As summer wrapped up, consumers' moods grew sour. Fears of a looming
government shutdown led many to simply stop spending on discretionary
items, leading to a cycle of lower profit forecasts for a number of
retailers.
Few appear to have been as hard hit as women's apparel and accessory retailer
Francesca's Holdings (NASDAQ: FRAN).
In early September, Francesca's announced that same-store sales, which
had been growing at a fast pace ever since its July 2011 IPO, had
suddenly turned negative.
Investors were in an unforgiving mood, and shares fell sharply to a 52-week low.
News
of the sudden sales slowdown led many to question if this once-hot
retailer was still capable of robust growth. Sales had risen 45% in
fiscal 2013 to nearly $300 million, leading to a 100% spike in 2013
earnings per share (EPS). Though analysts had been expecting another
banner year in fiscal 2014, they now expect FRAN to boost sales only 17%
(based entirely on new store openings) and grow EPS less than 10%.
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