Shares of apparel, jewelry, accessory, and gift retailer Francesca's (NASDAQ: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.
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.
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.