Genesco Increases Guidance on Flat Earnings

Genesco Inc. third quarter earnings before discontinued operations were $16.0 million, or 62 cents per diluted share. Earnings before discontinued operations were $16.2 million, or 62 cents per diluted share, for the third quarter of 2005. Net sales for the third quarter of fiscal 2007 increased 15% to $364 million compared to $316 million for the third quarter of fiscal 2006.

Earnings before discontinued operations for the third quarter of this year reflected SFAS 123® share-based compensation and restricted stock expense of $1.7 million before taxes, or $0.04 per diluted share. Earnings from the third quarter last year reflected income of $0.8 million, or $0.02 per diluted share, primarily from an excess litigation provision. Net sales for the third quarter of fiscal 2007 increased 15% to $364 million compared to $316 million for the third quarter of fiscal 2006.

Genesco Chairman and Chief Executive Officer Hal N. Pennington, said, “Our better than expected third quarter results were driven by excellent performances at Journeys and Journeys Kidz, Johnston & Murphy and Dockers. While we expect the Underground Station business to remain challenging in the fourth quarter, our confidence that the strength we have seen in these other businesses will continue in the Holiday selling season is reflected in our increased earnings guidance for the full fiscal year.

“Net sales at Journeys Group increased 20% to approximately $184 million, same store sales rose 9% and footwear unit comps increased 18% in the third quarter. As expected, many of the same trends that produced success in the second quarter continued through Back-to-School. Journeys Kidz again reported strong growth, with sales up 55% and comparable store sales up 9%. Additionally, we remain pleased with the performance of Shi by Journeys. We feel very good about our merchandise assortment and the continuing momentum of the entire Journeys' group as we look forward to the Holiday selling season.

“Net sales at Hat World Group increased 13% to approximately $78 million and same store sales declined 1%, primarily reflecting weakness in Hat World stores serving the urban markets. We are forecasting a modest comparable sales improvement in the fourth quarter and we remain on track to open 101 new stores, representing a 14% increase in the store base, in the fiscal year. Hat World remains a high margin, highly profitable business with significant expansion opportunities and we remain very excited about its potential.

“Net sales for the Underground Station Group, which includes the Jarman stores, were $35 million and same store sales declined 11% in the third quarter. Same store sales at Underground Station fell 11% primarily due to continued weakness in men's athletic and urban markets in general. Our fourth quarter expectations do not reflect an improvement in the Underground Station business. Longer term, Underground Station is working to improve its women's product offering and non-footwear assortment.

“Johnston & Murphy Group's net sales increased 14% to approximately $44 million. Wholesale sales increased 25% and same store sales rose 6%. Johnston & Murphy's expanded dress and dress casual collection continues to gain retail shelf space and both footwear and non-footwear products are performing extremely well in the Johnston & Murphy stores. Sales growth and gross margin improvement combined to double operating margin compared to last year.

“Third quarter sales of licensed brands increased 31% to approximately $23 million. The entire Dockers' Footwear product line is retailing well and backlog is strong.”

Genesco said that it is raising its earnings per share guidance for the year ending February 3, 2007. The Company now expects sales of approximately $1.45 billion and diluted earnings per share of $2.55 to $2.57 for the year. For the fourth quarter, the Company expects sales of approximately $467 million to $470 million. It reiterated its previously announced expectation for fourth quarter earnings in the range of $1.29 to $1.31 per diluted share. The earnings per share estimates include expected SFAS 123® share-based compensation and restricted stock expense totaling approximately $0.17 per share for the year and $0.05 per share for the fourth quarter.

                                   GENESCO INC.

     Consolidated Earnings Summary
                                       Three Months Ended   Nine Months Ended
                                        October   October   October   October
                                           28,       29,       28,       29,
     In Thousands                         2006      2005      2006      2005
     Net sales                         $364,298  $316,336  $983,617  $877,589
     Cost of sales                      182,844   154,825   487,404   430,567
     Selling and administrative
      expenses                          150,992   133,225   433,477   385,429
     Restructuring and other, net         1,083      (789)    1,672     2,255
     Earnings from operations            29,379    29,075    61,064    59,338
     Interest expense, net                2,948     2,669     7,022     7,941
     Earnings before income taxes from
      continuing operations              26,431    26,406    54,042    51,397
     Income tax expense                  10,456    10,168    21,457    19,967
     Earnings from continuing
      operations                         15,975    16,238    32,585    31,430
     Provision for discontinued
      operations                            (98)      (95)     (287)      (30)
     Net Earnings                       $15,877   $16,143   $32,298   $31,400