Genesco Inc. reported earnings from continuing operations for the second quarter ended Aug. 2, 2014, of $4.8 million, or 20 cents per diluted share, compared to earnings from continuing operations of $8.5 million, or 36 cents per diluted share, a year ago.

Fiscal 2015 second quarter results reflect expenses of $3.6 million, or 14 cents per diluted share after tax, including $2.2 million related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited; and $1.4 million in network intrusion expenses, asset impairment charges and other legal matters.  Fiscal 2014 second quarter results reflected expenses of $6.6 million, or 20 cents per diluted share after tax, including $5.9 million associated with a change in accounting for bonus awards, $2.8 million related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited, and $1.2 million for other legal matters, network intrusion expenses and impairment charges, partially offset by a net gain of $3.3 million on the termination of the lease of a New York City Journeys store location.

Adjusted for the items described above in both periods, earnings from continuing operations were $8.0 million, or 34 cents per diluted share, for the second quarter of Fiscal 2015, compared to earnings from continuing operations of $13.2 million, or 56 cents per diluted share, for the second quarter of Fiscal 2014. 

Analysts on average were expecting 55 cents a share.

Net sales for the second quarter of Fiscal 2015 increased 7.1 percent to $615 million from $575 million in the second quarter of Fiscal 2014. Consolidated second quarter 2015 comparable sales, including same store sales and comparable e-commerce and catalog sales, increased 2 percent, with a 5 percent increase in the Journeys Group, a 2 percent decrease in the Lids Sports Group, a 1 percent increase in the Schuh Group, and a 2 percent increase in the Johnston & Murphy Group.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “We are disappointed with our second quarter earnings performance. Solid comparable sales gains and a strong topline performance in our direct businesses were not enough to offset a sales and gross margin shortfall versus plan at the Lids Sports Group. The third quarter is off to a solid start, with consolidated comparable sales for the company up 4 percent through August 23, 2014.”

Dennis also discussed the company's updated outlook. “Based on our second quarter performance and slightly lower expectations for the balance of the year at Lids, we now expect adjusted Fiscal 2015 diluted earnings per share in the range of $5.10 to $5.20, or from flat to a 2 percent increase over Fiscal 2014's adjusted earnings per share of $5.09, down from our previously issued guidance of $5.40 to $5.55. Consistent with our previous guidance, these expectations do not include non-cash asset impairments and other charges, partially offset by a gain on a lease termination in the first quarter this year, which we estimate will be in the range of $3.2 million to $3.7 million pretax, or $0.08 to $0.10 per share, after tax, in Fiscal 2015. These expectations also do not reflect a $5.7 million, or $0.15 per diluted share, change in the first quarter related to the change in accounting for bonus awards.  Finally, the expected earnings per share do not reflect compensation expense associated with the Schuh deferred purchase price as described above, which is currently estimated at approximately $7.4 million, or $0.31 per diluted share, for the full year. This guidance assumes a comparable sales increase in the low single digit range for the full fiscal year.”  A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.

Dennis concluded, “We continue to believe our longer-term future is compelling based on the strength of our brands and the numerous omnichannel initiatives that are helping fortify their strategic positions.”