10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended May 4, 2013

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From              to             

Commission File Number: 001-35239

FRANCESCA’S HOLDINGS CORPORATION

(Exact name of registrant as specified in its charter)

Delaware	20-8874704
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

8760 Clay Road Houston, TX	77080
(Address of principal executive offices)	(Zip Code)

(713) 864-1358

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x	Accelerated filer¨
Non-accelerated filer¨  (Do not check if a smaller reporting company)	Smaller reporting company¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ¨    No x

The registrant had 44,023,026 shares of its common stock outstanding as of May 31, 2013.

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheets as of May 4, 2013, February 2, 2013 and April 28, 2012	3
	Unaudited Consolidated Statements of Operations for the Thirteen Weeks Ended May 4, 2013 and April 28, 2012	4
	Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the Thirteen Weeks ended May 4, 2013	5
	Unaudited Consolidated Statements of Cash Flows for the Thirteen Weeks Ended May 4, 2013 and April 28, 2012	6
	Notes to the Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17
Item 4.	Controls and Procedures	17
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	18
Item 1A.	Risk Factors	18
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Default Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Francesca’s Holdings Corporation

Unaudited Consolidated Balance Sheets

(In thousands)

	May 4, 2013			February 2, 2013			April 28, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	33,763		$	29,877		$	8,221
Accounts receivable		7,645			2,504			6,479
Inventories		23,330			19,049			17,642
Deferred income taxes		3,567			3,506			2,456
Prepaid expenses and other current assets		4,772			4,749			3,248
Total current assets		73,077			59,685			38,046
Property and equipment, net		55,729			49,559			38,205
Deferred income taxes		2,893			2,357			2,200
Other assets, net		1,383			1,573			2,069
TOTAL ASSETS	$	133,082		$	113,174		$	80,520
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,623		$	8,358		$	10,077
Accrued liabilities		14,010			10,667			11,458
Total current liabilities		22,633			19,025			21,535
Deferred and accrued rents		26,151			22,092			19,245
Long-term debt		—			—			12,000
Total liabilities		48,784			41,117			52,780
Commitments and contingencies
Stockholders’ equity:
Common stock - $.01 par value, 80.0 million shares authorized; 44.0 million shares issued and outstanding at May 4, 2013; 43.9 million shares issued and outstanding at February 2, 2013; 43.6 million shares issued and outstanding at April 28, 2012.		440			439			436
Additional paid-in capital		86,464			85,161			79,166
Accumulated deficit		(2,606	)		(13,543	)		(51,862	)
Total stockholders’ equity		84,298			72,057			27,740
Total liabilities and stockholders’ equity	$	133,082		$	113,174		$	80,520

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

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Francesca’s Holdings Corporation

Unaudited Consolidated Statements of Operations

(In thousands, except per share data)

	Thirteen Weeks Ended
	May 4, 2013			April 28, 2012
Net sales	$	78,987		$	61,322
Cost of goods sold and occupancy costs		37,615			28,779
Gross profit		41,372			32,543
Selling, general and administrative expenses		23,351			17,885
Income from operations		18,021			14,658
Interest expense		(116	)		(255	)
Other income		83			37
Income before income tax expense		17,988			14,440
Income tax expense		7,051			5,698
Net income	$	10,937		$	8,742
Basic earnings per common share	$	0.25		$	0.20
Diluted earnings per common share	$	0.24		$	0.20
Weighted average shares outstanding:
Basic shares		43,939			43,573
Diluted shares		44,880			44,702

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

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Francesca’s Holdings Corporation

Unaudited Consolidated Statement of Changes in Stockholders’ Equity

(In thousands)

	Common Stock				Additional					Total
	Shares Outstanding		Par Value		Paid-in Capital		Accumulated Deficit			Stockholders’ Equity
Balance, February 2, 2013		43,880	$	439	$	85,161	$	(13,543	)	$	72,057
Net income		—		—		—		10,937			10,937
Stock-based compensation		—		—		990		—			990
Stock options exercised and related tax benefit		143		1		313		—			314
Balance, May 4, 2013		44,023	$	440	$	86,464	$	(2,606	)	$	84,298

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

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Francesca’s Holdings Corporation

Unaudited Consolidated Statements of Cash Flows

(In thousands)

	Thirteen Weeks Ended
	May 4, 2013			April 28, 2012
Cash Flows From Operating Activities:
Net income	$	10,937		$	8,742
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		2,237			1,607
Stock-based compensation expense		990			734
Excess tax benefit from stock-based compensation		(2,373	)		(1,014	)
Loss on sale of assets		110			7
Amortization of debt issuance costs		73			73
Deferred income taxes		(597	)		(1,352	)
Changes in assets and liabilities:
Accounts receivable		(5,141	)		(4,045	)
Inventories		(4,281	)		(3,180	)
Prepaid expenses and other assets		93			(245	)
Accounts payable		265			1,172
Accrued liabilities		5,717			2,579
Deferred and accrued rents		4,059			4,355
Net cash provided by operating activities		12,089			9,433
Cash Flows Used in Investing Activities:
Purchase of property and equipment		(8,517	)		(6,620	)
Net cash used in investing activities		(8,517	)		(6,620	)
Cash Flows Provided by (Used in) Financing Activities:
Repayments of borrowings under the revolving credit facility		—			(10,000	)
Proceeds from the exercise of stock options		221			348
Taxes paid related to net settlement of equity awards		(2,280	)		—
Excess tax benefit from stock-based compensation		2,373			1,014
Net cash provided by (used in) financing activities		314			(8,638	)
Net increase (decrease) in cash and cash equivalents		3,886			(5,825	)
Cash and cash equivalents, beginning of year		29,877			14,046
Cash and cash equivalents, end of period	$	33,763		$	8,221
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes	$	2,372		$	4,661
Interest paid	$	40		$	210

The accompanying notes are an integral part of these Unaudited Consolidated Financial Statements.

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Francesca’s Holdings Corporation

Notes to Unaudited Consolidated Financial Statements

1. Summary of Significant Accounting Policies

Nature of Business

Francesca’s Holdings Corporation (the “Company”) is a holding company incorporated in 2007 under the laws of the State of Delaware. The Company’s business operations are conducted through its wholly-owned indirect subsidiary Francesca’s Collections, Inc. (“Francesca’s Collections”), a corporation formed and existing under the laws of the State of Texas. Francesca’s Collections is wholly-owned by Francesca’s LLC (the “Parent”), a limited liability company formed and existing under the laws of the State of Delaware. Parent is a wholly-owned subsidiary of the Company.

The Company operates a national chain of retail locations designed and merchandised to feel like independently owned, upscale boutiques and provide its customers with an inviting, intimate and fun shopping experience. The Company offers a diverse and uniquely balanced mix of apparel, jewelry, accessories and gifts at attractive prices. At May 4, 2013, the Company operated 416 boutiques, which are located in 44 states throughout the United States, and its direct-to-consumer website.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. The financial information as of February 2, 2013 was derived from the Company’s audited consolidated financial statements and notes thereto as of and for the fiscal year ending February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

Due to seasonal variations in the retail industry, interim results are not necessarily indicative of results that may be expected for any other interim period or for a full year.

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Fiscal Year

The Company maintains its accounts on a 52- or 53-week year ending on the Saturday closest to January 31st. Fiscal year 2013 is a 52-week year while fiscal year 2012 was a 53-week year. The fiscal quarters ended May 4, 2013 and April 28, 2012 refer to the thirteen-week periods ended as of those dates.

Reclassifications

Certain prior year amounts have been reclassified to facilitate comparability with the current year presentation. These reclassifications did not impact the Company’s results of operations in any periods presented.

Gift Cards and Gift Card Breakage

The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. During the first quarter of fiscal year 2013, the Company accumulated sufficient historical information to estimate the rate of gift card breakage. Based on this historical information, the Company recognized $0.3 million of gift card breakage income during the thirteen weeks ended May 4, 2013. The gift card breakage income is included in net sales.

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Francesca’s Holdings Corporation

Notes to Unaudited Consolidated Financial Statements

Management Estimates and Assumption

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, net of estimated sales return, and expenses during the reporting periods. Actual results could differ from those estimates.

2. Earnings Per Share

Basic earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of stock options and restricted stock grants using the treasury stock method.

The following table summarizes the potential dilution that could occur if options to acquire common stock were exercised or if the restricted stock grants have fully vested and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 4, 2013		April 28, 2012
	(in thousands, except per share data)
Numerator:
Net income	$	10,937	$	8,742
Denominator:
Weighted-average common shares outstanding - basic		43,939		43,573
Options and other dilutive securities		941		1,129
Weighted-average common shares outstanding - diluted		44,880		44,702
Per common share:
Basic earnings per common share	$	0.25	$	0.20
Diluted earnings per common share	$	0.24	$	0.20

Stock options to purchase common stock in the amount of 0.8 million shares and 0.1 million shares in the thirteen weeks ended May 4, 2013 and April 28, 2012, respectively, were not included in the computation of diluted earnings per share due to their anti-dilutive effect.

3. Fair value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities, which includes cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximated their fair values due to the short term nature of these financial assets and liabilities.

4. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate. The effective income tax rates for the thirteen weeks ended May 4, 2013 and April 28, 2012 were 39.2% and 39.5%, respectively. The difference between our effective tax rate and statutory rate primarily relates to state taxes.

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Francesca’s Holdings Corporation

Notes to Unaudited Consolidated Financial Statements

5. Revolving Credit Facility

On July 27, 2011, Francesca’s Collections, Inc. (the “Borrower”) entered into an Amended and Restated Credit Agreement with Royal Bank of Canada, as Administrative Agent, and KeyBank National Association, as Syndication Agent, which provided $65.0 million of revolving credit facility (including borrowing capacity available for letters of credit). The revolving credit facility is scheduled to terminate on July 27, 2016. On May 4, 2013, no amounts were outstanding under the revolving credit facility.

