Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Nov. 02, 2013 | Nov. 30, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Francesca's Holdings CORP | ' |
Entity Central Index Key | '0001399935 | ' |
Current Fiscal Year End Date | '--02-01 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Trading Symbol | 'FRAN | ' |
Entity Common Stock, Shares Outstanding | ' | 42,011,957 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 2-Nov-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Unaudited_Consolidated_Balance
Unaudited Consolidated Balance Sheets (USD $) | Nov. 02, 2013 | Feb. 02, 2013 | Oct. 27, 2012 |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and cash equivalents | $31,842 | $29,877 | $12,906 |
Accounts receivable | 9,850 | 2,504 | 5,634 |
Inventories | 30,638 | 19,049 | 23,523 |
Deferred income taxes | 3,688 | 3,506 | 2,872 |
Prepaid expenses and other current assets | 6,222 | 4,749 | 4,622 |
Total current assets | 82,240 | 59,685 | 49,557 |
Property and equipment, net | 57,359 | 49,559 | 43,021 |
Deferred income taxes | 4,046 | 2,357 | 1,923 |
Other assets, net | 2,555 | 1,573 | 2,372 |
Total assets | 146,200 | 113,174 | 96,873 |
Current liabilities: | ' | ' | ' |
Accounts payable | 8,570 | 8,358 | 12,369 |
Accrued liabilities | 10,365 | 10,667 | 6,649 |
Total current liabilities | 18,935 | 19,025 | 19,018 |
Deferred and accrued rents | 27,554 | 22,092 | 21,895 |
Long-term debt | 25,000 | 0 | 0 |
Total liabilities | 71,489 | 41,117 | 40,913 |
Commitments and contingencies | ' | ' | ' |
Stockholders' equity: | ' | ' | ' |
Common stock - $.01 par value, 80.0 million shares authorized; 44.2 million, 43.9 million and 43.9 million shares issued; 42.3 million, 43.9 million and 43.9 million shares outstanding at November 2, 2013, February 2, 2013 and October 27, 2012, respectively. | 442 | 439 | 438 |
Additional paid-in capital | 90,511 | 85,161 | 83,935 |
Retained earnings (accumulated deficit) | 20,684 | -13,543 | -28,413 |
Treasury stock, at cost - 1.9 million shares at November 2, 2013 | -36,926 | 0 | 0 |
Total stockholders’ equity | 74,711 | 72,057 | 55,960 |
Total liabilities and stockholders' equity | $146,200 | $113,174 | $96,873 |
Unaudited_Consolidated_Balance1
Unaudited Consolidated Balance Sheets (Parenthetical) (USD $) | Nov. 02, 2013 | Feb. 02, 2013 | Oct. 27, 2012 |
In Millions, except Per Share data, unless otherwise specified | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | $0.01 |
Common stock, shares authorized | 80 | 80 | 80 |
Common stock, shares issued | 44.2 | 43.9 | 43.9 |
Common stock, shares outstanding | 42.3 | 43.9 | 43.9 |
Treasury stock, shares | 1.9 | ' | ' |
Unaudited_Consolidated_Stateme
Unaudited Consolidated Statements of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 02, 2013 | Oct. 27, 2012 | Nov. 02, 2013 | Oct. 27, 2012 |
Net sales | $79,632 | $71,986 | $248,185 | $209,673 |
Cost of goods sold and occupancy costs | 39,275 | 34,115 | 118,700 | 97,443 |
Gross profit | 40,357 | 37,871 | 129,485 | 112,230 |
Selling, general and administrative expenses | 25,766 | 20,144 | 72,800 | 58,960 |
Income from operations | 14,591 | 17,727 | 56,685 | 53,270 |
Interest expense | -129 | -114 | -362 | -546 |
Other income (expense) | -77 | 105 | 127 | 257 |
Income before income tax expense | 14,385 | 17,718 | 56,450 | 52,981 |
Income tax expense | 5,714 | 6,921 | 22,223 | 20,790 |
Net income | $8,671 | $10,797 | $34,227 | $32,191 |
Basic earnings per common share (in dollars per share) | $0.20 | $0.25 | $0.78 | $0.74 |
Diluted earnings per common share (in dollars per share) | $0.20 | $0.24 | $0.77 | $0.72 |
Weighted average shares outstanding: | ' | ' | ' | ' |
Basic shares (in shares) | 43,281 | 43,825 | 43,759 | 43,700 |
Diluted shares (in shares) | 43,993 | 44,911 | 44,600 | 44,791 |
Unaudited_Consolidated_Stateme1
Unaudited Consolidated Statement of Changes in Stockholders' Equity (USD $) | Total | Common Stock Outstanding (in shares) | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance at Feb. 02, 2013 | $72,057 | ' | $439 | $85,161 | ($13,543) | $0 |
Balance (in shares) at Feb. 02, 2013 | ' | 43,880,000 | ' | ' | ' | ' |
Net income | 34,227 | ' | 0 | 0 | 34,227 | 0 |
Stock-based compensation | 2,955 | ' | 0 | 2,955 | 0 | 0 |
Restricted stock vested | 0 | ' | 0 | 0 | 0 | 0 |
Restricted stock vested (in shares) | ' | 2,000 | ' | ' | ' | ' |
Stock options exercised and related tax benefit | 2,398 | ' | 3 | 2,395 | 0 | 0 |
Stock options exercised and related tax benefit (in shares) | ' | 357,000 | ' | ' | ' | ' |
Repurchases of common stock | -36,926 | ' | 0 | 0 | 0 | -36,926 |
