Stifel Boosts PT on Francesca's (FRAN) to $21; Notes Solid Start to Q4, Confident CEO Strategy

Stifel boosts its price target on Buy-rated Francesca's Holdings (Nasdaq: FRAN) from $18 to $21 following Q3 results and outlook issued earlier Tuesday.

Analyst Richard Jaffe noted the following key takeaways:

• Solid Start to 4Q - 4Q is off to a good start due to an appealing product assortment, more effective marketing and increased penetration from the e-commerce channel. Management expects 4Q comps of down low single digits to up low single digits versus a difficult comparison of +11% LY.
• New CEO’s Strategy – Steve Lawrence, the new CEO of FRAN, began in October. His near term objectives, which build upon the previous strategy, include: 1) developing a deeper connection with guests through more customer research and implementation of the new CRM program, 2) continuing investment in e-commerce which includes improved navigation around mobile, site experience and SKU expansion, 3) making strategic investments in systems and processes that better prepare the company for the future, 4) refining the real estate strategy with increased emphasis on remodels and refreshes, 5) improving inventory disciplines which includes better flow and refining the allocation process and 6) invigorating merchandising. It is evident that the strategy has driven the improvement in results and we anticipate it will continue to do so in 4Q and beyond.
• Well Managed Inventory Levels – The company ended with inventory per store down 10% at the end of 3Q. Management plans to continue tightly managing inventory levels to ensure newness in the assortment and to minimize the need for significant promotional activity. Additionally, we believe the company has the ability to chase merchandise if sales prove stronger than expected.

For an analyst ratings summary and ratings history on Francesca\'s Holdings click here. For more ratings news on Francesca\'s Holdings click here.

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