Francesca's Holdings Corporation (NASDAQ:FRAN) Q2 2019 Earnings Conference Call Transcript
Sep 10, 2019 • 08:30 am ET
Greetings and welcome to the Francesca's Holdings Corporation Second Quarter 2019 Earnings Conference Call. [Operator Instructions]
It is now my pleasure to introduce your host, Cindy Thomassee, Chief Financial Officer. Thank you. You may now begin.
Thank you, and good morning, everyone. We appreciate your participation this morning in Francesca's second quarter fiscal year 2019 conference call. Earlier this morning, we issued a press release outlining our financial and operating results for the second quarter ended August 3, 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 Form 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, Cindy. We are very pleased to deliver meaningful sequential improvement in our results for the second quarter illustrating the advancements that we have made on the strategic turnaround plan, we introduced just two quarters ago. Our comparable sales decline of 5% reflects significant improvement from the 13% decrease we saw last quarter and the double-digit declines delivered over the last nine quarters. While we saw a declining gross margin attributable to the aggressive markdowns we took to move to legacy merchandise, partially offset by strong full price sell through of the new product our team has delivered. We also realized considerable costs savings at both the corporate and store level that is flowing to the bottom line and made progress in our efforts to optimize our real estate portfolio.
Overall, I am proud of how swiftly the entire organization has embraced our turnaround strategy and the hard work they have put into the execution of this plan. I want to thank them for their dedication and the contributions they have made thus far and look forward to the continued momentum. With that backdrop, I would like to provide more color on our progress to achieve in regards to the five pillars of our previously stated strategic turnaround plan. First, enhancing our buying merchandising and planning activities, back to a read and react to customer demand model.
We are operating fully as a demand-based read and react business model to deliver a broad and shallow trend right assortment. We have accomplished