Repurchases of common stock (in shares) | ' | -1,942,000 | ' | ' | ' | ' |
Balance at Nov. 02, 2013 | $74,711 | ' | $442 | $90,511 | $20,684 | ($36,926) |
Balance (in shares) at Nov. 02, 2013 | ' | 42,297,000 | ' | ' | ' | ' |
Unaudited_Consolidated_Stateme2
Unaudited Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Nov. 02, 2013 | Oct. 27, 2012 |
Cash Flows From Operating Activities: | ' | ' |
Net income | $34,227 | $32,191 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation expense | 7,421 | 5,458 |
Stock-based compensation expense | 2,955 | 2,684 |
Excess tax benefit from stock-based compensation | -3,522 | -2,193 |
Loss on sale of assets | 343 | 89 |
Amortization of debt issuance costs | 216 | 220 |
Deferred income taxes | -1,871 | -1,491 |
Changes in assets and liabilities: | ' | ' |
Accounts receivable | -3,824 | -3,199 |
Inventories | -11,589 | -9,061 |
Prepaid expenses and other assets | -2,295 | -2,068 |
Accounts payable | 212 | 3,463 |
Accrued liabilities | -302 | -1,051 |
Deferred and accrued rents | 5,462 | 7,005 |
Net cash provided by operating activities | 27,433 | 32,047 |
Cash Flows Used in Investing Activities: | ' | ' |
Purchase of property and equipment | -15,646 | -15,370 |
Proceeds from sale of assets | 82 | 0 |
Net cash used in investing activities | -15,564 | -15,370 |
Cash Flows Used in Financing Activities: | ' | ' |
Proceeds from borrowings under the revolving credit facility | 25,000 | 0 |
Repayments of borrowings under the revolving credit facility | 0 | -22,000 |
Payments of debt issuance costs | -376 | 0 |
Repurchases of common stock | -36,926 | 0 |
Proceeds from the exercise of stock options | 1,156 | 1,990 |
Taxes paid related to net settlement of equity awards | -2,280 | 0 |
Excess tax benefit from stock-based compensation | 3,522 | 2,193 |
Net cash used in financing activities | -9,904 | -17,817 |
Net increase (decrease) in cash and cash equivalents | 1,965 | -1,140 |
Cash and cash equivalents, beginning of year | 29,877 | 14,046 |
Cash and cash equivalents, end of period | 31,842 | 12,906 |
Supplemental Disclosures of Cash Flow Information: | ' | ' |
Cash paid for income taxes | 28,352 | 26,182 |
Interest paid | $125 | $405 |
Nature_of_Business_and_Summary
Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended | |
Nov. 02, 2013 | ||
Accounting Policies [Abstract] | ' | |
Nature of Business and Summary of Significant Accounting Policies | ' | |
1 | Nature of Business and Summary of Significant Accounting Policies | |
Nature of Business | ||
Francesca’s Holdings Corporation (the “Company”) is a holding company incorporated in 2007 under the laws of the State of Delaware. The Company’s business operations are conducted through its wholly-owned indirect subsidiary Francesca’s Collections, Inc. (“Francesca’s Collections”), a corporation formed and existing under the laws of the State of Texas. Francesca’s Collections is wholly-owned by Francesca’s LLC (the “Parent”), a limited liability company formed and existing under the laws of the State of Delaware. Parent is a wholly-owned subsidiary of the Company. | ||
The Company operates a national chain of retail locations designed and merchandised to feel like independently owned, upscale boutiques and provide its customers with an inviting, intimate and fun shopping experience. The Company offers a diverse and uniquely balanced mix of apparel, jewelry, accessories and gifts at attractive prices. At November 2, 2013, the Company operated 446 boutiques, which are located in 45 states throughout the United States, and its direct-to-consumer website. | ||
Basis of Presentation | ||
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. The financial information as of February 2, 2013 was derived from the Company’s audited consolidated financial statements and notes thereto as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013. | ||
These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013. | ||
Due to seasonal variations in the retail industry, interim results are not necessarily indicative of results that may be expected for any other interim period or for a full year. | ||
Principles of Consolidation | ||
The accompanying unaudited consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. | ||
Fiscal Year | ||
The Company maintains its accounts on a 52- or 53-week year ending on the Saturday closest to January 31st. Fiscal year 2013 is a 52-week year while fiscal year 2012 was a 53-week year. The fiscal quarters ended November 2, 2013 and October 27, 2012 refer to the thirteen-week periods ended as of those dates. The year-to-date periods ended November 2, 2013 and October 27, 2012 refer to the thirty nine week periods ended as of those dates. | ||
