|Company Name:||Francesca's Holdings Corp|
|Event Title:||Q2 2013 Earnings Call Transcript|
|Event Time:||08:30 AM ET|
Good day, ladies and gentlemen thank you for standing by. Welcome to the Francesca's Holdings Corporation's Second Quarter 2013 Earnings Conference Call. As a reminder today's conference is being recorded. At this time all participants are in a listen-only mode, following the presentation we will conduct a question-and-answer session, instructions will be provided at that time for you to queue up for questions.
I would now like to turn the conference over to Ms. Randi Sonenshein, Investor Relations with ICR. Please go ahead.
Vice President, Finance and Investor Relations
Good morning and welcome to Francesca's second quarter fiscal 2013 conference call. Earlier this morning the company issued a press release outlining the financial and operating results for the second quarter ending August 3rd, 2013. Following discussions may include forward-looking statements. Please note that actual results may differ materially from those statements.
Additional information concerning factors that could cause actual results to differ materially from projected results is contained in the company's filings with the Securities and Exchange Commission. We will begin today's call with Neill Davis, our Chief Executive Officer, who will comment on our second quarter performance and strategic initiatives. Mark Vendetti, our Chief Financial Officer will then provide financial highlights of the second quarter as well as details of our financial outlook for the third quarter and fiscal year 2013. Also included on the call is Theresa Backes our President and Chief Operating Officer.
Following prepared remarks we will be pleased to address your questions. As usual the test of today's conference call along with detailed management commentary will be posted to our corporate website.
I will now turn the call over to Neill.
Neill P. Davis
Chief Executive Officer, Board Member
Thanks for the introduction Randi and good morning. While total sales and earnings per share in the second quarter increased 17% and 18% respectively and for the first half of the year, increased 22% and 19% respectively. Our performance for the second quarter did not meet our expectations.
We experienced a strong start to the quarter and gain momentum through mid June. However, traffic trends slowed and remained challenged throughout July which has continued into August.
Our second quarter comparable sales transactions which is a proxy for traffic decreased approximately 4%. However, this decline was largely mitigated by 3% increase and average transaction values. As gains in our unit sold per transaction offset promotionally decline and average retails. In terms of our merchandise categories jewelry continued to deliver the strongest performance followed by accessories and apparel.
Our guess assortment which represents 9% of total sales was the most challenge declining on the comparable basis in the mid-teens as a matter of fact that category itself created a 2% comp drag on the chain wide hole. In apparel we are pleased that the performance in dresses which represents approximately 40% of our payroll categories improved from the first quarter. However our fashion tops business which is also a big component of apparel business was soft given our under representation of summer time wear silhouettes and fabrications.
During the quarter we have identified that our tops business to be more wear now in summary. However, the lead times to reorder prevented us from fully capturing the trend. In addition, there has not been a dominant fashion trend to drive and chase in apparel category this season.
We are on the strengths of differentiating factors of our business model is our duty to be dynamic with our merchandise assortment and quickly adjust our offerings to align with changing trends while offering great value. There are areas of opportunity we will be making, which we will be making updates for in the second half of the year. For instance, we're seeing strong trends and bottoms and we will be increasing penetration from 5% to 10% and creating a stronger relationship to fashion tops compared to last year's.