Francesca's Holdings Corporation (FRAN) has reported 39.46 percent jump in profit for the quarter ended Oct. 29, 2016. The company has earned $9.69 million, or $0.26 a share in the quarter, compared with $6.95 million, or $0.16 a share for the same period last year.     

Revenue during the quarter grew 15.18 percent to $119.47 million from $103.73 million in the previous year period. Gross margin for the quarter expanded 161 basis points over the previous year period to 48.24 percent. Total expenses were 86.81 percent of quarterly revenues, down from 89.32 percent for the same period last year. This has led to an improvement of 251 basis points in operating margin to 13.19 percent.

Operating income for the quarter was $15.76 million, compared with $11.08 million in the previous year period.

Steve Lawrence, president and chief executive officer stated, "We are very pleased with our third quarter results, as we achieved double digit growth in sales and EPS exceeded our expectations. Our strong performance was the result of a 7% comparable sales increase as well as better than expected gross profit margin and operating margin. We had a good start to the quarter with a successful back-to-school season and the strong trends continued in September and October as our merchandise and boutique experience resonated well with our guests. Looking ahead, we will continue to execute on our strategic initiatives and believe we are well-positioned for a successful holiday season and beyond."

For the fourth-quarter, Francesca's Holdings Corporation expects revenue to be in the range of $143 million to $148 million. The company projects diluted earnings per share to be in the range of $0.33 to $0.37.

For financial year 2016, Francesca's Holdings Corporation expects revenue to be in the range of $484 million to $489 million. The company projects diluted earnings per share to be in the range of $1.03 to $1.07.

The company has spent $18.66 million cash to meet investing activities during the nine month period as against cash outgo of $19.84 million in the last year period.

The company has spent $48.31 million cash to carry out financing activities during the nine month period as against cash outgo of $7.58 million in the last year period.

Cash and cash equivalents stood at $24.72 million as on Oct. 29, 2016, down 41.15 percent or $17.29 million from $42.02 million on Oct. 31, 2015.

Working capital drops significantly
Francesca's Holdings Corporation has witnessed a decline in the working capital over the last year. It stood at $55.99 million as at Oct. 29, 2016, down 25.93 percent or $19.60 million from $75.59 million on Oct. 31, 2015. Current ratio was at 2.69 as on Oct. 29, 2016, down from 3.46 on Oct. 31, 2015.

Cash conversion cycle (CCC) has decreased to 16 days for the quarter from 47 days for the last year period. Days sales outstanding went down to 7 days for the quarter compared with 8 days for the same period last year.

Days inventory outstanding has decreased to 31 days for the quarter compared with 64 days for the previous year period. At the same time, days payable outstanding went down to 22 days for the quarter from 24 for the same period last year.