Reclassification | ||
A prior year amount has been reclassified to facilitate comparability with the current year presentation. This reclassification did not impact the Company’s results of operations in any periods presented. | ||
Gift Cards and Gift Card Breakage | ||
The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. During the first quarter of fiscal year 2013, the Company accumulated sufficient historical information to estimate the rate of gift card breakage. Based on this historical information, the Company recognized less than $0.1 million and $0.4 million of gift card breakage income during the thirteen and thirty nine weeks ended November 2, 2013, respectively. The gift card breakage income is included in net sales. | ||
Management Estimates and Assumption | ||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | ||
Earnings_Per_Share
Earnings Per Share | 9 Months Ended | |||||||||||||
Nov. 02, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Earnings Per Share | ' | |||||||||||||
2 | Earnings Per Share | |||||||||||||
Basic earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of stock options and restricted stock grants using the treasury stock method. | ||||||||||||||
The following table summarizes the potential dilution that could occur if options to acquire common stock were exercised or if the restricted stock grants were fully vested and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share: | ||||||||||||||
Thirteen Weeks Ended | Thirty Nine Weeks Ended | |||||||||||||
November 2, | October 27, | November 2, | October 27, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands, except per share data) | ||||||||||||||
Numerator: | ||||||||||||||
Net income | $ | 8,671 | $ | 10,797 | $ | 34,227 | $ | 32,191 | ||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding - basic | 43,281 | 43,825 | 43,759 | 43,700 | ||||||||||
Options and other dilutive securities | 712 | 1,086 | 841 | 1,091 | ||||||||||
Weighted-average common shares outstanding - diluted | 43,993 | 44,911 | 44,600 | 44,791 | ||||||||||
Per common share: | ||||||||||||||
Basic earnings per common share | $ | 0.2 | $ | 0.25 | $ | 0.78 | $ | 0.74 | ||||||
Diluted earnings per common share | $ | 0.2 | $ | 0.24 | $ | 0.77 | $ | 0.72 | ||||||
Stock options to purchase shares of the Company’s common stock in the amount of 0.8 million shares in each of the thirteen and thirty nine weeks ended November 2, 2013, and 0.4 million in each of the thirteen and thirty nine weeks ended October 27, 2012, were not included in the computation of diluted earnings per share due to their anti-dilutive effect. | ||||||||||||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | |
Nov. 02, 2013 | ||
Fair Value Disclosures [Abstract] | ' | |
Fair Value of Financial Instruments | ' | |
3 | Fair Value of Financial Instruments | |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximated their fair values due to the short term nature of these financial assets and liabilities. The carrying amount of the Company’s debt approximates its fair value due to proximity of the debt issue date and the balance sheet date and the variable component of interest on debt. | ||
Income_Taxes
Income Taxes | 9 Months Ended | |
Nov. 02, 2013 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Taxes | ' | |
4 | Income Taxes | |
The provision for income taxes is based on the current estimate of the annual effective tax rate. The effective income tax rate in each of the thirteen and thirty nine weeks ended November 2, 2013 was 39.7% and 39.4%, respectively. The effective tax rate in each of the thirteen and thirty nine weeks ended October 27, 2012 was 39.1% and 39.2%, respectively. The difference between our effective tax rate and statutory rate primarily relates to state income taxes. | ||
Revolving_Credit_Facility
Revolving Credit Facility | 9 Months Ended | |
Nov. 02, 2013 | ||
Debt Disclosure [Abstract] | ' | |
Revolving Credit Facility | ' | |
5 | Revolving Credit Facility | |
