Genesco Manages Q4 Net Increase on Lower Charges

Diamond embroidered cap from Lids

Diamond embroidered cap from Lids

Nashville, TN—Genesco Inc. today reported that even though its fourth quarter was down, its profit rose 8.7% helped by lower one-time charges.

For the quarter ended Feb. 1, the parent to Lids Sports Group, Journeys, Schuh Group posted earnings of $42.2 million, or $1.79 a share, compared to earnings of $38.9 million, or $1.64 a share, compared to a year earlier.

Results included a 37 cents a share after tax, including expenses related to deferred purchase price payments in connection with acquisition of Schuh Group Ltd., and other one-time charges. Excluding those, adjusted earnings were $2.16 a share. Just shy of analysts’ estimate for $2.18 a share.

Net sales were down 0.5% to $793 million, missing analysts’ estimate for $804.4 million in sales.

‘Inconsistent Sales Patterns’

Comparable store sales, meanwhile, were up 1%, with a 4% increase in Lids Sports Group, a flat comp in the Journeys Group, a 7% decrease in the Schuh Group, and an 11% increase at Johnston & Murphy.

Selling, general and administrative expenses declined to $304.77 million from $305.29 million a year earlier. Asset impairments and other expenses totaled $5.67 million, down from $16.14 million in the prior year.

“Our Fiscal 2014 performance reflects a challenging selling environment throughout the year, including the fourth quarter,” said CEO Robert J. Dennis. “While our overall results were lower than we planned, we are confident the fundamentals of our business remain intact.”

Dennis added that “inconsistent sales patterns that characterized last year carried over into the start of” this year with comp sales down 2% through March 8.

“Following a difficult first week that was marked by severe winter storms in several of our key markets, comparable sales turned positive and margins have held up. However, we remain cautious in our outlook for the first half of the fiscal year given the lack of a strong new fashion driver in the teen footwear space and continued uncertainty around customer traffic.”

But Genesco’s forecast came under analysts’ estimate. The company said its expects adjusted earnings per share to be in the range of $5.40 to $5.55, which represents 6% to 9% increase over 2013 earnings. Comp store sales are expected to be in the “low single-digit range” for 2014.

Analysts expect the company to report fiscal year earnings per share of $5.65.

 

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Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology. jeffp@busjour.com

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