Francesca's Appointment Of New CEO Should Add Stability, Minimize Disruption To Operations

Jefferies said Francesca's Holdings Corp FRAN's hiring of Steven Lawrence as new CEO should minimize disruption in the business, while noting that Lawrence's strong merchant experience bodes well for the company.

Francesca's named Lawrence as President and CEO, effective October 2016. He will assume the reins from Interim CEO Richard Kunes, who had held the position since Mike Barnes stepped down in May 2016.

Lawrence currently serves as Chief Merchandising Officer of Stage Stores Inc SSI. Prior to joining Stage Stores in 2012, he worked at J C Penney Company Inc JCP for over a decade in various merchandising roles.

Meanwhile, the brokerage believes the company's strong momentum should continue amid leaner inventories and consistent execution.

"From a merchandising standpoint, we expect FRAN to continue to sharpen its focus on key items, improve speed to market, further balance the pricing/promo architecture, customize assortments by channel, and tighten inventory management," analyst Randal Konik wrote in a note.

But, Konik remains Hold rated on the stock as he waits for more evidence of consistent execution of company strategy. However, the analyst raised his price target by $2 to $15.

At time of writing, shares of Francesca's were flat at $15.17.