On August 30, 2013, Francesca’s Collections, as borrower, and the Parent entered into a Second Amended and Restated Credit Agreement (“Second Amended and Restated Credit Agreement”) with Royal Bank of Canada, as Administrative Agent and Collateral Agent, and the lenders party thereto, which amends and restates the existing Amended and Restated Credit Agreement, dated as of July 27, 2011, as amended by Amendment No. 1 to the Amended and Restated Credit Agreement, dated February 7, 2013. The Second Amended and Restated Credit Agreement provides $75.0 million of credit facility (including up to $10.0 million for letters of credit) that matures on August 30, 2018. The Second Amended and Restated Credit Agreement also contains an increase option permitting Francesca’s Collections, subject to certain requirements, to arrange with the lenders for additional incremental commitments up to an aggregate of $25.0 million, subject to reductions in the event Francesca’s Collections has certain indebtedness outstanding. At November 2, 2013, $25.0 million was outstanding under the Second Amended and Restated Credit Agreement. | ||
All obligations under the Second Amended and Restated Credit Agreement are unconditionally guaranteed by, subject to certain exceptions, the Parent and each of Francesca’s Collections’ existing and future direct and indirect wholly owned domestic subsidiaries. There are currently no subsidiary guarantors for the Second Amended and Restated Credit Agreement because Francesca’s Collections does not currently have any subsidiaries. All obligations under the Second Amended and Restated Credit Agreement, and the guarantees of those obligations (as well as cash management obligations and any interest rate hedging or other swap agreements), are secured by substantially all of Francesca’s Collections’ assets as well as the assets of any subsidiary guarantor. Additionally, the Second Amended and Restated Credit Agreement contains customary events of default and requires Francesca’s Collections to comply with certain financial covenants. Francesca’s Collections is permitted to pay dividends to the extent it has available capacity in its investment basket (as defined in the Second Amended and Restated Credit Agreement), no default or event of default is continuing, certain procedural requirements have been satisfied and Francesca’s Collections is in pro forma compliance with a maximum secured leverage ratio. As of November 2, 2013, Francesca’s Collections was in compliance with all covenants under the Second Amended and Restated Credit Agreement. | ||
The borrowings under the Second Amended and Restated Credit Agreement bear interest at a rate equal to an applicable margin plus, at the option of Francesca’s Collection’s, either (a) in the case of base rate borrowings, a rate equal to the highest of (1) the prime rate of Royal Bank of Canada, (2) the federal funds rate plus 1/2 of 1%, and (3) the LIBOR for an interest period of one month plus 1.00%, or (b) in the case of LIBOR borrowings, a rate equal to the LIBOR for the interest period relevant to such borrowing. The applicable margin for borrowings under the Second Amended and Restated Credit Agreement ranges from 0.75% to 1.25% with respect to base rate borrowings and from 1.75% to 2.25% with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of a ratio of consolidated total debt to consolidated EBITDA. During the thirteen weeks ended November 2, 2013, amounts outstanding under the Second Amended and Restated Credit Agreement accrued interest at an average rate of 2.1%. | ||
Stockbased_Compensation
Stock-based Compensation | 9 Months Ended | |||||||||||
Nov. 02, 2013 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||
Stock-based Compensation | ' | |||||||||||
6 | Stock-based Compensation | |||||||||||
Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest. Stock-based compensation cost recognized in the thirteen and thirty nine weeks ended November 2, 2013 totaled $1.0 million and $3.0 million, respectively. Stock-based compensation cost recognized in the thirteen and thirty nine weeks ended October 27, 2012 totaled $1.0 million and $2.7 million, respectively. | ||||||||||||
Stock Options | ||||||||||||
The following table summarizes stock option activity during the thirty nine weeks ended November 2, 2013. | ||||||||||||
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | Aggregate | ||||||||||
Number of | Exercise | Contractual | Intrinsic | |||||||||
Shares | Price | Life | Value | |||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | |||||||||
Outstanding as of February 2, 2013 | 2,823 | $ | 12.23 | |||||||||
Options granted | 73 | 23.94 | ||||||||||
Options exercised | -442 | 3.26 | ||||||||||
Options forfeited or expired | -42 | 8.25 | ||||||||||
Outstanding as of November 2, 2013 | 2,412 | $ | 14.29 | 7 | $ | 17,282 | ||||||
Exercisable at November 2, 2013 | 1,332 | $ | 9.41 | 7 | $ | 13,234 | ||||||
