Genesco Sales Climb 12% in Q2; Raises Guidance

Genesco reported net earnings of $6.8 million, or 27 cents per diluted share, for the second quarter ended July 30, 2005 compared with $4.8 million, or 20 cents per diluted share, for Q2 last year. Net sales for the second quarter of fiscal 2006 increased 12% to $275 million compared to $246 million for the second quarter of fiscal 2005.

Genesco Chairman, President and Chief Executive Officer Hal N. Pennington, said, “We are very pleased to have exceeded expectations once again with a strong second quarter performance. Our results were driven by positive comps in all our retail divisions and by continued operating margin expansion.”

“Net sales at Journeys rose 12% to approximately $119 million, same store sales increased 6% and footwear unit comps were up 9%. Fashion athletic, Euro casuals, board sport shoes, and women's fashion footwear all performed well during the quarter. We are confident that Journeys is well positioned from a merchandising perspective for the fall and holiday selling seasons.

“Hat World posted another solid quarter. Total sales increased 19% to $69 million and same store sales were up 4%, which was on top of a 16% comp increase a year ago. Hat World continued to experience strong gains in both core and fashion Major League Baseball, and branded performance headwear, and we are excited about the opportunities for the upcoming NFL season. Our new stores — both mall and non-mall locations –continue to perform well, highlighting Hat World's significant growth prospects.

“Comparable store sales for Underground Station increased 12%, driven by continued increases in average selling price and unit comps. Net sales for the Underground Station Group, which includes Jarman, increased 13% to $32 million and comparable store sales rose 9%. Comparable store sales at Jarman were up 1%. We remain focused on improving our platform and expanding Underground Station's leadership position in the mall.

“Johnston & Murphy's second quarter results reflect the success of the brand's initiatives to attract new consumers, update the retail stores and diversify its sourcing base. Net sales were up 4% to $41 million, same store sales increased 9%, representing Johnston & Murphy's biggest quarterly comp gain in some time. In addition, operating margin improved 230 basis points, to 5.9%. The excellent feedback we received from retailers at the recent WSA Shoe Show reinforces our confidence in the Johnston & Murphy brand, its product offering, and its business strategy.

“Sales of Dockers Footwear were roughly flat at $14 million. Dockers Footwear business continues to be impacted by a shift at retail to more private label footwear.”

Genesco also stated that it is revising its fiscal 2006 guidance upward. The Company now expects sales for the year to be approximately $1.28 billion and earnings per share to range from $2.28 to $2.30, including a previously announced charge of approximately $0.06 per share associated with the settlement of a class action lawsuit.

Pennington concluded, “During the first six months of fiscal 2006 our entire organization performed at a very high level and our strong financial results and growing industry presence reflect tremendous effort. While we are proud of our recent accomplishments, our sights are set on the future and we continue to push ourselves to improve our operations and increase shareholder value.”

                                   GENESCO INC.

      Consolidated Earnings Summary
                                       Three Months Ended   Six Months Ended
                                       July 30,  July 31,  July 30,  July 31,
      In Thousands                       2005      2004      2005      2004
      Net sales                        $275,168  $245,939  $561,253  $471,465
      Cost of sales                     136,210   124,050   275,742   238,898
      Selling and administrative
       expenses                         124,948   112,011   252,204   211,349
      Restructuring and other, net          177      (160)    3,044       (92)
      Earnings from operations before
       interest  and other               13,833    10,038    30,263    21,310
      Interest expense, net               2,568     2,896     5,272     4,778
      Earnings before income taxes
       from continuing operations        11,265     7,142    24,991    16,532

      Income tax expense*                 4,499     2,317     9,799     5,901
      Earnings from continuing
       operations                         6,766     4,825    15,192    10,631

      Provision for discontinued
       operations, net                        -       (21)       65       (21)
      Net Earnings                       $6,766    $4,804   $15,257   $10,610

    * Includes favorable tax settlements of $0.4 million and $0.5 million in
      the second quarter and six months of Fiscal 2005, respectively.



      Earnings Per Share Information
                                         Three Months Ended Six Months Ended
                                          July 30, July 31, July 30, July 31,
      In Thousands (except per
       share amounts)                        2005     2004     2005     2004
      Preferred dividend requirements         $69      $73     $142     $146

      Average common shares - Basic EPS    22,702   21,903   22,613   21,833

      Basic earnings per share:
           Before discontinued
            operations                      $0.29    $0.22    $0.67    $0.48
           Net earnings                     $0.29    $0.22    $0.67    $0.48

      Average common and common
          equivalent shares -
          Diluted EPS                      27,142   26,290   27,020   26,208

      Diluted earnings per share:
           Before discontinued
            operations                      $0.27    $0.20    $0.60    $0.45
           Net earnings                     $0.27    $0.20    $0.61    $0.45