All obligations under the revolving credit facility are unconditionally guaranteed by, subject to certain exceptions, Parent and each of Borrower’s existing and future direct and indirect wholly owned domestic subsidiaries. All obligations under the revolving credit facility, and the guarantees of those obligations (as well as cash management obligations and any interest rate hedging or other swap agreements), are secured by substantially all of the Borrower’s assets as well as the assets of each subsidiary guarantor.

The borrowings under the revolving credit facility bear interest at a rate equal to an applicable margin plus, at the Company’s option, either (a) in the case of base rate borrowings, a rate equal to the highest of (i) the prime rate of Royal Bank of Canada, (ii) the federal funds rate plus 1/2 of 1% and (iii) the LIBOR for an interest period of one month plus 1.00%; or (b) in the case of LIBOR borrowings, a rate equal to the higher of (i) 1.50% and (ii) the LIBOR for the interest period relevant to such borrowing. The applicable margin for borrowings under the revolving credit facility ranges from 1.25% to 2.25% with respect to base rate borrowings and from 2.25% to 3.25% with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. Additionally, the Borrower is required to pay a fee to the lenders under the revolving credit facility on the unused amount at a rate ranging from 0.25% to 0.45%, based on the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. The Borrower is also required to pay customary letter of credit fees.

The revolving credit facility requires the Borrower to maintain a maximum consolidated total lease adjusted leverage ratio and a minimum consolidated interest coverage ratio, in each case, on the last day of any fiscal quarter and includes a maximum capital expenditure in any fiscal year. The Borrower’s ability to pay dividends to the Company is subject to restrictions including a maximum secured leverage ratio. If the Borrower’s debt under the revolving credit facility exceeds that ratio, it is restricted from paying dividends. At May 4, 2013, this ratio was within the required limit, thus, the Borrower would have been allowed to pay dividends.

The Borrower is in compliance with the debt covenants of its revolving credit facility as of May 4, 2013.

6. Stock-based Compensation

Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest. The stock-based compensation cost recognized in the thirteen weeks ended May 4, 2013 and April 28, 2012 totaled $1.0 million and $0.7 million, respectively.

Stock Options

The following table presents stock options granted, exercised, expired and aggregate intrinsic value under the existing Stock Plans for the thirteen weeks ended May 4, 2013.  

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)			(Per share)		(In Years)		(In thousands)
Outstanding as of February 2, 2013		2,823		$	12.23
Options granted		24			26.81
Options exercised		(228	)		2.22
Options forfeited or expired		—			—
Outstanding as of May 4, 2013		2,619		$	13.24		8	$	39,649
Exercisable at May 4, 2013		1,354		$	6.66		7	$	28,851

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Francesca’s Holdings Corporation

Notes to Unaudited Consolidated Financial Statements

During the thirteen weeks ended May 4, 2013, the intrinsic value of stock options exercised totaled $6.3 million while stock options were granted at a weighted average grant date fair value of $15.28. The number of options exercised in the above table includes shares withheld to satisfy certain employees’ obligation for exercise price and minimum statutory withholding requirements.

As of May 4, 2013 there was approximately $11.2 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted-average period of three years.

7. Commitment and Contingencies

Operating Leases

The Company leases boutique space and office space under operating leases expiring in various years through the fiscal year ending 2025. Certain of the leases provide that the Company may cancel the lease, with penalties as defined in the lease, if the Company’s boutique sales at that location fall below an established level. Certain leases provide for additional rent payments to be made when sales exceed a base amount. Certain operating leases provide for renewal options for periods from three to five years at their fair rental value at the time of renewal.

Minimum future rental payments under non-cancellable operating leases as of May 4, 2013, are approximately as follows:

Fiscal year	Amount
	(In thousands)
Remainder of 2013	$	19,557
2014		25,897
2015		25,223
2016		24,371
2017		23,009
Thereafter		75,541
	$	193,598

Legal Proceedings

From time to time, the Company is subject to various claims and legal proceedings arising in the ordinary course of business. While the outcome of any such claim cannot be predicted with certainty, in the opinion of management, the outcome of these matters will not have a material adverse effect on the Company’s business, results of operations or financial conditions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements concerning our business, operations and financial performance and condition as well as our plans, objectives and expectations for our business operations and financial performance and condition, which are subject to risks and uncertainties. All statements other than statements of historical fact included in this report are forward-looking statements. These statements may include words such as “aim”, “anticipate”, “assume”, “believe”, “can have”, “could”, “due”, “estimate”, “expect”, “goal”, “intend”, “likely”, “may”, “objective”, “plan”, “potential”, “positioned”, “predict”, “should”, “target”, “will”, “would” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events or trends. For example, all statements we make relating to our estimated and projected earnings, sales, costs, expenditures, cash flows, growth rates, market share and financial results, our plans and objectives for future operations, growth or initiatives, strategies or the expected outcome or impact of pending or threatened litigation are forward-looking statements.

These forward-looking statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in many cases beyond our control. All of our forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from our expectations. Factors that may cause such differences include, but are not limited to, the risks described under “Item 1A. Risk Factors,” in our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 and filed with the Securities and Exchange Commission (“SEC”) on March 22, 2013.

We derive many of our forward-looking statements from our own operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements contained in this report as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

Potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on the forward-looking statements. These forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update or revise any forward-looking statements publicly whether as a result of new information, future developments or otherwise.

Overview

francesca’s^® is a growing specialty retailer with retail locations designed and merchandised to feel like independently owned, upscale boutiques providing customers a fun and differentiated shopping experience. The merchandise assortment is a diverse and balanced mix of apparel, jewelry, accessories and gifts. As of May 4, 2013, francesca’s^® operated 416 boutiques in 44 states and also served its customers through www.francescas.com.

Our net sales increased 29% to $79.0 million in the thirteen weeks ended May 4, 2013 from $61.3 million in the thirteen weeks ended April 28, 2012. Over the same period, income from operations increased by 23% to $18.0 million from $14.7 million in the prior year. Net income increased 25% to $10.9 million, or $0.24 per diluted share, in the first quarter of fiscal year 2013 compared to net income of $8.7 million, or $0.20 per diluted share, in the first quarter of fiscal year 2012.

The 53rd week in fiscal 2012 caused a one-week shift in our 2013 fiscal calendar, resulting in the first quarter of fiscal year 2013 being later by one week relative to the quarter-ending date last fiscal year (“retail calendar shift”). If there are seasonal influences near quarter-end dates, year-over-year comparisons may be impacted by the retail calendar shift. Our reported comparable sales results for fiscal 2012 are being adjusted for the retail calendar shift. Accordingly, our comparable sales results for the thirteen weeks ended May 4, 2013 are compared with our comparable sales results for the thirteen weeks ended May 5, 2012.

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We have increased our boutique count to 416 boutiques in 44 states as of May 4, 2013 from 360 boutiques in 44 states as of April 28, 2012. To complete our planned boutique openings for the fiscal year 2013, we plan to open 29 boutiques for the remainder of the fiscal year.

Results of Operations

The following represents operating data for the thirteen weeks ended May 4, 2013 and April 28, 2012.

	Thirteen Weeks Ended
	May 4, 2013			April 28, 2012
Comparable sales growth for period(1)		2	%		16	%
Number of boutiques open at end of period		416			327
Net sales per average square foot for period (not in thousands)(2)	$	148		$	144
Average square feet per boutique (not in thousands)(3)		1,368			1,390
Total gross square feet at end of period (in thousands)		569			455

(1) A boutique is included in comparable sales on the first day of the fifteenth full month following the boutique’s opening. When a boutique that is included in comparable sales is relocated, we continue to consider sales from that boutique to be comparable sales. If a boutique is closed for thirty days or longer for a remodel or as a result of weather damage, fire or the like, we no longer consider sales from that boutique to be comparable sales. Beginning in the first quarter of fiscal year 2013, comparable sales results include our direct-to-consumer sales. To facilitate comparability with the prior year period, prior year comparable sales growth was recalculated and now includes direct-to-consumer sales growth. Due to the retail calendar shift, comparable sales results for the thirteen weeks ended May 4, 2013 are compared with comparable sales results for thirteen weeks ended May 5, 2012.

(2) Net sales per average square foot are calculated by dividing net sales for the period by the average square feet during the period. Because of our rapid growth, for purposes of providing net sales per square foot measure, we use average square feet during the period as opposed to total gross square feet at the end of the period. For individual quarterly periods, average square feet is calculated as (a) the sum of total gross square feet at the beginning and end of the period, divided by (b) two. There may be variations in the way in which some of our competitors and other retailers calculate sales per square foot or similarly titled measures. As a result, average square feet and net sales per average square foot for the period may not be comparable to similar data made available by other retailers.  

(3) Average square feet per boutique is calculated by dividing total gross square feet at the end of the period by the number of boutiques at the end of the period.

Boutique Count

The following table summarizes the number of boutiques open at the beginning and end of the periods indicated.

	Thirteen Weeks Ended
	May 4, 2013		April 28, 2012
Number of boutiques open at beginning of period		360		283
Boutiques added		56		44
Number of boutiques open at the end of period		416		327

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Thirteen Weeks Ended May 4, 2013 Compared to Thirteen Weeks Ended April 28, 2012

	Thirteen Weeks Ended
	May 4, 2013						April 28, 2012						Variance
	In Dollars			As a % of Net Sales(1)			In Dollars			As a% of Net Sales(1)			In Dollars		%			As a % of Net Sales(1)
Net sales	$	78,987			100.0	%	$	61,322			100.0	%	$	17,665		29	%		0.0	%
Cost of goods sold and occupancy costs		37,615			47.6	%		28,779			46.9	%		8,836		31	%		0.7	%
Gross profit		41,372			52.4	%		32,543			53.1	%		8,829		27	%		(0.7	)%
Selling, general and administrative expenses		23,351			29.6	%		17,885			29.2	%		5,466		31	%		0.4	%
Income from operations		18,021			22.8	%		14,658			23.9	%		3,363		23	%		(1.1	)%
Interest expense		(116	)		(0.1	)%		(255	)		(0.4	)%		139		(55	)%		0.3	%
Other income		83			0.1	%		37			0.1	%		46		124	%		0.0	%
Income before income tax expense		17,988			22.8	%		14,440			23.5	%		3,548		25	%		(0.7	)%
Income tax expense		7,051			8.9	%		5,698			9.3	%		1,353		24	%		(0.4	)%
Net income	$	10,937			13.8	%	$	8,742			14.3	%	$	2,195		25	%		(0.5	)%

⁽¹⁾ Percentage totals in the above tables may not equal the sum of the components due to rounding.

