Genesco Predicts Strong Outlook on Q4 Profit Rise

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Nashville, TN—Thanks to double digit gains in its Lids Sports and Journeys stores, Genesco Inc. reported Friday that its fourth quarter profit rose 34%.

For the quarter ended Jan. 28, Genesco posted a net profit of $41.5 million, or $1.72 a share, up from $30.9 million, or $1.31 a share, a year ago. Excluding impairment, acquisition-related expenses and other items, per share earnings from continuing operations rose to $1.97 from $1.33, beating even the company’s high range forecast for $1.63 a share.

Total net sales jumped 29% to $723.4 million with comparable store sales up 12%. By division, Lids Sports Group had a 13% increase in its comparable store sales, while Journeys had a 14% increase. The Johnston & Murphy Retail segment had an 8% comp increase, but Underground Station’s comp sales fell 4%.

Gross margin widened to 49.4% from 48.7%.

Ahead: ‘Positive Comparable Store Sales’

“We finished Fiscal 2012 with an excellent fourth quarter, led by strong performances from our two largest businesses, Journeys Group and Lids Sports Group,” noted Robert J. Dennis chairman/president/ceo. “In addition, Schuh and Johnston & Murphy also contributed meaningfully to our results. Our merchandise strategies continued to drive strong full price selling in our stores and on our websites, helping push adjusted fourth quarter operating margin above 10% for the first time in five years.”

Looking ahead, the company, whose primary businesses are in footwear and headwear, projected a strong fiscal 2013. Its full year forecast is for earnings of $4.58 to $4.70 a share, ahead of analysts’ average estimate for $4.42.

“Fiscal 2013 has started well, with February consolidated comparable store sales up 13%,” said Dennis. “While we expect these trends to moderate, we continue to look for positive comparable-store sales on top of the challenging quarterly comparisons ahead of us.”

Last June, Genesco acquired Schuh Group which gave the company a retail presence in the United Kingdom.

Genesco Inc sells footwear, headwear, sports apparel and accessories in more than 2,380 retail stores throughout the North America and the United Kingdom, principally under the brands Journeys, Journeys Kidz, Shi by Journeys, Schuh, Lids, Lids Locker Room, Johnston & Murphy, and Underground Station. The Lids Sports Group division operates the Lids headwear stores, website, the Lids Locker Room and other team sports fan shops and single team clubhouse stores, and the Lids Team Sports team dealer business. In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the licensed Dockers brand, Keuka, and other brands.