Francesca’s Q3 net earnings up 78%; 80 stores on tap for fiscal 2013
Houston — Francesca’s Holdings Corp. reported that net earnings in the fourth quarter rose 78% to $14.9 from $8.4 million in the same quarter last year. The company also said it plans to open 80 stores in fiscal year 2013.
Net sales in the quarter ended February 2, 2013, rose 40.6% to $86.7 million, compared with net sales of $61.7 million during the same period in fiscal 2011. Same-stores sales in the quarter increased 9.2%, driven by increased transactions and strong growth in its clothing and jewelry categories.
"We are well positioned with the teams and capabilities to continue expansion of our boutique base, increase boutique productivity and further develop our direct-to-customer presence,” said CEO Neil Davis. “Looking ahead, we continue our growth trajectory with 80 openings for fiscal 2013, reaching the milestone of over 400 locations by the end of the first quarter."
For the full year, net sales increased 45.2% to $296.4 million. Same-store sales rose 14.9%.
Mobile checkout coming to more stores
The Scan & Go system Walmart introduced last fall in Northwest Arkansas and Atlanta has been expanded to six new markets.
The Associated Press reported this week that Walmart’s Scan & Go program, initially available in about 70 stores in two markets, has been expanded to 200 stores in new markets including Dallas, Houston, Austin, Denver, Portland and Seattle.
The system enables shoppers who download an app to scan items with their smartphones and then pay at self-checkout terminals by scanning a code that displays on their smartphone screen.
To call attention to the service, Walmart positioned corrugate displays near the entrances of select stores that explained the service on tear pads and offered Scan & Go bags for sale. The key selling point of the service is the ability to "skip the checkout line," a perennial sore spot with shoppers that Walmart has attempted to address over the years with improved labor scheduling.
Importers split on spring sales growth
NEW YORK — According to Capital Business Credit’s quarterly Global Retail Manufacturers and Importers Survey, 50% of importers of retail goods are experiencing an increase in orders this spring as compared to last year, while 50% are experiencing a decrease or no change from the previous year. Of those surveyed who are having a stronger spring, the majority are experiencing growth between three and 10%.
Respondents indicated that concessions and the new payroll tax are matters of concern for them in 2013. When asked if retailers are asking for more concessions this spring season, 58% of those surveyed indicated that retailers are asking for more concessions than they did in 2012.
When it comes to the payroll tax, 48% of importers worry that their business is facing a negative impact due to the increased tax in 2013. This will force retailers to continue to use sales and promotions to move merchandise which will likely cut into margins all around the sector.
"Consumers are spending less money on non-necessities due to the new payroll tax," said Andrew Tananbaum , executive chairman at CBC. "In order for retailers to get ahead in 2013, they will have to depend more heavily on discounting than they had to in the past."
While the results may seem daunting, there is a glimmer of hope. Of those surveyed, 72% are experiencing reorders for spring merchandise. Also, many manufacturers and importers are expecting retail sales for the full calendar year to be either the same or stronger than they were in 2012.
"Even though the economic factors are working against retailers – particularly those that sell apparel – importers remain cautiously optimistic about the year as a whole," said Tananbaum. "There is no crystal ball to see what the future holds, but the strength of reorders paints a positive picture."