During the thirty nine weeks ended November 2, 2013, the intrinsic value of stock options exercised totaled $9.9 million, while stock options were granted at a weighted average grant date fair value of $13.82. The number of options exercised in the above table includes shares withheld to satisfy certain employees’ obligation for exercise price and minimum statutory withholding requirements. | ||||||||||||
As of November 2, 2013, there was approximately $9.7 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted-average period of 3 years. | ||||||||||||
Share_Repurchases
Share Repurchases | 9 Months Ended | |
Nov. 02, 2013 | ||
Share Repurchases [Abstract] | ' | |
Share Repurchases | ' | |
7 | Share Repurchases | |
On September 3, 2013, the Company’s Board of Directors authorized a $100.0 million share repurchase program commencing on the same date. This authorization has no expiration date. Under the repurchase program, purchases can be made from time to time in the open market, in privately negotiated transactions, under Rule 10b5-1 plans or through other available means. The specific timing and amount of the repurchases is dependent on market conditions, securities law limitations and other factors. During the thirteen weeks ended November 2, 2013, the Company repurchased 1,942,081 shares of its common stock at a cost of approximately $36.9 million or an average price (including brokers’ commission) of $19.00 per share. The cost of repurchased shares is presented as treasury stock in the unaudited consolidated balance sheets. As of November 2, 2013, the remaining balance available for future share repurchase was approximately $63.1 million. | ||
Subsequent to November 2, 2013 and through December 6, 2013, the Company repurchased 371,100 shares of common stock for approximately $7.0 or an average price (including brokers’ commission) of $18.79 per share. | ||
Commitment_and_Contingencies
Commitment and Contingencies | 9 Months Ended | ||||
Nov. 02, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitment and Contingencies | ' | ||||
8 | Commitment and Contingencies | ||||
Operating Leases | |||||
The Company leases boutique space and office space under operating leases expiring in various years through the fiscal year ending 2025. Certain of the leases provide that the Company may cancel the lease, with penalties as defined in the lease, if the Company’s boutique sales at that location fall below an established level. Certain leases provide for additional rent payments to be made when sales exceed a base amount. Certain operating leases provide for renewal options for periods from three to five years at their fair rental value at the time of renewal. | |||||
Minimum future rental payments under non-cancellable operating leases as of November 2, 2013, are approximately as follows: | |||||
Fiscal year | Amount | ||||
(In thousands) | |||||
Remainder of 2013 | $ | 6,878 | |||
2014 | 29,566 | ||||
2015 | 29,549 | ||||
2016 | 28,719 | ||||
2017 | 27,321 | ||||
Thereafter | 93,638 | ||||
$ | 215,671 | ||||
Legal Proceedings | |||||
On September 27, 2013, the Company and certain of its current directors and officers were named as defendants in an action entitled Ortuzar v. Francesca’s Holdings Corp., et al., which was filed in the United States District Court for the Southern District of New York. This action purports to have been brought on behalf of purchasers of the Company’s publicly traded securities between March 20, 2013 and September 3, 2013 and alleges that the defendants made false and misleading statements in certain public disclosures regarding the Company’s current and future business and financial condition in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. A substantially related class action lawsuit, entitled West Palm Beach Police Pension Fund v. Francesca’s Holdings Corp., et al., was filed on November 4, 2013 in the United States District Court for the Southern District of New York, on behalf of purchasers of the Company’s publicly traded securities between January 10, 2012 and September 3, 2013 alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11, 12(a) and 15 of the Securities Act of 1933. This action added additional defendants, including certain of the Company’s current and former directors and officers. Both of the purported class action lawsuits seek damages in an unspecified amount. The Company believes that the allegations contained in these complaints are without merit and intends to vigorously defend itself against all claims. A reasonable estimate of the amount of any possible loss or range of loss cannot be made at this time. | |||||
