Ahead of the Bell: Francesca's Holdings

Francesca's Holdings shares rise on strong 4th-qtr results, 1st-qtr and full year guidance

Associated Press

NEW YORK (AP) -- Francesca's Holdings Corp. shares rose before Wednesday's opening bell after the women's accessories and clothing store chain announced better-than-expected fourth-quarter results and issued a strong outlook for the current quarter and full year.

For the quarter ended Feb. 2, the Houston-based company reported late Tuesday that its profit jumped 78 percent to $14.9 million, or 33 cents per share. Revenue increased 41 percent to $86.7 million.

Analysts, on average, expected a profit of 30 cents per share on $84.7 million in revenue, according to FactSet.

The company said that an extra week in the quarter compared with the prior-year period boosted its earnings by 3 cents per share and revenue by $3.9 million. Revenue at stores open at least a year increased 9.2 percent. The metric, which excluded the extra week in the quarter, is a key measure of a retailer's health, because it excludes sales at stores that recently opened or closed.

Francesca's projected a first-quarter profit of 25 cents or 26 cents per share on between $79.5 million and $80.5 million in revenue. The guidance assumes an increase in revenue at stores open at least a year of between 4 percent and 5 percent.

Analysts expect earnings of 26 cents per share on $78.4 million in revenue.

Janney Capital markets analyst Adrienne Tennant backed her "Buy" rating and $41 fair value estimate for the company, saying that it has some of the best growth prospects for this year.

Tennant noted that the company's prediction for revenue at stores open at least a year comes on top of a 15.5 percent increase in the year-ago period and despite bad weather conditions that have prompted other retailers to issue conservative sales outlooks.

For the full year, Francesca's said it expects earnings of $1.27 to $1.30 per share on $365 million to $370 million in revenue. Analysts expect a profit of $1.27 per share on $370.7 million in revenue.

In premarket trading, shares of Francesca's rose $1.12, or 4.2 percent, to $28.10.

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