Francesca's Q2 sales down 50%, says pandemic raises doubt about ability to continue as 'going concern'

Francesca's Holdings Corp. shares rose 14% in premarket trade Thursday after the specialty retailer said it's seeing some bright spots after reopening 593 of its 703 boutiques as states lift restrictions on movement imposed during the coronavirus pandemic. However, the Houston-based company said second-quarter sales are down 50% to $43.8 million and the crisis is hurting results, cash flows and disrupting its supply chain. The resulting impact "continues to raise substantial doubt about its ability to continue as a going concern," the company said in a statement. "Management continues to take aggressive and prudent actions to reduce expenses to preserve cash on hand." Chief Executive Andrew Clarke said about half of the company's furloughed workers have been recalled and the company will continue to reopen boutiques as local mandates are lifted. The retailer had about $21 million in cash as of June 12, up from $14.3 million as of May 2. The company expects to delay the filing of its 10-Q for the quarter. Shares have fallen 65% in the year to date, while the S&P 500 has fallen 4%.

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