Please ensure Javascript is enabled for purposes of website accessibility

Why Francesca's Holdings Corp Stock Fell Tuesday

By Daniel Sparks – Dec 5, 2017 at 2:11PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Ouch! Double-digit declines in revenue and comparable sales have investors worried. Here's what you should know.

What happened

Shares of apparel, jewelry, accessory, and gift retailer Francesca's (FRAN) fell as much as 10.3% on Tuesday, following the company's worse-than-expected third-quarter results. The stock is down 9.5% at the time of writing.

Investors are likely bearish about the stock after both revenue and earnings per share (EPS) missed analyst expectations. Francesca's reported revenue of $105.8 million and EPS of $0.01, while on average analysts were expecting about $107 million and $0.04, respectively.

A chalkboard sketch shows a stock price falling

Image source: Getty Images.

So what

The fiscal third quarter was "a challenging period," Francesca's CEO Steve Lawrence admitted.

Net sales were down 11% year over year, while net income of $239,000 was far below net income of $9.7 million in the year-ago quarter.

Hurricanes Harvey and Irma weighed heavily on the quarter. The 18% year-over-year decline in comparable sales included an estimated 425-basis-point effect due to the hurricanes.

Now what

Francesca's is taking corrective measure to improve its positioning in "the holiday season and beyond," Lawrence said. Specifically, the company is refocusing on its core target market and its mission to offer customers a unique and trendy selection at a good price. "We have seen business get progressively better as the new receipts have landed and November comparable sales have sequentially improved from our third quarter performance," Lawrence noted.

Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Francescas Holdings Stock Quote
Francescas Holdings

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.