3.23%, -4.17%, and -31.14%, respectively.

The company’s SMA20 (simple moving average of 20 days) rose by 4.02%, and its SMA50 (simple moving average of 50 days) and SMA200 (simple moving average of 200 days) fell by -3.37% and -21.43%, respectively.

The Vanguard Consumer Staples ETF (VDC) tracks a market cap–weighted index of stocks in the consumer staples sector of the US market. The year-to-date price movement of VDC is -2.70%.

Urban Outfitters (URBN), Ann Inc. (ANN), Express (EXPR), L Brands (LB), and Zumiez (ZUMZ) are major competitors of Francesca’s Holdings Corporation (FRAN).

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Performance of Francesca’s Holdings in 1Q15

According to Francesca’s Holdings’ 1Q15 earnings report, the company recorded net revenue of $95.011 million, with an increase in net income by 21.2% on a quarterly basis. The sales in the apparel section increased to $48.170 million, with a 21.7% increase in 1Q15 compared to $39.574 million in apparel sales in 4Q14. The current assets of the company rose by 16.6% in 1Q15.

After this successful quarter, the company projected that its net sales should increase by 9%–12% in 2Q15 when compared with sales of $95.011 million in 1Q15.

Performance of Francesca’s Holdings in 2Q15

In 2Q15, Francesca’s Holdings met its expected increased revenue by 11.6% to $106.033 million. The sales of apparel, jewelry, and gifts increased by 17.1%, 6.6%, and 12.5%, respectively, on a quarter-over-quarter basis. The company’s gross profit increased to $50.308 million, with an increase of 12.0% compared to its 1Q15 gross profit of $44.893 million.

On the balance sheet side, cash and cash equivalents rose by 5.8% to $48.840 million in 2Q15. The company’s current assets increased by 2.7%, which makes the company more stable while paying short-term liabilities. Francesca’s Holdings utilized its net income in paying its long-term debt, resulting in a 3.8% reduction in 2Q15.

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