Net Sales

Net sales increased 29% to $79.0 million in the thirteen weeks ended May 4, 2013 from $61.3 million in the thirteen weeks ended April 28, 2012. This increase is attributable to the increase in non-comparable sales, which in turn is due to the increase in the number of boutiques in operation in the first quarter of fiscal year 2013 as compared to the first quarter of fiscal year 2012. Our comparable sales increased 2% when compared to the prior year period. Our comparable sales results were driven by the increase in direct-to-consumer sales. There were 283 comparable boutiques and 133 non-comparable boutiques open at May 4, 2013 compared to 207 and 120, respectively, at April 28, 2012.

Cost of Goods Sold and Occupancy Costs

Cost of goods sold and occupancy costs increased 31% to $37.6 million in the thirteen weeks ended May 4, 2013 from $28.8 million in the thirteen weeks ended April 28, 2012. Cost of merchandise increased by $6.5 million driven by the increased sales volume. Occupancy costs increased by $2.4 million due to the increase in the number of boutiques in operation during the thirteen weeks ended May 4, 2013 compared to the same period of the prior year. As a percentage of net sales, cost of goods sold and occupancy costs increased to 47.6% in the thirteen weeks ended May 4, 2013 from 46.9% in the thirteen weeks ended April 28, 2012. This unfavorable variance was due to lower merchandise margins. Our merchandise margins were lower in the current year period versus last year primarily due to increased level of promotions offered in a more competitive general promotional environment.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased 31% to $23.4 million in the thirteen weeks ended May 4, 2013 from $17.9 million in the thirteen weeks ended April 28, 2012. As a percentage of net sales, selling, general and administrative expense increased to 29.6% in the thirteen weeks ended May 4, 2013 as compared to 29.2% in the thirteen weeks ended April 28, 2012.

Selling expenses increased by $3.2 million due to the increase in the number of boutiques in operation in first quarter of fiscal year 2013 as compared to first quarter of fiscal year 2012. As a percentage of net sales, selling expenses increased by 0.3% due to deleverage in fixed boutique expenses.

General and administrative expenses increased by $2.3 million primarily due to the cost of additional employees hired at the corporate office and investments in technology to support the larger boutique base and sales growth. As a percentage of net sales, general and administrative expenses was consistent with the prior year period.

Income Tax Expense

The increase in provision for income taxes of $1.4 million in the thirteen weeks ended May 4, 2013 compared to the thirteen weeks ended April 28, 2012 was primarily due to the increase in pre-tax income. The effective tax rate of 39.2% in the thirteen weeks ended May 4, 2013 was comparable to the effective tax rate of 39.5% in the thirteen weeks ended April 28, 2012.

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Sales by Merchandise Category

	Thirteen Weeks Ended
	May 4, 2013					April 28, 2012
	In Dollars		As a % of Net Sales			In Dollars			As a % of Net Sales
	(in thousands, except percentages)
Apparel	$	39,849		50.4	%	$	32,874			53.6	%
Jewelry		18,981		24.0	%		12,909			21.1	%
Accessories		12,614		16.0	%		9,865			16.1	%
Gifts		7,229		9.2	%		6,031			9.8	%
Merchandise sales		78,674		99.6	%		61,679			100.6	%
Other(1)		313		0.4	%		(357	)		(0.6	)%
Net sales	$	78,987		100.0	%	$	61,322			100.0	%

⁽¹⁾ Includes gift card breakage income, shipping and change in return reserve.

Liquidity and Capital Resources

Our primary sources of liquidity are cash flows from operations and borrowings under our revolving credit facility. Our primary cash needs are for capital expenditures in connection with opening new boutiques and remodeling existing boutiques, investing in improved technology and distribution facility enhancements, funding normal working capital requirements and payments of interest and principal, if any, under our revolving credit facility. We also occasionally use cash or our credit facility to issue letters of credit to support merchandise imports or for other corporate purposes. The most significant components of our working capital are cash and cash equivalents, merchandise inventories, accounts payable and other current liabilities. Our working capital position benefits from the fact that we generally collect cash from sales to customers the day of or, in the case of credit or debit card transactions, within several days of the related sales and we typically have up to 30 days to pay our vendors.  

We were in compliance with all covenants under our revolving credit facility as of May 4, 2013. On May 4, 2013, we had $33.8 million of cash and cash equivalents and $65.0 million in borrowing availability under our revolving credit facility. There were no letters of credit outstanding at May 4, 2013.

We expect that our cash flow from operations along with borrowings under our revolving credit facility and tenant allowances for new boutiques will be sufficient to fund capital expenditures and our working capital requirements for, at least, the next twelve months.

Cash Flow

A summary of our operating, investing and financing activities are shown in the following table:

	Thirteen Weeks Ended
	May 4, 2013			April 28, 2012
	(In thousands)
Provided by operating activities	$	12,089		$	9,433
Used in investing activities		(8,517	)		(6,620	)
Provided by (used in) financing activities		314			(8,638	)
Net increase (decrease) in cash and cash equivalents	$	3,886		$	(5,825	)

Operating Activities

Operating activities consist of net income adjusted for non-cash items, including depreciation and amortization, deferred taxes, the effect of working capital changes and tenant allowances received from landlords. Net cash provided by operating activities was $12.1 million and $9.4 million in each of the thirteen weeks ended May 4, 2013 and April 28, 2012, respectively. The increase in cash provided by operating activities in each of the periods was primarily due to higher net income as a result of significant sales growth as well as increases in accounts payable, accrued liabilities and deferred and accrued rents partially offset by increases in accounts receivable and inventory. These increases were due to the increase in the number of boutiques in operation from period to period.

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Investing Activities

Investing activities consist primarily of capital expenditures for new boutiques, improvements to existing boutiques, as well as investment in information technology and our distribution facility.

	Thirteen Weeks Ended
	May 4, 2013		April 28, 2012
	(In thousands)
Capital expenditures for:
New boutiques	$	7,350	$	5,884
Existing boutiques		337		101
Technology		627		280
Corporate and distribution		203		355
Net cash used in investing activities	$	8,517	$	6,620

Our total capital expenditures for the thirteen weeks ended May 4, 2013 and April 28, 2012 were $8.5 million and $6.6 million, respectively, with new boutiques accounting for most of our spending at $7.4 million and $5.9 million, respectively. Spending for new boutiques included amounts associated with boutiques that will open subsequent to the end of each fiscal quarter. We opened 56 boutiques in the thirteen weeks ended May 4, 2013 compared to 44 boutiques in the thirteen weeks ended April 28, 2012. The average cost of the leasehold improvements, equipment, furniture and fixtures, excluding tenant allowances, for new boutiques opened in the thirteen weeks ended May 4, 2013 and April 28, 2012 was $172,000 and $183,000, respectively. The decrease in average cost per new boutique was due to the reduction in construction costs. The average tenant allowance per new boutique in the thirteen weeks ended May 4, 2013 and April 28, 2012 was $72,000 and $94,000, respectively. Tenant allowances are amortized as a reduction in rent expense over the term of the lease. The average collection period for these allowances is approximately six months after boutique opening. As a result, we fund the cost of new boutiques with cash flow from operations, build-out allowances from our landlords, or borrowings under our revolving credit facility.We expect that our cash flow from operations along with borrowings under our revolving credit facility and tenant allowances for new boutiques will be sufficient to fund our capital expenditures for the rest of fiscal year 2013.

Management anticipates that capital expenditures for the remainder of fiscal year 2013 will be approximately $13.5 million to $16.5 million. The majority of this amount will be spent on new boutique leasehold improvements at approximately $7.2 million to $8.2 million. The remaining capital expenditures are expected to be used for our technology initiatives and investments in our existing boutiques as well as corporate office and distribution center enhancements.

Financing Activities

Financing activities consist of borrowings and payments under our revolving credit facility as well as proceeds from the exercise of stock options and the related tax consequence.

Net cash provided by financing activities was $0.3 million during the thirteen weeks ended May 4, 2013 compared to net cash used in financing activities of $8.6 million during the thirteen weeks ended April 28, 2012. The increase was due to principal payments on our revolving credit facility in the first quarter of fiscal year 2012 while no principal payments were made in the first quarter of fiscal year 2013.

Revolving Credit Facility

On July 27, 2011, Francesca’s Collections, Inc., (“Francesca’s Collections”) our indirect wholly-owned subsidiary, entered into a revolving credit facility with Royal Bank of Canada, as Administrative Agent, and KeyBank National Association, as Syndication agent, which provides $65.0 million of revolving credit facility (including borrowing capacity available for letters of credit). The revolving credit facility is scheduled to terminate on July 27, 2016. On May 4, 2013, there were no outstanding amounts under our revolving credit facility.

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All obligations under the revolving credit facility are unconditionally guaranteed by, subject to certain exceptions, Francesca’s LLC, our direct wholly-owned subsidiary and the parent of Francesca’s Collections and each of Francesca’s Collections’ existing and future direct and indirect wholly owned domestic subsidiaries. There are currently no subsidiary guarantors for the revolving credit facility because Francesca’s Collections does not currently have any subsidiaries. All obligations under the revolving credit facility, and the guarantees of those obligations (as well as cash management obligations and any interest rate hedging or other swap agreements), are secured by substantially all of Francesca’s Collections’ assets as well as the assets of any subsidiary guarantor.

