Francesca's Holdings Corporation (NASDAQ:FRAN) Q1 2019 Earnings Conference Call Transcript
Jun 13, 2019 • 08:30 am ET
Greetings, welcome to Francesca's Holdings Corporation First Quarter 2019 Earnings Conference Call. At this time all participants are in listen-only mode. (Operator Instructions)
I would now turn the conference over to Kelly Dilts. Thank you. You may now begin.
Thanks, and good morning, everyone. We appreciate your participation this morning in Francesca's first quarter fiscal year 2019 conference call. Earlier this morning, we issued a press release outlining our financial and operating results for the first quarter ended May 4, 2019.
Please note, the following discussion includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in today's discussion that address activities, events or developments that the Company expects, believes, targets or anticipates will or may occur in the future are forward-looking statements. The Company's actual results may differ materially from those projected in the forward-looking statements as a result of certain risks or other factors, including those risk factors set forth in the Company's 10-K and quarterly reports on Forms 10-Q filed with the Securities and Exchange Commission. All such statements speak only as of the date made, and except as required by law, the Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. As usual, a replay of today's conference call will be posted on our corporate website.
We will begin today's call with comments from Interim CEO, Michael Prendergast. Michael?
Thank you, Kelly. Good morning and thank you for joining us on the call today. While it has been just a few weeks since our last call, I'm very pleased with the progress we have made in implementing and executing our previously highlighted strategic turnaround plan. While it is still early in the process and we have a long road to success, we have made significant strides in the key areas of the plan.
Before discussing the details of the turnaround plan progress in more detail, I'd like to briefly highlight our financial results for the first quarter. Net sales decreased 13% to $87.1 million, reflecting a 13% decrease in comparable sales, which was in line with our total comp expectation. Boutique and outlet store results were better than expected, while our e-commerce business underperformed expectations. This underperformance was driven by higher than expected markdowns taken to clear through poor performing legacy product and lower than expected sales and inventory levels in regular priced merchandise. I will discuss in further detail the initiatives and activities that are underway to improve the e-commerce business later in the call.
Turning now to an update on our turnaround plan initiatives in progress, as stated in our prior call, there are five main pillars of the plan. We continue to focus the entire organization on execution and delivering results in these key areas. First, enhancing our buying, merchandising, and planning activities. As discussed previously, Francesca's must operate a nimble demand-based business model to be successful.