Francesca's Q2 Results Miss Estimates; Forecasts Annual Profit Below Street View

(RTTNews) - Women's apparel retailer Francesca's Holdings Corp. (FRAN) Tuesday reported second-quarter earnings which declined, as lower gross margin along with higher boutique and payroll expenses overshadowed sales growth. In addition, both earnings and sales fell short of analysts' estimates.

The company also issued its annual and third-quarter outlook below Wall Street expectations.

For the 3-month period, net earnings were $10.3 million or $0.24 per share, down from $14.6 million or $0.33 per share a year earlier.

Analysts polled by Thomson-Reuters had a consensus earnings estimate of $0.26. Analysts' estimates typically exclude one-time items.

Quarterly sales increased to $97.3 million, from $89.6 million last year, but shy of the $99.79 million Wall Street expected. In addition, comparable sales declined by 7 percent.

Looking ahead, the company annual earnings of $0.88 to $0.98 per share on sales of $373.0 million to $383.0 million, and comparable sales decrease in mid-to-low single digit.

The company expects capital spending of $25.5 million to $27.5 million, chiefly on the 88 boutiques it plans to open this year, and on remodels as well investments in merchandising and direct-to-consumer technology.

For the third quarter, the company expects earnings of $0.17 to $0.22 per share on sales of $87.0 million and $92.0 million, and comparable sales decrease in mid-to-low single digit.

Analysts expect annual earnings of $1.05 per share on sales of $384.06 million, and third-quarter earnings of $0.25 per share on sales of $92.59 million.