The borrowings under the revolving credit facility bear interest at a rate equal to an applicable margin plus, at our option, either (a) in the case of base rate borrowings, a rate equal to the highest of (1) the prime rate of Royal Bank of Canada, (2) the federal funds rate plus 1/2 of 1%, and (3) the LIBOR for an interest period of one month plus 1.00%, or (b) in the case of LIBOR borrowings, a rate equal to the higher of (1) 1.50% and (2) the LIBOR for the interest period relevant to such borrowing. The applicable margin for borrowings under the revolving credit facility ranges from 1.25% to 2.25% with respect to base rate borrowings and from 2.25% to 3.25% with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of a ratio of consolidated total debt to consolidated EBITDA. Additionally, we are required to pay a fee to the lenders under the revolving credit facility on the un-borrowed amount at a rate ranging from 0.25% to 0.45%, based on the achievement of specified levels of a ratio of consolidated total debt to consolidated EBITDA. We are also required to pay customary letter of credit fees.

 The revolving credit facility contains customary affirmative and negative covenants, including limitations on the ability of Francesca’s Collections and its subsidiaries, to (i) incur additional debt; (ii) create liens; (iii) make certain investments, loans and advances; (iv) sell assets; (v) pay dividends or make distributions or make other restricted payments; (vi) prepay other indebtedness; (vii) engage in mergers or consolidations; (viii) change the business conducted by Francesca’s Collections and its subsidiaries; (ix) engage in certain transactions with affiliates; (x) enter into agreements that restrict dividends from subsidiaries; and (xi) amend certain charter documents and material agreements governing subordinated and junior indebtedness.

In addition, the revolving credit facility requires Francesca’s Collections to comply with the following financial covenants:

· A maximum ratio of (i) lease-adjusted consolidated total debt (as defined in the credit agreement) to (ii) consolidated EBITDA of 4.25 to 1.00.

· A minimum ratio of (i) consolidated EBITDA to (ii) interest expense of 4.00 to 1.00.

· Maximum capital expenditures of $25.0 million per fiscal year, with any unused portion allowed to be carried over to the next two fiscal years subject to a 50.0% cap.

We are in compliance with the financial covenants under our revolving credit facility as of May 4, 2013. Further, Francesca’s Collections’ ability to pay dividends is subject to restrictions including a maximum secured leverage ratio. If Francesca’s Collections’ debt under the revolving credit facility exceeds that ratio, it is restricted from paying dividends. At May 4, 2013, this ratio was within the required limit, thus, Francesca’s Collections would have been allowed to pay dividends.

The revolving credit facility also contains customary events of default, including: (i) failure to pay principal, interest, fees or other amounts under the revolving credit facility when due taking into account any applicable grace period; (ii) any representation or warranty proving to have been incorrect in any material respect when made; (iii) a cross default with respect to other material indebtedness; (iv) bankruptcy and insolvency events; (v) unsatisfied material final judgments; (vi) a “change of control”; (vii) certain defaults under the Employee Retirement Income Security Act of 1974; (viii) the invalidity or impairment of any loan document or any security interest; and (ix) the subordination provisions of any material subordinated debt or junior debt shall cease to be in full force.

Critical Accounting Policies

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as the related disclosures of contingent assets and liabilities at the date of the financial statements. A summary of the Company’s significant accounting policies is included in Note 1 to the Company’s annual consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2013 and filed with the SEC on March 22, 2013.

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Certain of the Company’s accounting policies and estimates are considered critical, as these policies and estimates are the most important to the depiction of the company’s consolidated financial statements and require significant, difficult, or complex judgments, often about the effect of matters that are inherently uncertain. Such policies are summarized in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 filed with the SEC on March 22, 2013. Except as set forth below, as of May 4, 2013, there were no significant changes to any of our critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 filed with the SEC on March 22,2013.

Gift Cards and Gift Card Breakage

The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. Based on historical information, the Company recognized $0.3 million of gift card breakage income during the thirteen weeks ended May 4, 2013. The gift card breakage income is included in net sales.

Contractual Obligations

There were no significant changes to our contractual obligations and commercial commitments as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 and filed with the SEC on March 22, 2013, other than those which occur in the normal course of business.

Off Balance Sheet Arrangements

We are not party to any off balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our principal exposure to market risk relates to changes in interest rates. Our revolving credit facility, if drawn upon, carries floating interest rates that are tied to LIBOR, the federal funds rate and the prime rate, and therefore, our statements of operations and our cash flows could be exposed to changes in interest rates. We do not use derivative financial instruments for speculative or trading purposes; however, this does not preclude our adoption of specific hedging strategies in the future. At May 4, 2013, there were no borrowings under our revolving credit facility.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

At the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our Disclosure Committee and management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures were effective as of May 4, 2013.

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There were no changes in our internal control over financial reporting during the quarter ended May 4, 2013 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.  

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are subject to various legal proceedings and claims, including employment claims, wage and hour claims, intellectual property claims, contractual and commercial disputes and other matters that arise in the ordinary course of business. While the outcome of these and other claims cannot be predicted with certainty, we do not believe that the outcome of these matters will have a material adverse effect on our business, results of operations or financial condition.

ITEM 1A. RISK FACTORS

There have been no material changes to our risk factors as previously disclosed in Item 1A contained in Part I of our Annual Report on Form 10-K for the fiscal year ended February 2, 2013 and filed with the SEC on March 22, 2013.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit No.	Description
10.1	Form of Lock-up Agreement (incorporated by reference to Exhibit 1.1 of Form 8-K filed by Francesca’s Holdings Corporation on March 29, 2013)
10.2┼	Employment Letter Agreement between Francesca’s Holdings Corporation and Sei Jin Alt dated December 28, 2012 (filed herewith)
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)
32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Unaudited Consolidated Balance Sheets as of May 4, 2013, February 2, 2013 and April 28, 2012, (22) the Unaudited Consolidated Statements of Operations for the thirteen weeks ended May 4, 2013 and April 28, 2012, (iii) Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the thirteen weeks ended May 4, 2013, (iv) Unaudited Consolidated Statements of Cash Flows for the thirteen weeks ended May 4, 2013 and April 28, 2012 and (v) the Notes to the Unaudited Consolidated Financial Statements.
┼	Indicates a management contract or compensatory plan or arrangement.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Francesca’s Holdings Corporation
	(Registrant)
Date:  June 7, 2013	/s/ Mark Vendetti
	Mark Vendetti
	Chief Financial Officer (duly authorized officer and Principal Financial and Accounting Officer)

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EX-10.2

Exhibit 10.2

FRANCESCA’S COLLECTIONS, INC.

December 28, 2012

Re: Employment Letter Agreement

Dear Sei Jin:

Subject to the terms and conditions of this letter agreement (this “Agreement”), Francesca’s Collections, Inc., a Texas corporation (the “Company”), desires to provide for your continued employment on the terms and conditions of this Agreement. This Agreement is effective as of January 1, 2013 (the “Effective Date”).

1.          Employment; Compensation and Benefits.

(a)          Position and Duties. You shall serve as the Company’s Chief Merchandising Officer, reporting to the Company’s Chief Executive Officer. During your Period of Employment (as defined below) with the Company, you agree to (i) devote substantially all of your business time, energy and skill to the performance of your duties for the Company, (ii) perform such duties in a faithful, effective and efficient manner and (iii) hold no other employment.

(b)          Period of Employment. The “Period of Employment” shall be a period of three (3) years commencing on the Effective Date and ending at the close of business on the third (3rd) anniversary of the Effective Date. Notwithstanding the foregoing, the Period of Employment is subject to earlier termination as provided in Section 2(a) of this Agreement.

(c)          Base Salary. Your base salary (the “Base Salary”) shall be at an annualized rate of Three Hundred and Fifty Thousand Dollars ($350,000.00) and shall be paid in accordance with the Company’s regular payroll practices in effect from time to time.

(d)          Annual Bonus. You may be eligible for an annual incentive bonus based on the Company’s annual bonus plan that may exist from time to time. Your target annual incentive bonus amount for a particular fiscal year of the Company during the Period of Employment shall equal Fifty Percent (50%) of your Base Salary for that fiscal year.

(e)          Retirement, Welfare and Fringe Benefits. During the Period of Employment you shall be entitled to participate in all employee savings and welfare benefit plans and programs, and fringe benefit plans and programs, made available by the Company to the Company’s employees generally, in accordance with the eligibility and participation provisions of such plans and as such plans or programs may be in effect from time to time.

(f)           Benefits Allowance. For each fiscal year during the Period of Employment, commencing on the date hereof, the Company shall provide you with an allowance of $20,000.00 to apply towards the purchase of additional benefits at your discretion. Such allowance shall be paid in equal monthly installments (unless a pro-rata payment is to be made) on the closest payroll date on or following the first day of each month of each calendar year, provided that you are employed with the Company on such date.

2.          Termination and Severance.

(a)          Termination. Your employment by the Company may be terminated by the Company: (i) immediately upon notice, with Cause (as defined below), or (ii) with no less than thirty (30) days’ advance written notice to you, without Cause, or (iii) immediately in the event of your Disability (as defined below) or your death. In the event that you are provided with notice of termination without Cause pursuant to clause (ii) above, the Company will have the option to place you on administrative leave during the notice period. You may terminate your employment by the Company for any reason with no less than thirty (30) days’ advance written notice to the Company. Any termination of your employment (by you or by the Company) must be communicated by written notice from the terminating party to the other party. Such notice of termination must be hand delivered (if to the Company, to the Company’s Chief Executive Officer) and must indicate the specific provision(s) of this Agreement relied upon in effecting the termination. The date your employment by the Company terminates is referred to herein as your “Severance Date.”

