Shares of Francesca's Holdings Corp. (FRAN) soared 42.5% in Tuesday premarket trading after the women's clothing and accessories retailer gave a second-quarter sales outlook that improves on the first-quarter result. For the first quarter, Francesca's reported a net loss of $15.3 million, or $5.25 per share, after a loss of $10.1 million, or $3.50 per share, last year. Adjusted net losses per share totaled $9.73. Sales of $43.8 million were halved from $87.1 million last year. There are no FactSet consensus numbers. The sales decline was due to COVID-19-related store closures, though e-commerce offset some of those losses. The company permanently closed eight stores during the quarter bringing the total to 703. Francesca's has reopened 674 locations, most with reduced operating hours and reduced capacity. Twenty-two stores in California have re-closed due to the coronavirus. All reopened stores require customers to wear a face covering. Francesca's has repaid $2.0 million of borrowings under its amended ABL credit agreement with $12.1 million outstanding. The company expects $10.7 million from the CARES Act, which it will use towards this outstanding balance. Cash and equivalents total $18.7 million. The company has also substantially deferred or abated lease payments for April, May and June. For the second quarter, Francesca's expects sales in the range of $67.0 million and $71.0 million. Comparable store sales are expected to fall 11% to 16%. Margins are expected to be under pressure as the company clears inventory, however "our priority remains to ensure that we maintain disciplined inventory levels," said Andrew Clarke, Francesca's chief executive, in a statement. The company expects to relaunch its e-commerce site in the fall. An iOS app is coming in the next few weeks with an Android app launching in the fall. Cash and cash equivalents are expected to be in the $10.0 million to $12.0 million range. Last month, Francesca's raised doubts about its ability to continue as a going concern ( ) due to COVID-19. Francesca's stock has fallen more than 55% for the year to date while the S&P 500 index is up 0.3% for the period.
-Tonya Garcia; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
July 28, 2020 08:29 ET (12:29 GMT)
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