The Company, from time to time, is subject to various claims and legal proceedings arising in the ordinary course of business. While the outcome of any such claim cannot be predicted with certainty, in the opinion of management, the outcome of these matters will not have a material adverse effect on the Company’s business, results of operations or financial conditions. | |||||
Nature_of_Business_and_Summary1
Nature of Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Nov. 02, 2013 | |
Accounting Policies [Abstract] | ' |
Basis of Presentation | ' |
Basis of Presentation | |
The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. The financial information as of February 2, 2013 was derived from the Company’s audited consolidated financial statements and notes thereto as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013. | |
These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013. | |
Due to seasonal variations in the retail industry, interim results are not necessarily indicative of results that may be expected for any other interim period or for a full year. | |
Principles of Consolidation | ' |
Principles of Consolidation | |
The accompanying unaudited consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation. | |
Fiscal Year | ' |
Fiscal Year | |
The Company maintains its accounts on a 52- or 53-week year ending on the Saturday closest to January 31st. Fiscal year 2013 is a 52-week year while fiscal year 2012 was a 53-week year. The fiscal quarters ended November 2, 2013 and October 27, 2012 refer to the thirteen-week periods ended as of those dates. The year-to-date periods ended November 2, 2013 and October 27, 2012 refer to the thirty nine week periods ended as of those dates. | |
Reclassification | ' |
Reclassification | |
A prior year amount has been reclassified to facilitate comparability with the current year presentation. This reclassification did not impact the Company’s results of operations in any periods presented. | |
Gift Cards and Gift Card Breakage | ' |
Gift Cards and Gift Card Breakage | |
The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. During the first quarter of fiscal year 2013, the Company accumulated sufficient historical information to estimate the rate of gift card breakage. Based on this historical information, the Company recognized less than $0.1 million and $0.4 million of gift card breakage income during the thirteen and thirty nine weeks ended November 2, 2013, respectively. The gift card breakage income is included in net sales. | |
Management Estimates and Assumption | ' |
Management Estimates and Assumption | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. | |
Earnings Per Share | ' |
Earnings Per Share | |
Basic earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of stock options and restricted stock grants using the treasury stock method. | |
Fair Value of Financial Instruments | ' |
Fair Value of Financial Instruments | |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities, which include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximated their fair values due to the short term nature of these financial assets and liabilities. The carrying amount of the Company’s debt approximates its fair value due to proximity of the debt issue date and the balance sheet date and the variable component of interest on debt. | |
Stock-based Compensation | ' |
Stock-based Compensation | |
Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest. Stock-based compensation cost recognized in the thirteen and thirty nine weeks ended November 2, 2013 totaled $1.0 million and $3.0 million, respectively. Stock-based compensation cost recognized in the thirteen and thirty nine weeks ended October 27, 2012 totaled $1.0 million and $2.7 million, respectively. | |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 9 Months Ended | |||||||||||||
Nov. 02, 2013 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||
The following table summarizes the potential dilution that could occur if options to acquire common stock were exercised or if the restricted stock grants were fully vested and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share: | ||||||||||||||
Thirteen Weeks Ended | Thirty Nine Weeks Ended | |||||||||||||
November 2, | October 27, | November 2, | October 27, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands, except per share data) | ||||||||||||||
Numerator: | ||||||||||||||
Net income | $ | 8,671 | $ | 10,797 | $ | 34,227 | $ | 32,191 | ||||||
Denominator: | ||||||||||||||
Weighted-average common shares outstanding - basic | 43,281 | 43,825 | 43,759 | 43,700 | ||||||||||
Options and other dilutive securities | 712 | 1,086 | 841 | 1,091 | ||||||||||
