Francesca's Holdings Corporation (NASDAQ:FRAN) was founded in 1999 and is headquartered in Houston, Texas. Francesca's Holdings operates a chain of retail boutiques in the United States. The retail boutiques of Francesca's Holdings offer apparel, jewelry, accessories, and gifts to female customers. As of April 2, 2011, Francesca's Holdings operated 236 boutiques in 38 states. Francesca's Holdings also sells its products through e-commerce Website, francescascollections.com.
Francesca's Holdings Corporation yesterday announced financial results for the fiscal second quarter and year-to-date period ended July 30, 2011. For the fiscal second quarter ended July 30, 2011. Net sales increased 47.2% to $51.2 million from $34.8 million in the same prior year period. Comparable boutique sales increased by 5.4% following an increase of 11.2% in the same prior year period. Gross margin was 52.7% compared to 54.0% in the prior year second quarter. Product margin was maintained at the same level as the prior year period. Boutique occupancy costs increased principally as our growing number of mall locations resulted in higher depreciation expense and common area maintenance costs. Income from Operations grew 29.8% and was 24.6% as a percentage of net sales compared to 27.9% in the same prior year period. The change from the prior year period reflected higher selling, general and administrative costs related to professional fees, IT related expenses, and boutique payroll costs.
Interest expense was $2.0 million or $0.03 per diluted share. Francesca's Holdings had no interest expense and no outstanding debt during the same prior year period. Net income was $5.5 million, or $0.13 per diluted share based upon 41.5 million weighted average shares outstanding. Adjusted net income was $6.5 million, or $0.15 per diluted share excluding a $1.6 million pretax or $0.02 per diluted share charge for the early extinguishment of debt under Francesca's Holdings' prior secured credit facility. This compares to net income of $5.9 million, or $0.14 per fully diluted share based on 40.7 million weighted average shares outstanding for the same period in fiscal year 2010. The Company opened 30 new boutiques during the second quarter. At July 30, 2011 the Company operated 279 locations compared to 197 at the end of the same prior year period.