Francesca's Holdings Corporation reported financial results for the fourth quarter ended January 28, 2017.
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Net sales increased 9% to $146.3 million from $134.6 million in the comparable prior year quarter.
This increase was due to the addition of 55 net new boutiques since the prior year period and a 42% increase in ecommerce sales driven by increased website traffic and conversion rate.
Comparable sales were flat compared to the same period last year as the increase in average transaction value offset the decrease in transactions.
The company opened five new boutiques and closed three boutiques during the quarter, bringing the total count to 671 at the end of the quarter.
Gross profit, as a percent of net sales, decreased to 46.4% from 49.1% in the prior year quarter.
This unfavorable variance was principally due to the company's strategic move to take accelerated markdowns in January, which included marking some merchandise out-of-stock at the end of the year, in order to enter fiscal year 2017 with clean inventories.
Selling, general and administrative expenses increased 6% to $44.3 million from $42.0 million in the prior year quarter.
This increase was primarily due to higher boutique and corporate payroll to support the larger boutique base as well as increases in marketing and software costs, partially offset by lower impairment charges.
The increase in marketing expense was due to the implementation of new marketing initiatives, while the higher software costs were due to continuing investments in technology and infrastructure.
Income from operations was $23.6 million, or 16.1% of net sales, compared to $24.2 million, or 18.0% of net sales, in the prior year quarter.
Net income for the fourth quarter was $14.6 million, or $0.39 diluted earnings per share, compared to $14.7 million, or $0.35 diluted earnings per share, in the comparable prior year period.
Full year results
Net sales increased 11% to $487.2 million from $439.4 million in the comparable prior year.
This increase was due a 2% increase in comparable sales as well as the addition of 55 net new boutiques since the prior year end. Ecommerce sales increased 42% driven by increased website traffic and conversion rate.
During fiscal year 2016, the company opened 64 new boutiques and closed nine boutiques compared to 83 new boutiques opened and six boutiques closed in fiscal year 2015.
Net income for fiscal year 2016 totaled $42.0 million, or $1.09 diluted earnings per share, compared to $38.2 million, or $0.91 diluted earnings per share, in the prior year.
Results for fiscal year 2016 include a $2.0 million, or $0.03 per diluted share, net benefit associated with the previously announced resignation of the company's former Chairman, President and CEO. ■