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(b)          Benefits upon Termination. Regardless of the reason for the termination of your employment with the Company, in connection with such termination the Company will pay you (on or within 30 days following your Severance Date) your accrued and unused vacation (if any) and you will be entitled to any benefits that are due to you under the Company’s 401(k) plan in accordance with the terms of that plan. If you hold any stock options or other equity or equity-based awards granted by the Company, the terms and conditions applicable to those awards will control as to the consequences of a termination of your employment on those awards. In addition to the foregoing, if your employment with the Company terminates as a result of a termination by the Company of your employment without Cause (as defined below), you will (subject to the other conditions set forth in Section 2(c) below) be entitled to the following benefits: the Company will pay you, subject to tax withholding and other authorized deductions, an aggregate amount equal to one (1) times your Base Salary as in effect on the Severance Date (the “Severance Benefit”). Subject to Section 5, the Company will pay this benefit to you in substantially equal installments (each in the applicable fraction of the aggregate benefit) in accordance with the Company’s standard payroll practices over a period of twelve (12) months, with the first installment payable in the month following the month in which your Separation from Service (as such term is defined below) occurs.

(c)          Conditions for Receipt of Severance Benefit. Notwithstanding anything to the contrary herein, if the Severance Benefit is otherwise due to you and, at any time, you breach any obligation under Section 6 of this Agreement, from and after the date of such breach and not in any way in limitation of any right or remedy otherwise available to the Company, you will no longer be entitled to, and the Company will no longer be obligated to pay, any remaining unpaid portion of the Severance Benefit. In addition, in order to receive any Severance Benefit, you must, upon or promptly following (and in all events, within twenty-one (21) days of, unless a longer period of time is required by applicable law) your Severance Date, provide the Company with a separation agreement which shall contain a valid, executed general release agreement in a form acceptable to the Company, and such release shall have not been revoked. You agree and acknowledge that such separation agreement may contain additional restrictive covenants, including, without limitation, non-solicitation covenants and non-disparagement covenants.

(d)          Exclusive Remedy. You agree that should your employment by the Company terminate for any reason, the payments and benefits contemplated by this Agreement with respect to the circumstances of such termination shall constitute the exclusive and sole remedy for any such termination of your employment and you agree not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment. You agree that, in the event of a termination of your employment, you are not and will not be entitled to severance benefits under any other agreement, plan, program, or policy of the Company.

3.          Certain Defined Terms. As used in this Agreement, the following terms shall be defined as follows:

(a)          “Cause” shall mean that one or more of the following has occurred: (i) you have committed a felony (under the laws of the United States or any relevant state, or a similar crime or offense under the applicable laws of any relevant foreign jurisdiction); (ii) you have engaged in acts of fraud, dishonesty or other acts of material misconduct in the course of your duties; (iii) your abuse of narcotics or alcohol that has or may reasonably harm the Company; (iv) any violation by you of the Company’s written policies; (v) your failure to perform or uphold your duties and/or you fail to comply with reasonable directives of the Company’s Chief Executive Officer or Board of Directors, as applicable; or (vi) any breach by you of any provision of Section 6, or any material breach by you of this Agreement or any other contract you are a party to with the Company.

(b)          “Disability” shall mean a physical or mental impairment which renders you unable to perform the essential functions of your employment with the Company, even with reasonable accommodation that does not impose an undue hardship on the Company, for more than 180 days in any 12-month period, unless a longer period is required by federal or state law, in which case that longer period would apply.

(c)          “Separation from Service” occurs when you die, retire, or otherwise have a termination of employment with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h)(1), without regard to the optional alternative definitions available thereunder.

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4.          Limitation on Benefits. Notwithstanding anything contained in this Agreement to the contrary, to the extent that any payment, benefit or distribution of any type to you or for your benefit by the Company or any of its affiliates, whether paid or payable, provided or to be provided, or distributed or distributable pursuant to the terms of this Agreement or otherwise (collectively, the “Total Payments”) would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total Payments (after reduction) shall be one dollar ($1.00) less than the amount which would cause the Total Payments to be subject to the excise tax imposed by Section 4999 of the Code. Unless you shall have given prior written notice to the Company to effectuate a reduction in the Total Payments if such a reduction is required, any such notice consistent with the requirements of Section 409A of the Code to avoid the imputation of any tax, penalty or interest thereunder, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating any cash severance benefits (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of stock options or similar awards, then by reducing or eliminating any accelerated vesting of restricted stock or similar awards, then by reducing or eliminating any other remaining Total Payments. The preceding provisions of this Section 4 shall take precedence over the provisions of any other plan, arrangement or agreement governing your rights and entitlements to any benefits or compensation.

5.          Section 409A. It is intended that any amounts payable under this Agreement and the Company’s and your exercise of authority or discretion hereunder shall comply with and avoid the imputation of any tax, penalty or interest under Section 409A of the Code. This Agreement shall be construed and interpreted consistent with that intent. If you are a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of your Separation from Service and you are entitled to the Severance Benefit, you shall not be entitled to any payment or benefit pursuant to Section 2(b) until the earlier of (i) the date which is six (6) months after your Separation from Service for any reason other than your death, or (ii) the date of your death. The provisions of the preceding sentence shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code. Any amounts otherwise payable to you upon or in the six (6) month period following your Separation from Service that are not so paid by reason of such 6-month delay provision shall be paid (without interest) as soon as practicable (and in all events within thirty (30) days) after the date that is six (6) months after your Separation from Service (or, if earlier, as soon as practicable, and in all events within thirty (30) days, after the date of your death).

6.          Protective Covenants.

(a)          Confidential Information.

(i)          You shall not disclose or use at any time, either during the Period of Employment or thereafter, any Trade Secrets and Confidential Information (as defined below) of which you become aware, whether or not such information is developed by you, except to the extent that such disclosure or use is directly related to and required by your performance in good faith of duties for the Company. You will take all appropriate steps to safeguard Trade Secrets and Confidential Information in your possession and to protect it against disclosure, misuse, espionage, loss and theft. You shall deliver to the Company at the termination of your employment, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof) relating to the Trade Secrets and Confidential Information or the Work Product (as hereinafter defined) of the business of the Company or any of its affiliates which you may then possess or have under your control. Notwithstanding the foregoing, you may truthfully respond to a lawful and valid subpoena or other legal process, but shall give the Company the earliest possible notice thereof.

(ii)         For purposes of this Agreement, “Trade Secrets and Confidential Information” means information that is not generally known to the public and that is used, developed or obtained by the Company in connection with its business, including, but not limited to, information, observations and data obtained by you while employed by the Company or any predecessors thereof concerning (i) the business or affairs of the Company (or such predecessors), (ii) products or services, (iii) fees, costs and pricing structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports, (vii) computer software, including operating systems, applications and program listings, (viii) flow charts, manuals and documentation, (ix) data bases, (x) accounting and business methods, (xi) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice, (xii) customers and clients and customer or client lists, (xiii) other copyrightable works, (xiv) all production methods, processes, technology and trade secrets, and (xv) all similar and related information in whatever form. Trade Secrets and Confidential Information will not include any information that has been published (other than a disclosure by you in breach of this Agreement) in a form generally available to the public prior to the date you propose to disclose or use such information. Trade Secrets and Confidential Information will not be deemed to have been published merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.

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(iii)         For purposes of this Agreement, “Work Product” means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable, copyrightable, registerable as a trademark, reduced to writing, or otherwise) which relates to the Company’s or any of its affiliates’ actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by you (whether or not during usual business hours, whether or not by the use of the facilities of the Company or any of its affiliates, and whether or not alone or in conjunction with any other person) while employed by the Company (including those conceived, developed or made prior to the Effective Date) together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing. All Work Product that you may have discovered, invented or originated during your employment by the Company or any of its affiliates prior to the date hereof, that you may discover, invent or originate during your employment or at any time following the termination of your employment with the Company, shall be the exclusive property of the Company and its affiliates, as applicable, and you hereby assign all of your right, title and interest in and to such Work Product to the Company or its applicable affiliate, including all intellectual property rights therein. You shall promptly disclose all Work Product to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem necessary to protect or perfect its (or any of its affiliates’, as applicable) rights therein, and shall assist the Company, at the Company’s expense, in obtaining, defending and enforcing the Company’s (or any of its affiliates’, as applicable) rights therein. You hereby appoint the Company as your attorney-in-fact to execute on your behalf any assignments or other documents deemed necessary by the Company to protect or perfect the Company, the Company’s (and any of its affiliates’, as applicable) rights to any Work Product.

(b)          Restriction on Competition. During your employment with the Company and twelve (12) months following the termination of your employment with the Company (regardless of the reason for such termination and regardless of whether or not you are entitled to the Severance Benefit) (the “Restricted Period”), you shall not directly or indirectly, individually or on behalf of any other person or entity, manage, participate in, work for, consult with, render services for, or take an interest in (as an owner, stockholder, partner or lender) any Competitor. For purposes of this Agreement, “Competitor” means a Person anywhere in the world (the “Restricted Area”) that at any time during the period of time during which you are employed by the Company, or any time during the Restricted Period engages in the business of operating retail stores for the sale of women’s apparel, jewelry, accessories, gifts, greeting cards, picture frames and related items or any other business that the Company is engaged in, or reasonably anticipates becoming engaged in. The parties hereto agree that the Company intends to engage in business throughout the Restricted Area, even if it does not currently do so, and therefore its scope is reasonable. Nothing herein shall prohibit you from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as you have no active participation in the business of such corporation. The term “Person” as used in this Agreement shall be construed broadly and shall include, without limitation, an individual, a partnership, a limited liability company, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

(c)          Non-Solicitation of Employees and Consultants. During your employment with the Company and during the Restricted Period, you will not, and should be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) induce or attempt to induce any employee or independent contractor of the Company or any affiliate of the Company to leave the employ or service, as applicable, of the Company or such affiliate, or in any way interfere with the relationship between the Company or any such affiliate, on the one hand, and any employee or independent contractor thereof, on the other hand, or (ii) hire any person who was an employee of the Company or any affiliate of the Company until twelve (12) months after such individual’s employment relationship with the Company or such affiliate has been terminated.

