Genesco Q1 Profit Misses View, Revenue Tops

(RTTNews) - Specialty retailer Genesco, Inc. (GCO) Friday said first-quarter profit declined from the prior year in a choppy retail environment. While adjusted earnings missed Wall Street estimates, sales came ahead of expectations. The company backed its full year earnings forecast.

Robert Dennis, CEO, said, "We are pleased with our performance given the choppy retail environment, combined with the lack of a meaningful, new fashion driver in the teen footwear space early in the year. We continue to expect stronger comparable sales gains and improved profitability as we move into the back half of the year.''

Net earnings dropped to $13.97 million or $0.59 per share from $14.41 million or $0.61 per share in the prior year. Earnings per share from continuing operations was $0.60 in the just concluded period.

The latest results reflected expenses of $0.21 per share, including $5.7 million related to a change in accounting for bonus awards and $3.1 million associated with deferred purchase price payments in connection with the acquisition of Schuh Group Limited.

The results also included $2 million in network intrusion expenses, asset impairment charges and other legal matters, offset by a $3.1 million gain on a lease termination.

The prior-year results reflected expenses of $0.33 per share, including $6.5 million associated with a change in accounting for bonus awards, $2.9 million related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited and $1.3 million for impairment charges and network intrusion expenses.

Adjusted earnings from continuing operations were $19.3 million or $0.81 per share, compared to $22.2 million or $0.94 per share for the first quarter of Fiscal 2014. On average, 9 analysts polled by Thomson Reuters expected earnings per share of $0.91 for the quarter. Analysts' estimates typically exclude one-time items. Net sales advanced to $628.83 million from $591.39 million. Analysts estimated revenues of $620.03 million.

Comparable sales, including same store sales and comparable e-commerce and catalog sales, increased 1 percent, with a 1 percent rise in the Journeys Group and a 1 percent growth in the Lids Sports Group. A 1 percent slide was seen in the Schuh Group, and a 1 percent decrease in the Johnston & Murphy Group. Further, Genesco said the second quarter is off to a solid start with comparable sales up 3 percent through May 24. ''We are encouraged by the recent pace of business and optimistic that we can build on our current momentum,'' Dennis added.

Additionally, the retailer said it remains comfortable with its previously announced guidance for adjusted Fiscal 2015 earnings per share in the range of $5.40 to $5.55, a 6 to 9 percent increase over Fiscal 2014's adjusted earnings per share of $5.09. Analysts look for earnings of $5.46 per share.

GCO closed down 3.3 percent on Thursday at $71.01.