Weighted-average common shares outstanding - diluted | 43,993 | 44,911 | 44,600 | 44,791 | ||||||||||
Per common share: | ||||||||||||||
Basic earnings per common share | $ | 0.2 | $ | 0.25 | $ | 0.78 | $ | 0.74 | ||||||
Diluted earnings per common share | $ | 0.2 | $ | 0.24 | $ | 0.77 | $ | 0.72 | ||||||
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 9 Months Ended | |||||||||||
Nov. 02, 2013 | ||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||
Summary of Stock Options Activity | ' | |||||||||||
The following table summarizes stock option activity during the thirty nine weeks ended November 2, 2013. | ||||||||||||
Weighted | ||||||||||||
Weighted | Average | |||||||||||
Average | Remaining | Aggregate | ||||||||||
Number of | Exercise | Contractual | Intrinsic | |||||||||
Shares | Price | Life | Value | |||||||||
(In thousands) | (Per share) | (In years) | (In thousands) | |||||||||
Outstanding as of February 2, 2013 | 2,823 | $ | 12.23 | |||||||||
Options granted | 73 | 23.94 | ||||||||||
Options exercised | -442 | 3.26 | ||||||||||
Options forfeited or expired | -42 | 8.25 | ||||||||||
Outstanding as of November 2, 2013 | 2,412 | $ | 14.29 | 7 | $ | 17,282 | ||||||
Exercisable at November 2, 2013 | 1,332 | $ | 9.41 | 7 | $ | 13,234 | ||||||
Commitment_and_Contingencies_T
Commitment and Contingencies (Tables) | 9 Months Ended | ||||
Nov. 02, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | ' | ||||
Minimum future rental payments under non-cancellable operating leases as of November 2, 2013, are approximately as follows: | |||||
Fiscal year | Amount | ||||
(In thousands) | |||||
Remainder of 2013 | $ | 6,878 | |||
2014 | 29,566 | ||||
2015 | 29,549 | ||||
2016 | 28,719 | ||||
2017 | 27,321 | ||||
Thereafter | 93,638 | ||||
$ | 215,671 | ||||
Nature_of_Business_and_Summary2
Nature of Business and Summary of Significant Accounting Policies (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Nov. 02, 2013 | Nov. 02, 2013 |
States | States | |
Boutiques | Boutiques | |
Company Information and Summary of Significant Accounting Policies | ' | ' |
Year of Incorporation | ' | '2007 |
Entity Incorporation, State Country Name | ' | 'Delaware |
Number of Boutiques in Operation | 446 | 446 |
Number of States in which Entity Operates | 45 | 45 |
Revenue Recognition, Gift Cards, Breakage | $0.10 | $0.40 |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Nov. 02, 2013 | Oct. 27, 2012 | Nov. 02, 2013 | Oct. 27, 2012 |
Numerator: | ' | ' | ' | ' |
Net income | $8,671 | $10,797 | $34,227 | $32,191 |
Denominator: | ' | ' | ' | ' |
Weighted-average common shares outstanding - basic (in shares) | 43,281 | 43,825 | 43,759 | 43,700 |
Options and other dilutive securities (in shares) | 712 | 1,086 | 841 | 1,091 |
Weighted-average common shares outstanding - diluted (in shares) | 43,993 | 44,911 | 44,600 | 44,791 |
Per common share: | ' | ' | ' | ' |
Basic earnings per common share (in dollars per share) | $0.20 | $0.25 | $0.78 | $0.74 |
Diluted earnings per common share (in dollars per share) | $0.20 | $0.24 | $0.77 | $0.72 |
Earnings_Per_Share_Details_Tex
Earnings Per Share (Details Textual) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 02, 2013 | Oct. 27, 2012 | Nov. 02, 2013 | Oct. 27, 2012 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0.8 | 0.4 | 0.8 | 0.4 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) | 3 Months Ended | 9 Months Ended | ||
Nov. 02, 2013 | Oct. 27, 2012 | Nov. 02, 2013 | Oct. 27, 2012 | |
Income Taxes | ' | ' | ' | ' |
Effective Income Tax Rate | 39.70% | 39.10% | 39.40% | 39.20% |
Revolving_Credit_Facility_Deta
Revolving Credit Facility (Details Textual) (Revolving Credit Facility [Member], USD $) | 3 Months Ended | 9 Months Ended | |
In Millions, unless otherwise specified | Nov. 02, 2013 | Nov. 02, 2013 | Aug. 30, 2013 |
Revolving Credit Facility Details | ' | ' | ' |
Maximum Borrowing Capacity | ' | ' | $75 |
Availability for Letters of Credit | ' | ' | 10 |
Line of Credit Facility, Expiration Date | ' | 30-Aug-18 | ' |
Available Option to Increase Borrowing Capacity | ' | ' | 25 |
Amount Outstanding under the Revolving Credit Facility | $25 | $25 | ' |
Dividend Restrictions | ' | 'Francesca’s Collections is permitted to pay dividends to the extent it has available capacity in its investment basket (as defined in the Second Amended and Restated Credit Agreement), no default or event of default is continuing, certain procedural requirements have been satisfied and Francesca’s Collections is in pro forma compliance with a maximum secured leverage ratio. | ' |