(d)          Non-Solicitation of Customers. During your employment with the Company and during the Restricted Period, you will not, and should be enjoined (if necessary) from being able to directly or indirectly through any other Person: (i) influence or attempt to influence customers, vendors, suppliers, licensors, lessors, joint venturers, associates, consultants, agents, or partners of the Company or any affiliate of the Company to divert their business away from the Company or such affiliate; and (ii) interfere with, disrupt or attempt to disrupt the business relationships, contractual or otherwise, between the Company or any affiliate of the Company, on the one hand, and any of its or their customers, suppliers, vendors, lessors, licensors, joint venturers, associates, officers, employees, consultants, managers, partners, members or investors, on the other hand.

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(e)          Understanding of Covenants. You acknowledge and agree that the Company would not have entered into this Agreement, providing for severance protections to you on the terms and conditions set forth herein, but for your agreements herein. You agree that the foregoing covenants set forth in this Section 6 (the “Restrictive Covenants”) are reasonable, including in temporal and geographical scope, and in all other respects, and necessary to protect the Company’s and its affiliates’ Trade Secrets and Confidential Information, good will, stable workforce, and customer relations. The parties hereto intend that Restrictive Covenants shall be deemed to be a series of separate covenants, one for each county or province of each and every state or jurisdiction within the Restricted Area and one for each month of the Restricted Period. You understand that the Restrictive Covenants may limit your ability to earn a livelihood in a business similar to the business of the Company and any of its affiliates, but you nevertheless believe that you have received and will receive sufficient consideration and other benefits as an employee of the Company and as otherwise provided hereunder or as described in the recitals hereto to clearly justify such restrictions which, in any event (given your education, skills and ability), you do not believe would prevent you from otherwise earning a living. You agree that the Restrictive Covenants do not confer a benefit upon the Company disproportionate to your detriment.

(f)           Enforcement. You agree that a breach by you of any of the covenants in this Section 6 would cause immediate and irreparable harm to the Company that would be difficult or impossible to measure, and that damages to the Company for any such injury would therefore be an inadequate remedy for any such breach. Therefore, you agree that in the event of any breach or threatened breach of any provision of this Section 6, the Company shall be entitled, in addition to and without limitation upon all other remedies the Company may have under this Agreement, at law or otherwise, to obtain specific performance, injunctive relief and/or other appropriate relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Section 6, or require you to account for and pay over to the Company all compensation, profits, moneys, accruals, increments or other benefits derived from or received as a result of any transactions constituting a breach of this Section 6, if and when final judgment of a court of competent jurisdiction is so entered against you.

7.          Withholding Taxes. Notwithstanding anything else herein to the contrary, the Company may withhold (or cause there to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as may be required to be withheld pursuant to any applicable law or regulation.

8.          Successors and Assigns. This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

9.          Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED.

10.         Severability. If any provision of this Agreement is found by any court of competent jurisdiction to be invalid or unenforceable for any reason, such finding shall not affect, impair or invalidate the remainder of this Agreement. If any aspect of any restriction herein is too broad or restrictive to permit enforcement to its fullest extent, you and the Company agree that any court of competent jurisdiction shall modify such restriction to the minimum extent necessary to make it enforceable and then enforce the provision as modified.

11.         Entire Agreement, Amendment and Waiver. This Agreement constitutes the entire agreement between you and the Company with respect to the subject matter hereof and supersedes any and all prior or contemporaneous oral or written communications respecting such subject matter. This Agreement shall not be modified, amended or in any way altered except by written instrument signed by you and the Company’s Chief Executive Officer. A waiver by either party hereto of any rights or remedies hereunder on any occasion shall not be a bar to the exercise of the same right or remedy on any subsequent occasion or of any other right or remedy at any time.

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12.         Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

13.         Remedies. Each of the parties to this Agreement and any such person or entity granted rights hereunder whether or not such person or entity is a signatory hereto shall be entitled to enforce its rights under this Agreement specifically to recover damages and costs for any breach of any provision of this Agreement and to exercise all other rights existing in its favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that each party may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance, injunctive relief and/or other appropriate equitable relief (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Agreement. Each party shall be responsible for paying its own attorneys’ fees, costs and other expenses pertaining to any such legal proceeding and enforcement regardless of whether an award or finding or any judgment or verdict thereon is entered against either party.

14.         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument.

[Signature page follows]

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IN WITNESS WHEREOF, you and the Company have executed this Agreement as of December 28, 2012.

Francesca’s Collections, Inc.
a Texas corporation
By:	/s/ Neill Davis
	Neill Davis, President
AGREED BY:
/s/ Sei Jin Alt
Sei Jin Alt

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Neill P. Davis, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Francesca’s Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  June 7, 2013
	/s/ Neill Davis
	Neill Davis
	Chief Executive Officer

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EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Mark Vendetti, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Francesca’s Holdings Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  June 7, 2013
	/s/ Mark Vendetti
	Mark Vendetti
	Chief Financial Officer (duly authorized officer and Principal Financial and Accounting Officer)

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EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

I, Neill P. Davis, the Chief Executive Officer of Francesca’s Holdings Corporation, certify that (i) the quarterly report on Form 10-Q for the fiscal quarter ended May 4, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Francesca’s Holdings Corporation as of the dates and for the periods set forth therein.

/s/ Neill Davis

Neill Davis

Chief Executive Officer

June 7, 2013

Date

I, Mark Vendetti, the Chief Financial Officer of Francesca’s Holdings Corporation, certify that (i) the quarterly report on Form 10-Q for the fiscal quarter ended May 4, 2013 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Francesca’s Holdings Corporation as of the dates and for the periods set forth therein.

/s/ Mark Vendetti

Mark Vendetti

Chief Financial Officer (duly authorized officer and Principal Financial and Accounting Officer)

June 7, 2013

Date

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Commitment and Contingencies (Tables)

3 Months Ended

May 04, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

Minimum future rental payments under non-cancellable operating leases as of May 4, 2013, are approximately as follows:

Fiscal year	Amount
	(In thousands)
Remainder of 2013	$	19,557
2014		25,897
2015		25,223
2016		24,371
2017		23,009
Thereafter		75,541
	$	193,598

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Unaudited Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Net sales	$ 78,987	$ 61,322
Cost of goods sold and occupancy costs	37,615	28,779
Gross profit	41,372	32,543
Selling, general and administrative expenses	23,351	17,885
Income from operations	18,021	14,658
Interest expense	(116)	(255)
Other income	83	37
Income before income tax expense	17,988	14,440
Income tax expense	7,051	5,698
Net income	$ 10,937	$ 8,742
Basic earnings per common share (in dollars per share)	$ 0.25	$ 0.20
Diluted earnings per common share (in dollars per share)	$ 0.24	$ 0.20
Weighted average shares outstanding:
Basic shares (in shares)	43,939	43,573
Diluted shares (in shares)	44,880	44,702

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Income Taxes

3 Months Ended

May 04, 2013

Income Tax Disclosure [Abstract]

Income Taxes

4. Income Taxes

The provision for income taxes is based on the current estimate of the annual effective tax rate. The effective income tax rates for the thirteen weeks ended May 4, 2013 and April 28, 2012 were 39.2% and 39.5%, respectively. The difference between our effective tax rate and statutory rate primarily relates to state taxes.

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Stock-based Compensation (Details Textual) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Stock-based Compensation Additional Disclosures
Stock-based Compensation	$ 1.0	$ 0.7
Aggregate Intrinsic Value, Options exercised	6.3
Weighted Average Grant Date Fair Value of Options Granted During the Period (in dollars per share)	$ 15.28
Unrecognized Compensation Costs Related to Non-vested Stock Options	$ 11.2
Weighted Average Period Over Which Unrecognized Compensation Costs Related to Non-vested Options will be Recognized	3 years

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Summary of Significant Accounting Policies (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 04, 2013 Boutiques States
Company Information and Summary of Significant Accounting Policies
Year of Incorporation	2007
Entity Incorporation, State Country Name	Delaware
Number of Boutiques in Operation	416
Number of States in which Entity Operates	44
Revenue Recognition, Gift Cards, Breakage	$ 0.3

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Commitment and Contingencies (Details Textual)	3 Months Ended
	May 04, 2013
Description of Leasing Arrangements
Description of Leasing Arrangements	The Company leases boutique space and office space under operating leases expiring in various years through the fiscal year ending 2025. Certain of the leases provide that the Company may cancel the lease, with penalties as defined in the lease, if the Company's boutique sales at that location fall below an established level. Certain leases provide for additional rent payments to be made when sales exceed a base amount. Certain operating leases provide for renewal options for periods from three to five years at their fair rental value at the time of renewal.

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Commitment and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	May 04, 2013
Schedule of Future Minimum Lease Payments
Remainder of 2013	$ 19,557
2014	25,897
2015	25,223
2016	24,371
2017	23,009
Thereafter	75,541
Total	$ 193,598

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Unaudited Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Cash Flows From Operating Activities:
Net income	$ 10,937	$ 8,742
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	2,237	1,607
Stock-based compensation expense	990	734
Excess tax benefit from stock-based compensation	(2,373)	(1,014)
Loss on sale of assets	110	7
Amortization of debt issuance costs	73	73
Deferred income taxes	(597)	(1,352)
Changes in assets and liabilities:
Accounts receivable	(5,141)	(4,045)
Inventories	(4,281)	(3,180)
Prepaid expenses and other assets	93	(245)
Accounts payable	265	1,172
Accrued liabilities	5,717	2,579
Deferred and accrued rents	4,059	4,355
Net cash provided by operating activities	12,089	9,433
Cash Flows Used in Investing Activities:
Purchase of property and equipment	(8,517)	(6,620)
Net cash used in investing activities	(8,517)	(6,620)
Cash Flows Provided by (Used in) Financing Activities:
Repayments of borrowings under the revolving credit facility	0	(10,000)
Proceeds from the exercise of stock options	221	348
Taxes paid related to net settlement of equity awards	(2,280)	0
Excess tax benefit from stock-based compensation	2,373	1,014
Net cash provided by (used in) financing activities	314	(8,638)
Net increase (decrease) in cash and cash equivalents	3,886	(5,825)
Cash and cash equivalents, beginning of year	29,877	14,046
Cash and cash equivalents, end of period	33,763	8,221
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes	2,372	4,661
Interest paid	$ 40	$ 210

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Earnings Per Share

3 Months Ended

May 04, 2013

Earnings Per Share [Abstract]

Earnings Per Share

2. Earnings Per Share

Basic earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of stock options and restricted stock grants using the treasury stock method.

