Genesco Inc. had earnings from continuing operations of $9.5 million, or 43 cents per diluted share, for the third quarter ended Nov. 1, up from $5.6 million, or 23 cents, a year ago. Sales increased 5% to $390 million from $372 million while comps grew 2%. Results were in line with a forecast calling for lower guidance provided last week.
The latest quarter included a $2.5 million of restructuring charges and merger-related expenses, offset by an approximately equivalent after-tax amount of favorable adjustment to the company's provision for income taxes. In the third quarter last year, the company reported earnings from continuing operations of $5.6 million, or 23 cents per diluted share. Last year's results included $6.2 million of merger-related and restructuring expenses. Adjusting for these items, earnings from continuing operations would have been $10.0 million, or 39 cents per diluted share, in the third quarter last year.
Net sales for the third quarter of fiscal 2009 increased by 5% to $390 million, compared to net sales for the third quarter of the previous year of $372 million. Comparable store sales for the company increased 2%.
Third Quarter Business Unit Performance
Genesco President and CEO Robert J. Dennis said, “Our third quarter results reflect solid performances at Journeys, Hat World and Dockers, partially offset by challenges at Johnston & Murphy.”
Net sales in the Journeys Group grew 10% from the prior year period to $201 million. Same store sales for the Journeys Group were up 5% for the quarter and same store sales in the Journeys stores were up 4%, compared to a 3% decline last year. Footwear unit comps in Journeys rose 2% and average selling price increased 4% in the quarter. The solid results were driven by continued strength in Journeys' skate and women's boot business.
Net sales in the Hat World Group increased 6% from the prior year period to approximately $93 million and same store sales increased 2% in the third quarter, with urban stores up 4% and non-urban stores up 2%. Core and fashion Major League Baseball performed well and action brands were also very strong. Hat World once again generated significant operating margin expansion in the quarter.
Net sales for the Underground Station Group were $24 million for the third quarter. Same store sales increased 1% from the prior year period and footwear unit comps rose 10%. Despite the modest comp gain, Underground Station essentially met its profit expectations due to better than expected gross margins driven by changes in product mix.
Johnston & Murphy Group's net sales were approximately $42 million, with wholesale sales down 2% from the third quarter last year. Same store sales for the Johnston & Murphy shops declined 16% from the prior year period. Johnston & Murphy's business continues to be negatively affected by the economic climate.
Third quarter sales of Licensed Brands increased 3% from the third quarter last year to approximately $30 million. Dockers Footwear sales increased 11% during the quarter driven by a solid performance in the moderate and specialty footwear chains and a positive response to a new product line.
Net sales for the third quarter of fiscal 2009 increased by 5% to $390 million, compared to net sales for the third quarter of the previous year of $372 million. Comparable store sales for the company increased 2%.
Third Quarter Business Unit Performance
Genesco President and CEO Robert J. Dennis said, “Our third quarter results reflect solid performances at Journeys, Hat World and Dockers, partially offset by challenges at Johnston & Murphy.”
Net sales in the Journeys Group grew 10% from the prior year period to $201 million. Same store sales for the Journeys Group were up 5% for the quarter and same store sales in the Journeys stores were up 4%, compared to a 3% decline last year. Footwear unit comps in Journeys rose 2% and average selling price increased 4% in the quarter. The solid results were driven by continued strength in Journeys' skate and women's boot business.
Net sales in the Hat World Group increased 6% from the prior year period to approximately $93 million and same store sales increased 2% in the third quarter, with urban stores up 4% and non-urban stores up 2%. Core and fashion Major League Baseball performed well and action brands were also very strong. Hat World once again generated significant operating margin expansion in the quarter.
Net sales for the Underground Station Group were $24 million for the third quarter. Same store sales increased 1% from the prior year period and footwear unit comps rose 10%. Despite the modest comp gain, Underground Station essentially met its profit expectations due to better than expected gross margins driven by changes in product mix.
Johnston & Murphy Group's net sales were approximately $42 million, with wholesale sales down 2% from the third quarter last year. Same store sales for the Johnston & Murphy shops declined 16% from the prior year period. Johnston & Murphy's business continues to be negatively affected by the economic climate.
Third quarter sales of Licensed Brands increased 3% from the third quarter last year to approximately $30 million. Dockers Footwear sales increased 11% during the quarter driven by a solid performance in the moderate and specialty footwear chains and a positive response to a new product line.
GENESCO INC.
Consolidated Earnings SummaryThree Months Ended Nine Months EndedNovember 1, November 3, November 1, November 3,In Thousands 2008 2007 2008 2007Net sales $389,767 $372,496 $1,099,840 $1,035,124Cost of sales 191,853 184,445 539,207 511,610Selling and administrativeexpenses 179,365 174,194 532,831 499,326Restructuring and other, net 2,284 56 (196,293) 6,809Earnings from operations 16,265 13,801 224,095 17,379Interest expense, net 2,480 3,504 6,797 8,906Earnings before income taxesfrom continuing operations 13,785 10,297 217,298 8,473
Income tax expense 4,322 4,687 82,872 3,600Earnings from continuingoperations 9,463 5,610 134,426 4,873
Provision for discontinuedoperations (25) (10) (5,479) (1,235)Net Earnings $9,438 $5,600 $128,947 $3,638
