- Angela Gonzalez-Rodriguez |
New York - Francesca’s first-quarter earnings report were in line with the gloomy expectations the company set in June. As explained by the company, the sales decline was due to COVID-19-related store closures, though e-commerce offset some of those losses.
Sales for the period dropped 50 percent to 43.8 million dollars, but, looking ahead, the company now expects comparable sales for the second quarter - which ends on August, 1 - to take a lesser dip, between 11 percent and 16 percent.
For the first quarter, Francesca's reported a net loss of 15.3 million dollars, or 5.25 dollars per share, after a loss of 10.1 million, or 3.50 dollars per share, last year. Adjusted net losses per share totalled 9.73 dollars.
Francesca’s to reduce sales dip in second quarter
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.
Notably, Francesca's has repaid 2 million dollars of borrowings under its amended ABL credit agreement (there’re 12.1 million dollars outstanding.) Now, the company expects 10.7 million dollars from the CARES Act (Government programme to help businesses manage salaries of furloughed employees due to the pandemic), which it will use towards this outstanding balance.
Looking ahead, Francesca's expects sales in the range of 67 – 71 million dollars for the second quarter, with margins remaining under pressure as the company clears inventory. In this regard, the company’s CEO, Andrew Clarke, said that "our priority remains to ensure that we maintain disciplined inventory levels." The company is looking at relaunching its e-commerce site in the fall.
On the back of the news, the stock was up by 35.2 percent, becoming one of the top three Nasdaq daily percentage gainers on Tuesday.
Image: Francesca’s official website