Genesco Inc. reported earnings from continuing operations rose 25.7% for the fourth quarter, to $31.4 million, or $1.34 per share, compared to earnings from continuing operations of $25.8  million, or $1.08, a year ago.

Fiscal 2011 fourth quarter earnings were favorably impacted by 8 cents a share due to a lower effective tax rate offset by pretax items totaling $2.8 million, or 7 cents per diluted share, after tax, primarily related to network intrusion expenses, fixed asset impairments and purchase price accounting adjustments. Fiscal 2010 fourth quarter earnings reflected pretax charges of $2.9 million, or 8 cents per diluted share, after tax, primarily related to asset impairments, loss on early retirement of debt and tax rate adjustments, partially offset by a gain related to other legal matters.  

Adjusted for the listed items in both periods, earnings from continuing operations were $31.3 million, or $1.33 per diluted share, for the fourth quarter of Fiscal 2011, compared to earnings from continuing operations of $27.7 million, or $1.16 per diluted share, for the fourth quarter of Fiscal 2010. 

Net sales for the quarter increased 17% to $560.5 million from $479.0 million in the fourth quarter of Fiscal 2010.  Comparable store sales in the fourth quarter of Fiscal 2011 increased by 9%.  The Lids Sports Group's comparable store sales increased by 6%, the Journeys Group increased by 12%, Johnston & Murphy Retail increased by 12%, and Underground Station decreased by 4%.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “We are very pleased with our fourth quarter results. Solid organic growth combined with contributions from our recent acquisitions drove quarterly sales above $500 million.  Our top-line performance also helped us achieve our highest level of fourth quarter profitability in four years, representing a great way to close out a successful Fiscal 2011.

“Fiscal 2012 is off to a good start with February comparable store sales across all the Company's retail businesses up 10%.  While we expect these trends will moderate, we feel good about our prospects for spring based on our merchandising strategies and solid inventory position.

“Based on current visibility we expect Fiscal 2012 diluted earnings per share to be in the range of $2.78 to $2.85, which represents a 12% to 15% increase over last year's earnings. 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 sales of 3% for the full fiscal year.” 

Dennis concluded, “Our Fiscal 2011 performance underscores our key competitive advantages, especially in our two largest businesses, the Journeys Group and the Lids Sports Group and, with regard to Lids Sports, is an early validation of our strategy to create a leading destination for licensed sports merchandise and team apparel.  We now have two very strong and differentiated growth vehicles, supported by strong performances from Johnston & Murphy and Licensed Brands, and a solid balance sheet to support our expansion plans.  Looking ahead, we believe that our business model will generate solid cash flow and put us in a position to pursue further growth opportunities.”  

Fiscal Year 2011

The company also reported earnings from continuing operations for the fiscal year ended January 29, 2011, of $54.5 million, or $2.29 per diluted share, compared to earnings from continuing operations of $29.1 million, or $1.31 per diluted share, for the fiscal year ended January 30, 2010. Fiscal 2011 earnings reflected after-tax charges of 19 cents per diluted share, including asset impairments, purchase price accounting adjustments, network intrusion-related expenses, flood loss and other legal matters, partially offset by a lower effective tax rate. Fiscal 2010 earnings reflected after-tax charges of 56 cents per diluted share, including asset impairments, loss on early retirement of debt and tax rate adjustments, partially offset by a gain related to other legal matters. In addition, Fiscal 2010 reflected additional interest expense due to the adoption in the first quarter of Fiscal 2010 of FSP APB 14-1, a new accounting standard that applied to the Company's convertible debt.

Adjusted for the listed items in both years, earnings from continuing operations were $59.0 million, or $2.48 per diluted share, for Fiscal 2011, compared to earnings from continuing operations of $43.1 million, or $1.87 per diluted share, for Fiscal 2010.

Net sales for Fiscal 2011 increased 13.7% to $1.79 billion from $1.57 billion in Fiscal 2010.

GENESCO INC.














Consolidated Earnings Summary














Fourth Quarter




Fiscal Year Ended





January 29,


January 30,


January 29,


January 30,




In Thousands

2011


2010


2011


2010




Net sales

$           560,494


$           479,026


$            1,789,839


$            1,574,352




Cost of sales

287,503


242,489


887,992


778,482




Selling and administrative expenses

222,713


191,016


807,197


722,087




Restructuring and other, net

2,003


2,497


8,567


13,361




Earnings from operations

48,275


43,024


86,083


60,422




Loss on early retirement of debt


399



5,518




Interest expense, net

354


383


1,122


4,416




Earnings from continuing operations











   before income taxes

47,921


42,242


84,961


50,488




Income tax expense

16,508


16,413


30,414


21,402




Earnings from continuing operations

31,413


25,829


54,547


29,086















Provision for discontinued operations

(552)


25


(1,336)


(273)




Net  Earnings

$             30,861


$             25,854


$                 53,211


$                 28,813












About The Author

Thomas J. Ryan

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

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