Covenant Compliance | ' | 'As of November 2, 2013, Francesca’s Collections was in compliance with all covenants under the Second Amended and Restated Credit Agreement. | ' |
Interest Rate Terms | ' | 'The borrowings under the Second Amended and Restated Credit Agreement bear interest at a rate equal to an applicable margin plus, at the option of Francesca’s Collection’s, either (a) in the case of base rate borrowings, a rate equal to the highest of (1) the prime rate of Royal Bank of Canada, (2) the federal funds rate plus 1/2 of 1%, and (3) the LIBOR for an interest period of one month plus 1.00%, or (b) in the case of LIBOR borrowings, a rate equal to the LIBOR for the interest period relevant to such borrowing. | ' |
Average Interest Rate During The Period | 2.10% | ' | ' |
Base Rate Borrowings | ' | ' | ' |
Revolving Credit Facility Details | ' | ' | ' |
Percentage Added to Federal Funds Rate | 0.50% | ' | ' |
Percentage Added to One Month LIBOR Rate | 1.00% | ' | ' |
Base Rate Borrowings | Minimum [Member] | ' | ' | ' |
Revolving Credit Facility Details | ' | ' | ' |
Applicable Margin Rate | 0.75% | ' | ' |
Base Rate Borrowings | Maximum [Member] | ' | ' | ' |
Revolving Credit Facility Details | ' | ' | ' |
Applicable Margin Rate | 1.25% | ' | ' |
LIBOR Borrowings | Minimum [Member] | ' | ' | ' |
Revolving Credit Facility Details | ' | ' | ' |
Applicable Margin Rate | 1.75% | ' | ' |
LIBOR Borrowings | Maximum [Member] | ' | ' | ' |
Revolving Credit Facility Details | ' | ' | ' |
Applicable Margin Rate | 2.25% | ' | ' |
Stockbased_Compensation_Detail
Stock-based Compensation (Details) (USD $) | 9 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Nov. 02, 2013 |
Stock Options Rollfoward (in shares) | ' |
Outstanding (in shares) as of February 2, 2013 | 2,823 |
Options granted (in shares) | 73 |
Options exercised (in shares) | -442 |
Options forfeited or expired (in shares) | -42 |
Outstanding (in shares) as of November 2, 2013 | 2,412 |
Exercisable (in shares) at November 2, 2013 | 1,332 |
Weighted Average Exercise Price of Stock Options | ' |
Outstanding (in dollars per share) as of February 2, 2013 | $12.23 |
Options granted (in dollars per share) | $23.94 |
Options exercised (in dollars per share) | $3.26 |
Options forfeited or expired (in dollars per share) | $8.25 |
Outstanding (in dollars per share) as of November 2, 2013 | $14.29 |
Exercisable (in dollars per share) at November 2, 2013 | $9.41 |
Average Remaining Contractual Life and Intrinsic Value | ' |
Weighted Average Remaining Contractual Life, Outstanding (in years) as of November 2, 2013 | '7 years |
Weighted Average Remaining Contractual Life, Exercisable (in years) at November 2, 2013 | '7 years |
Aggregate Intrinsic Value, Outstanding (in dollars) as of November 2, 2013 | $17,282 |
Aggregate Intrinsic Value, Exercisable (in dollars) at November 2, 2013 | $13,234 |
Stockbased_Compensation_Detail1
Stock-based Compensation (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Nov. 02, 2013 | Oct. 27, 2012 | Nov. 02, 2013 | Oct. 27, 2012 |
Stock-based Compensation Additional Disclosures | ' | ' | ' | ' |
Stock-based Compensation | $1 | $1 | $3 | $2.70 |
Aggregate Intrinsic Value, Options exercised | ' | ' | 9.9 | ' |
Weighted Average Grant Date Fair Value of Options Granted During the Period (in dollars per share) | ' | ' | $13.82 | ' |
Unrecognized Compensation Costs Related to Non-vested Stock Options | $9.70 | ' | $9.70 | ' |
Weighted Average Period Over Which Unrecognized Compensation Costs Related to Non-vested Options will be Recognized | ' | ' | '3 years | ' |
Share_Repurchases_Details_Text
Share Repurchases (Details Textual) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 1 Months Ended |
Sep. 03, 2013 | Nov. 02, 2013 | Nov. 02, 2013 | Dec. 06, 2013 | |
Repurchases of Common Stock Subsequent to End of Period | ||||
Share Repurchases Additional Disclosures | ' | ' | ' | ' |
Stock Repurchase Program, Authorized Amount | $100,000,000 | ' | ' | ' |
Treasury Stock, Shares, Acquired | ' | 1,942,081 | ' | 371,100 |
Treasury Stock, Value, Acquired, Cost Method | ' | 36,900,000 | 36,926,000 | 7,000,000 |
Treasury Stock Acquired, Average Cost Per Share | ' | $19 | ' | $18.79 |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | ' | $63,100,000 | ' | ' |
Commitment_and_Contingencies_D
Commitment and Contingencies (Details) (USD $) | Nov. 02, 2013 |
In Thousands, unless otherwise specified | |
Schedule of Future Minimum Lease Payments | ' |
Remainder of 2013 | $6,878 |
2014 | 29,566 |
2015 | 29,549 |
2016 | 28,719 |
2017 | 27,321 |
Thereafter | 93,638 |
Total | $215,671 |