Genesco Inc. reported earnings from continuing operations jumped 74.4 percent for the first quarter ended April 30, to $15.0 million, or 63 cents per share, compared to earnings from continuing operations of $8.6 million, or 36 cents, in the same period a year ago. 

Net sales for the first quarter of Fiscal 2012 increased 20 percent to
$482 million from $401 million in the first quarter of Fiscal 2011.
Comparable store sales in the first quarter of Fiscal 2012 increased by
14 percent. The Journeys Group’s comparable store sales for the quarter rose by
15 percent, the Lids Sports Group’s increased by 16 percent, Underground Station’s
comps were up 6 percent, and Johnston & Murphy Retail’s increased by 10 percent.
Internet and catalog sales across the Company increased 24 percent on a comp
basis in the quarter.

Fiscal 2012 first quarter earnings reflected pretax charges of $1.2 million, or 4 cents per share, related to fixed asset impairments and other expenses. Fiscal 2011 first quarter earnings reflected pretax charges of $2.4 million, or 6 cents per share, primarily for fixed asset impairments.

Adjusted for the listed items in both periods, earnings from continuing operations were $15.7 million, or 67 cents per diluted share, for the first quarter of Fiscal 2012, compared to $10.1 million, or 42 cents per diluted share, for the first quarter of Fiscal 2011.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “We were very pleased with the strong sales and earnings growth we generated in the first quarter. Our performance was driven by our two largest businesses, Journeys and Lids Sports, both of which delivered mid-teens comparable store sales increases and grew operating income 94 percent and 49 percent, respectively. These contributions helped us achieve a significant improvement in profitability and provided us with good momentum to start the year.”

Dennis also discussed the company’s updated outlook.

“Based on our first quarter performance and current visibility, we are raising our Fiscal 2012 guidance. We now expect full year diluted earnings per share to be in the range of $2.90 to $2.97, which represents a 17 percent to 20 percent increase over last year’s earnings, up from our previous guidance range of $2.78 to $2.85. Consistent with previous guidance, these expectations do not include expected non-cash asset impairments and other charges, which are projected to total approximately $4 million to $5 million pretax, or $0.10 to $0.13 per share, after tax, in Fiscal 2012. This guidance assumes comparable store sales of 5 percent to 6 percent for the full fiscal year.”

The company noted that the revised guidance does not reflect the effects of a possible disruption of the 2011-2012 NFL season. The company estimates that the loss of the full season could result in a reduction of up to $5.5 million in pretax earnings in the Lids Sports Group, reducing consolidated earnings per share by up to $0.14.

Dennis concluded, “The pace of our business has been better than expected over the past several quarters. As a result, we are currently tracking ahead of our current 5-year growth plans which include achieving $2.3 billion in revenues and 8 percent operating margins by Fiscal 2015. We are encouraged by our recent performance and are optimistic that we have the strategies, infrastructure, and financial flexibility to further build our market positions and create meaningful long-term value for our shareholders.”

Consolidated Earnings Summary

Three Months Ended

April 30,

May 1,

In Thousands

2011

2010

Net sales

$   481,502

$        400,853

Cost of sales

233,960

192,782

Selling and administrative expenses

220,773

191,077

Restructuring and other, net

1,244

2,443

Earnings from operations

25,525

14,551

Interest expense, net

514

235

Earnings from continuing operations before income taxes

25,011

14,316

Income tax expense

10,036

5,753

Earnings from continuing operations

14,975

8,563

(Provision for) earnings from discontinued operations, net

(182)

53

Net Earnings

$     14,793

$             8,616

Consolidated Earnings Summary

Three Months Ended

April 30,

May 1,

In Thousands

2011

2010 *

Sales:

   Journeys Group

$   208,714

$         181,891

   Underground Station Group

25,803

26,073

   Lids Sports Group

169,676

119,988

   Johnston & Murphy Group

48,051

44,537

   Licensed Brands

28,950

28,142

   Corporate and Other

308

222

   Net Sales

$   481,502

$         400,853

Operating Income (Loss):

   Journeys Group

$     16,311

$             8,425

   Underground Station Group

1,147

649

   Lids Sports Group

14,004

9,414

   Johnston & Murphy Group

2,895

2,059

   Licensed Brands

3,304

4,532

   Corporate and Other**

(12,136)

(10,528)

  Earnings from operations

25,525

14,551

  Interest, net

514

235

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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