Francesca’s shares slide premarket as retailer says it’s exploring options, sees doubt it can continue as going concern

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Houston-based retailer Francesca’s Holdings Corp. said Tuesday it is exploring its strategic options after the pandemic hurt its business, and said there is substantial doubt it can continue as a going concern. “During this review, we will continue to move forward operating the business while maintaining disciplined inventory and cost management,” Chief Executive Andrew Clarke said in a statement. The company had a net loss of $17.2 million, or $5.80 a share, in its fiscal second quarter to Aug. 1, after net income of $1.8 million, or 61 cents a share, in the year-earlier period. Sales fell 29% to $75.7 million, as stores were closed in California and elsewhere during the pandemic. There are no FactSet consensus numbers. The company ended the quarter with $20.2 million in cash and $12.1 million of borrowings. “The COVID-19 pandemic has and continues to result in an overall disruption in the company’s operations and supply chain,” the company said in a statement. “As a result, the company’s revenues, results of operations and cash flows continue to be materially adversely impacted which raises substantial doubt about the company’s ability to continue as going concern.” Shares were down 13% premarket and have fallen 51% in the year to date, while the S&P 500 has gained 4.7%.
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