The following table summarizes the potential dilution that could occur if options to acquire common stock were exercised or if the restricted stock grants have fully vested and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 4, 2013		April 28, 2012
	(in thousands, except per share data)
Numerator:
Net income	$	10,937	$	8,742
Denominator:
Weighted-average common shares outstanding - basic		43,939		43,573
Options and other dilutive securities		941		1,129
Weighted-average common shares outstanding - diluted		44,880		44,702
Per common share:
Basic earnings per common share	$	0.25	$	0.20
Diluted earnings per common share	$	0.24	$	0.20

Stock options to purchase common stock in the amount of 0.8 million shares and 0.1 million shares in the thirteen weeks ended May 4, 2013 and April 28, 2012, respectively, were not included in the computation of diluted earnings per share due to their anti-dilutive effect.

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Revolving Credit Facility

3 Months Ended

May 04, 2013

Debt Disclosure [Abstract]

Revolving Credit Facility

5. Revolving Credit Facility

On July 27, 2011, Francesca’s Collections, Inc. (the “Borrower”) entered into an Amended and Restated Credit Agreement with Royal Bank of Canada, as Administrative Agent, and KeyBank National Association, as Syndication Agent, which provided $65.0 million of revolving credit facility (including borrowing capacity available for letters of credit). The revolving credit facility is scheduled to terminate on July 27, 2016. On May 4, 2013, no amounts were outstanding under the revolving credit facility.

All obligations under the revolving credit facility are unconditionally guaranteed by, subject to certain exceptions, Parent and each of Borrower’s existing and future direct and indirect wholly owned domestic subsidiaries. All obligations under the revolving credit facility, and the guarantees of those obligations (as well as cash management obligations and any interest rate hedging or other swap agreements), are secured by substantially all of the Borrower’s assets as well as the assets of each subsidiary guarantor.

The borrowings under the revolving credit facility bear interest at a rate equal to an applicable margin plus, at the Company’s option, either (a) in the case of base rate borrowings, a rate equal to the highest of (i) the prime rate of Royal Bank of Canada, (ii) the federal funds rate plus 1/2 of 1% and (iii) the LIBOR for an interest period of one month plus 1.00%; or (b) in the case of LIBOR borrowings, a rate equal to the higher of (i) 1.50% and (ii) the LIBOR for the interest period relevant to such borrowing. The applicable margin for borrowings under the revolving credit facility ranges from 1.25% to 2.25% with respect to base rate borrowings and from 2.25% to 3.25% with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. Additionally, the Borrower is required to pay a fee to the lenders under the revolving credit facility on the unused amount at a rate ranging from 0.25% to 0.45%, based on the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. The Borrower is also required to pay customary letter of credit fees.

The revolving credit facility requires the Borrower to maintain a maximum consolidated total lease adjusted leverage ratio and a minimum consolidated interest coverage ratio, in each case, on the last day of any fiscal quarter and includes a maximum capital expenditure in any fiscal year. The Borrower’s ability to pay dividends to the Company is subject to restrictions including a maximum secured leverage ratio. If the Borrower’s debt under the revolving credit facility exceeds that ratio, it is restricted from paying dividends. At May 4, 2013, this ratio was within the required limit, thus, the Borrower would have been allowed to pay dividends.

The Borrower is in compliance with the debt covenants of its revolving credit facility as of May 4, 2013.

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Fair value of Financial Instruments

3 Months Ended

May 04, 2013

Fair Value Disclosures [Abstract]

Fair value of Financial Instruments

3. Fair value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities, which includes cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximated their fair values due to the short term nature of these financial assets and liabilities.

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Unaudited Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	80.0	80.0	80.0
Common stock, shares issued	44.0	43.9	43.6
Common stock, shares outstanding	44.0	43.9	43.6

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 04, 2013

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. The financial information as of February 2, 2013 was derived from the Company’s audited consolidated financial statements and notes thereto as of and for the fiscal year ending February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

Due to seasonal variations in the retail industry, interim results are not necessarily indicative of results that may be expected for any other interim period or for a full year.

Principles of Consolidation

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Fiscal Year

Fiscal Year

The Company maintains its accounts on a 52- or 53-week year ending on the Saturday closest to January 31st. Fiscal year 2013 is a 52-week year while fiscal year 2012 was a 53-week year. The fiscal quarters ended May 4, 2013 and April 28, 2012 refer to the thirteen-week periods ended as of those dates.

Reclassifications

Reclassifications

Certain prior year amounts have been reclassified to facilitate comparability with the current year presentation. These reclassifications did not impact the Company’s results of operations in any periods presented.

Gift Cards and Gift Card Breakage

Gift Cards and Gift Card Breakage

The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. During the first quarter of fiscal year 2013, the Company accumulated sufficient historical information to estimate the rate of gift card breakage. Based on this historical information, the Company recognized $0.3 million of gift card breakage income during the thirteen weeks ended May 4, 2013. The gift card breakage income is included in net sales.

Management Estimates and Assumptions

Management Estimates and Assumption

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, net of estimated sales return, and expenses during the reporting periods. Actual results could differ from those estimates.

Earnings Per Share

Earnings Per Share

Basic earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period. Diluted earnings per common share amounts are calculated using the weighted-average number of common shares outstanding for the period and include the dilutive impact of stock options and restricted stock grants using the treasury stock method.

Fair value of Financial Instruments

Fair value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount reflected in the consolidated balance sheets of financial assets and liabilities, which includes cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximated their fair values. The carrying amount of these financial assets and liabilities approximates fair value because of their short maturities.

Stock-based Compensation

Stock-based Compensation

Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest.

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Unaudited Consolidated Statement of Changes in Stockholders' Equity (USD $) In Thousands	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Total
Balance at Feb. 02, 2013	$ 439	$ 85,161	$ (13,543)	$ 72,057
Balance (in shares) at Feb. 02, 2013	43,880
Net income	0	0	10,937	10,937
Stock-based compensation	0	990	0	990
Stock options exercised and related tax benefit	1	313	0	314
Stock options exercised and related tax benefit (in shares)	143
Balance at May. 04, 2013	$ 440	$ 86,464	$ (2,606)	$ 84,298
Balance (in shares) at May. 04, 2013	44,023

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Unaudited Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	May 04, 2013	Feb. 02, 2013	Apr. 28, 2012
Current assets:
Cash and cash equivalents	$ 33,763	$ 29,877	$ 8,221
Accounts receivable	7,645	2,504	6,479
Inventories	23,330	19,049	17,642
Deferred income taxes	3,567	3,506	2,456
Prepaid expenses and other current assets	4,772	4,749	3,248
Total current assets	73,077	59,685	38,046
Property and equipment, net	55,729	49,559	38,205
Deferred income taxes	2,893	2,357	2,200
Other assets, net	1,383	1,573	2,069
TOTAL ASSETS	133,082	113,174	80,520
Current liabilities:
Accounts payable	8,623	8,358	10,077
Accrued liabilities	14,010	10,667	11,458
Total current liabilities	22,633	19,025	21,535
Deferred and accrued rents	26,151	22,092	19,245
Long-term debt	0	0	12,000
Total liabilities	48,784	41,117	52,780
Commitments and contingencies
Stockholders' equity:
Common stock - $.01 par value, 80.0 million shares authorized; 44.0 million shares issued and outstanding at May 4, 2013; 43.9 million shares issued and outstanding at February 2, 2013; 43.6 million shares issued and outstanding at April 28, 2012.	440	439	436
Additional paid-in capital	86,464	85,161	79,166
Accumulated deficit	(2,606)	(13,543)	(51,862)
Total stockholders' equity	84,298	72,057	27,740
Total liabilities and stockholders' equity	$ 133,082	$ 113,174	$ 80,520

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Stock-based Compensation (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013
Stock Options Rollfoward (in shares)
Number of Shares, Outstanding (in shares) as of February 2, 2013	2,823
Number of Shares, Options granted (in shares)	24
Number of Shares, Options exercised (in shares)	(228)
Number of Shares, Options forfeited or expired (in shares)	0
Number of Shares, Outstanding (in shares) as of May 4, 2013	2,619
Number of Shares, Exercisable (in shares) at May 4, 2013	1,354
Weighted Average Exercise Price of Stock Options
Weighted Average Exercise Price, Outstanding (in dollars per share) as of February 2, 2013	$ 12.23
Weighted Average Exercise Price, Options granted (in dollars per share)	$ 26.81
Weighted Average Exercise Price, Options exercised (in dollars per share)	$ 2.22
Weighted Average Exercise Price, Options forfeited or expired (in dollars per share)	$ 0
Weighted Average Exercise Price, Outstanding (in dollars per share) as of May 4, 2013	$ 13.24
Weighted Average Exercise Price, Exercisable (in dollars per share) at May 4, 2013	$ 6.66
Average Remaining Contractual Life and Intrinsic Value
Weighted Average Remaining Contractual Life, Outstanding as of May 4, 2013	8 years
Weighted Average Remaining Contractual Life, Exercisable at May 4, 2013	7 years
Aggregate Intrinsic Value, Outstanding (in dollars) as of May 4, 2013	$ 39,649
Aggregate Intrinsic Value, Exercisable (in dollars) at May 4, 2013	$ 28,851

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Commitment and Contingencies

3 Months Ended

May 04, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitment and Contingencies

7. Commitment and Contingencies

Operating Leases

The Company leases boutique space and office space under operating leases expiring in various years through the fiscal year ending 2025. Certain of the leases provide that the Company may cancel the lease, with penalties as defined in the lease, if the Company’s boutique sales at that location fall below an established level. Certain leases provide for additional rent payments to be made when sales exceed a base amount. Certain operating leases provide for renewal options for periods from three to five years at their fair rental value at the time of renewal.

