| Stock (Symbol) | Stock Price | |
Francescas Holdings (FRAN) |
$25 |
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| Data is as of | Expected to Report | Sector |
June 19, 2013 |
Aug 28 – Sept 4 |
Retail & Travel |
| Sharek’s Take | ||
 Francescas Holdings dropped ater reporting last quarter’s earnings. The reason may have been same store sales (SSS) growth. FRAN had SSS of 9% two quarters ago, but only 2% last quarter. Same store sales is the number one facter for top retail stocks, and FRAn needs to get its groove back before investors will take the stock seriously again.Now I’m fearful the SSS slump could turn ugly. Another poor showing could cause the stock to gap down below $25 a share. For now, FRAN is at the bottom of my Power Rankings until we get more clarity. FRAN has solid long-term appeal, and you can read about that in last quarter’s research report. |
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| One-Year Chart | ||
 FRAN was over $30 for a bit before cracking after earnings came out. Investors didn’t like what they saw and sold the stock — even though everything here is in green. What’s up? Some bad news ahead? What are we not seeing? |
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| Earnings Table | ||
 Profits grew 30% last quarter on a solid 29% increase in sales. SSS rose only 2% but in the year-ago-period SSS growth was 16%.FRAN whipped estimated for five straight quarters before it only met estimates last quarter. Momentum here has evaporated. Annual Profit Estimates didn’t increase either. This is no longer a top stock. When I look at quarterly estimates the thing that jumps out to me is the 1 cent reduction in next quarter’s estimates. I’d hate to see FRAN miss and the stock get clobbered. |
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| Fair Value | ||
 I’m taking my Fair Value P/E from 35 to 25. FRAN has solid upside, but proceed with caution. |
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| Ten-Year Chart | ||
 Profits are now set to grow a respectable 24% this year. But notice the stock has no momentum. FRAN should be higher, at least sell for 25 times earnings ($33). |
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| Power Ranking | Bottom Line | |
Growth Portfolio
21 of 21 |
Francescas Holdings has solid long-term potential, but same store sales need to grow around 10% for this stock to go on a run. Furthermore, I feel this stock could gap down if it reports another lackluster quarter. Proceed with caution. FRAN is ranked 21st in the 21 stock Growth Portfolio and I recently sold it from the Aggressive Growth Portfolio. I’m taking a wait-and-see approach to FRAN. |
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Aggressive Growth Portfolio
N/A |
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