Genesco Sees Q4 Comp Sales Gains Across Divisions

Genesco Inc. reported earnings before discontinued operations of $25.5 million, or 97 cents per diluted share, for the fourth quarter ended January 29, 2005. Earnings before discontinued operations were $17.8 million, or 71 cents per diluted share, for the fourth quarter ended January 31, 2004. Net sales for the fourth quarter of fiscal 2005 increased 40% to $352.8 million compared to $252.7 million for the fourth quarter of fiscal 2004.

For the fiscal year ended January 29, 2005, the Company reported earnings before discontinued operations of $48.6 million, or $1.93 per diluted share. Earnings before discontinued operations were $29.6 million, or $1.26 per diluted share, for the previous year. Earnings reflected favorable tax provision adjustments of $0.5 million, or $0.02 per diluted share, in the fourth quarter of fiscal 2005 and $1.0 million, or $0.04 per diluted share, for the full year.

Net sales for fiscal 2005 increased 33% to $1.1 billion compared to $837.4 million for fiscal 2004. Reported results for the fourth quarter and fiscal year ended January 29, 2005, are preliminary, unaudited and subject to adjustment pending completion of the Company’s review of its accounting for certain aspects of retail store leases, discussed below, and of year-end audit procedures.

Genesco Chairman, President and Chief Executive Officer Hal N. Pennington, said, “Our better than expected fourth quarter performance was driven by ongoing improvements in all of our businesses, validating the strategic initiatives we put in place early last year. These results, our confidence in our direction as a company, and the positive tone of the business at the beginning of the new fiscal year have raised our expectations for fiscal 2006.

“Net sales at Journeys increased 8% to approximately $164 million in the fourth quarter, same store sales rose 4% and footwear unit comps increased 6%. Fashion athletic, skateboard, and eurocasual styles, all categories we consider to be particularly strong for Journeys, accounted for much of the quarter’s gains, and we expect them to remain strong in the first half of fiscal 2006.

“Same store sales at the Underground Station Group, which includes the Jarman stores, rose 3% during the quarter. We were particularly pleased with the Underground Station stores which posted a 5% gain in same store sales, primarily driven by continued increases in average selling prices. Throughout the year we implemented a number of product, merchandising and operational changes to improve this business and it is encouraging to see improved results.

“Hat World registered another strong quarter, with total sales up 17% and same store sales up 6%, due to increased demand for core sports product, as well as ongoing strength in the fashion and branded cap businesses. Given the flexible retail opportunities that exist for Hat World, not only in malls, but in airports, outlets, kiosks and street locations, we continue to be confident about Hat World’s significant growth potential. We plan to open 90 new Hat World and Lids locations in fiscal 2006 and we believe we can ultimately grow this business from the 552 locations at year-end to more than 900 U.S. locations.

“We were also very pleased with Johnston & Murphy’s fourth quarter results. Net sales increased to $44 million, same store sales rose 3% and operating margin increased 420 basis points to 8%. Our focus has been on profitable sales and margin improvement. We now look to further enhance the Johnston & Murphy brand name and to grow sales by increasing our investment in marketing and advertising beginning in the first quarter.

“Dockers Footwear’s sales rose 10% during the quarter to approximately $13.5 million, with an operating margin of 6.5%. For the full year, operating margin was 9.6%. While we still have work to do, we are pleased with the direction of the Dockers Footwear business.”

                                 GENESCO INC.

    Consolidated Earnings Summary
                                       Fourth Quarter     Fiscal Year Ended
    In Thousands                       2005      2004        2005      2004

    Net sales                      $352,818  $252,672  $1,112,681  $837,379
    Cost of sales                   177,669   134,603     561,597   448,601
    Selling and administrative
     expenses                       130,939    89,324     461,535   332,674
    Restructuring and other, net        570     1,040       1,197       901
    Earnings from operations
     before interest and other       43,640    27,705      88,352    55,203
    Loss on early retirement of
     debt                                 -         -           -     2,581
    Interest expense, net             3,046     1,598      10,962     7,289
    Earnings before income taxes
     from continuing operations      40,594    26,107      77,390    45,333

    Income tax expense               15,110     8,347      28,778    15,715
    Earnings from continuing
     operations                      25,484    17,760      48,612    29,618

    Provision for discontinued
     operations, net                    250      (888)       (211)     (888)
    Net Earnings                    $25,734   $16,872     $48,401   $28,730



    Earnings Per Share Information

    In Thousands (except per           Fourth Quarter     Fiscal Year Ended
     share amounts)                    2005      2004        2005      2004

    Preferred dividend requirements     $73       $73        $292      $294

    Average common shares - Basic
     EPS                             22,326    21,721      22,008    21,742

    Basic earnings per share:
        Before discontinued
         operations                   $1.14     $0.81       $2.20     $1.35
        Net earnings                  $1.15     $0.77       $2.19     $1.31