Minimum future rental payments under non-cancellable operating leases as of May 4, 2013, are approximately as follows:

Fiscal year	Amount
	(In thousands)
Remainder of 2013	$	19,557
2014		25,897
2015		25,223
2016		24,371
2017		23,009
Thereafter		75,541
	$	193,598

Legal Proceedings

From time to time, the Company is subject to various claims and legal proceedings arising in the ordinary course of business. While the outcome of any such claim cannot be predicted with certainty, in the opinion of management, the outcome of these matters will not have a material adverse effect on the Company’s business, results of operations or financial conditions.

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Stock-based Compensation (Tables)

3 Months Ended

May 04, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock Options Activity

The following table presents stock options granted, exercised, expired and aggregate intrinsic value under the existing Stock Plans for the thirteen weeks ended May 4, 2013.  

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)			(Per share)		(In Years)		(In thousands)
Outstanding as of February 2, 2013		2,823		$	12.23
Options granted		24			26.81
Options exercised		(228	)		2.22
Options forfeited or expired		—			—
Outstanding as of May 4, 2013		2,619		$	13.24		8	$	39,649
Exercisable at May 4, 2013		1,354		$	6.66		7	$	28,851

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Stock-based Compensation

3 Months Ended

May 04, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based Compensation

6. Stock-based Compensation

Stock-based compensation cost is measured at the grant date fair value and is recognized as an expense on a straight-line basis over the employee’s requisite service period (generally the vesting period of the equity grant). The Company estimates forfeitures for option grants that are not expected to vest. The stock-based compensation cost recognized in the thirteen weeks ended May 4, 2013 and April 28, 2012 totaled $1.0 million and $0.7 million, respectively.

Stock Options

The following table presents stock options granted, exercised, expired and aggregate intrinsic value under the existing Stock Plans for the thirteen weeks ended May 4, 2013.  

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
	(In thousands)			(Per share)		(In Years)		(In thousands)
Outstanding as of February 2, 2013		2,823		$	12.23
Options granted		24			26.81
Options exercised		(228	)		2.22
Options forfeited or expired		—			—
Outstanding as of May 4, 2013		2,619		$	13.24		8	$	39,649
Exercisable at May 4, 2013		1,354		$	6.66		7	$	28,851

During the thirteen weeks ended May 4, 2013, the intrinsic value of stock options exercised totaled $6.3 million while stock options were granted at a weighted average grant date fair value of $15.28. The number of options exercised in the above table includes shares withheld to satisfy certain employees’ obligation for exercise price and minimum statutory withholding requirements.

As of May 4, 2013 there was approximately $11.2 million of unrecognized compensation cost related to non-vested stock options that is expected to be recognized over a weighted-average period of three years.

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Summary of Significant Accounting Policies

3 Months Ended

May 04, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Nature of Business

Francesca’s Holdings Corporation (the “Company”) is a holding company incorporated in 2007 under the laws of the State of Delaware. The Company’s business operations are conducted through its wholly-owned indirect subsidiary Francesca’s Collections, Inc. (“Francesca’s Collections”), a corporation formed and existing under the laws of the State of Texas. Francesca’s Collections is wholly-owned by Francesca’s LLC (the “Parent”), a limited liability company formed and existing under the laws of the State of Delaware. Parent is a wholly-owned subsidiary of the Company.

The Company operates a national chain of retail locations designed and merchandised to feel like independently owned, upscale boutiques and provide its customers with an inviting, intimate and fun shopping experience. The Company offers a diverse and uniquely balanced mix of apparel, jewelry, accessories and gifts at attractive prices. At May 4, 2013, the Company operated 416 boutiques, which are located in 44 states throughout the United States, and its direct-to-consumer website.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, these unaudited financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods presented. The financial information as of February 2, 2013 was derived from the Company’s audited consolidated financial statements and notes thereto as of and for the fiscal year ending February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes as of and for the fiscal year ended February 2, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2013.

Due to seasonal variations in the retail industry, interim results are not necessarily indicative of results that may be expected for any other interim period or for a full year.

Principles of Consolidation

The accompanying unaudited consolidated financial statements include the accounts of the Company and all its subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.

Fiscal Year

The Company maintains its accounts on a 52- or 53-week year ending on the Saturday closest to January 31st. Fiscal year 2013 is a 52-week year while fiscal year 2012 was a 53-week year. The fiscal quarters ended May 4, 2013 and April 28, 2012 refer to the thirteen-week periods ended as of those dates.

Reclassifications

Certain prior year amounts have been reclassified to facilitate comparability with the current year presentation. These reclassifications did not impact the Company’s results of operations in any periods presented.

Gift Cards and Gift Card Breakage

The Company accounts for the sale of gift cards as a liability at the time a gift card is sold. The liability is relieved and revenue is recognized upon redemption of the gift card. The gift cards issued by the Company are owned by an unrelated third party. The gift cards do not have expiration dates. Income from gift card breakage is recognized when the likelihood of redemption is deemed to be remote. During the first quarter of fiscal year 2013, the Company accumulated sufficient historical information to estimate the rate of gift card breakage. Based on this historical information, the Company recognized $0.3 million of gift card breakage income during the thirteen weeks ended May 4, 2013. The gift card breakage income is included in net sales.

Management Estimates and Assumption

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, net of estimated sales return, and expenses during the reporting periods. Actual results could differ from those estimates.

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Numerator:
Net income	$ 10,937	$ 8,742
Denominator:
Weighted-average common shares outstanding - basic (in shares)	43,939	43,573
Options and other dilutive securities (in shares)	941	1,129
Weighted-average common shares outstanding - diluted (in shares)	44,880	44,702
Per common share:
Basic earnings per common share (in dollars per share)	$ 0.25	$ 0.20
Diluted earnings per common share (in dollars per share)	$ 0.24	$ 0.20

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Earnings Per Share (Tables)

3 Months Ended

May 04, 2013

Earnings Per Share [Abstract]

Schedule of Calculation of Numerator and Denominator in Earnings Per Share

The following table summarizes the potential dilution that could occur if options to acquire common stock were exercised or if the restricted stock grants have fully vested and reconciles the weighted-average common shares outstanding used in the computation of basic and diluted earnings per share:

	Thirteen Weeks Ended
	May 4, 2013		April 28, 2012
	(in thousands, except per share data)
Numerator:
Net income	$	10,937	$	8,742
Denominator:
Weighted-average common shares outstanding - basic		43,939		43,573
Options and other dilutive securities		941		1,129
Weighted-average common shares outstanding - diluted		44,880		44,702
Per common share:
Basic earnings per common share	$	0.25	$	0.20
Diluted earnings per common share	$	0.24	$	0.20

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Revolving Credit Facility (Details Textual) (Revolving Credit Facility [Member], USD $)	1 Months Ended	3 Months Ended
	Jul. 27, 2011	May 04, 2013
Revolving Credit Facility Details
Maximum Borrowing Capacity	$ 65,000,000
Maturity Date	Jul. 27, 2016
Amount Outstanding under the Revolving Credit Facility		$ 0
Interest Rate Terms		The borrowings under the revolving credit facility bear interest at a rate equal to an applicable margin plus, at the Company's option, either (a) in the case of base rate borrowings, a rate equal to the highest of (i) the prime rate of Royal Bank of Canada, (ii) the federal funds rate plus 1/2 of 1% and (iii) the LIBOR for an interest period of one month plus 1.00%; or (b) in the case of LIBOR borrowings, a rate equal to the higher of (i) 1.50% and (ii) the LIBOR for the interest period relevant to such borrowing. The applicable margin for borrowings under the revolving credit facility will range from 1.25% to 2.25% with respect to base rate borrowings and from 2.25% to 3.25% with respect to LIBOR borrowings, in each case based upon the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. Additionally, the Borrower will be required to pay a fee to the lenders under the revolving credit facility on the unused amount at a rate ranging from 0.25% to 0.45%, based on the achievement of specified levels of the ratio of consolidated total debt to consolidated EBITDA. The Borrower is also required to pay customary letter of credit fees.
Financial Covenants		The revolving credit facility requires the Borrower to maintain a maximum consolidated total lease adjusted leverage ratio and a minimum consolidated interest coverage ratio, in each case, on the last day of any fiscal quarter and includes a maximum capital expenditure in any fiscal year. The Borrower's ability to pay dividends to the Company is subject to restrictions including a maximum secured leverage ratio. If the Borrower's debt under the revolving credit facility exceeds that ratio, it is restricted from paying dividends. At May 4, 2013, this ratio was within the required limit, thus, the Borrower would have been allowed to pay dividends.
Covenant Compliance		The Borrower is in compliance with the debt covenants of its revolving credit facility as of May 4, 2013.
Minimum [Member]
Revolving Credit Facility Details
Commitment Fee Percentage		0.25%
Maximum [Member]
Revolving Credit Facility Details
Commitment Fee Percentage		0.45%
Base Rate Borrowings [Member] | Minimum [Member]
Revolving Credit Facility Details
Applicable Margin Rate		1.25%
Base Rate Borrowings [Member] | Maximum [Member]
Revolving Credit Facility Details
Applicable Margin Rate		2.25%
Libor Borrowings [Member] | Minimum [Member]
Revolving Credit Facility Details
Applicable Margin Rate		2.25%
Libor Borrowings [Member] | Maximum [Member]
Revolving Credit Facility Details
Applicable Margin Rate		3.25%

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Earnings Per Share (Details Textual) In Millions, unless otherwise specified	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0.8	0.1

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Document and Entity Information	3 Months Ended
	May 04, 2013	May 31, 2013
Entity Registrant Name	Francesca's Holdings CORP
Entity Central Index Key	0001399935
Current Fiscal Year End Date	--02-01
Entity Filer Category	Large Accelerated Filer
Trading Symbol	fran
Entity Common Stock, Shares Outstanding		44,023,026
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 04, 2013
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2013

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Income Taxes (Details Textual)	3 Months Ended
	May 04, 2013	Apr. 28, 2012
Income Taxes
Effective Income Tax Rate	39.20%	39.50%