Genesco Q2 Profit Tops View, Sales Miss; Cuts FY Earnings View Below Market

(RTTNews) - Genesco Inc. (GCO), a specialty retailer of footwear, headwear, sports apparel and accessories, reported Thursday that its second-quarter net earnings climbed to $14.58 million from last year's $7.52 million. Earnings per share grew to $0.72 from $0.32 a year ago. The latest results included a gain of $0.38 per share.

Adjusted earnings from continuing operations were $6.9 million or $0.34 per share, compared to earnings of $8.5 million, or $0.36 per share last year.

On average, 10 analysts polled by Thomson Reuters expected earnings of $0.27 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the second quarter decreased 4.6% to $626 million from $656 million in 2016, reflecting the divestiture of the Lids Team Sports business. Analysts were looking for $642.53 million for the quarter.

Consolidated comparable sales, including same store sales and comparable e-commerce and catalog sales, decreased 1%. The company recorded 4% decrease in the Journeys Group, flat comps at Lids Sports Group, a 1% decrease in the Schuh Group, and a 3% increase in the Johnston & Murphy Group.

Comparable sales for the Company reflected a 2% decrease in same store sales and a 1% decrease in e-commerce sales.

Regarding the current trading, Robert Dennis, Chariman, President and Chief Executive Officer, said, "The third quarter is off to a difficult start driven largely by the impact of the fashion shift at Journeys during the height of the back to school season and challenges at Schuh." Comparable sales for the third quarter through August 27 are down 5% from the same period last year.

Looking ahead, the company said it is lowering full year outlook based on comparable sales trend and expectations for sustained challenges.

For the year, the company now expects adjusted earnings per share in the range of $3.80 to $4.00, compared to previously issued guidance range of $4.80 to $4.90. Analysts expect $4.91 per share for the year.

This guidance assumes a comparable sales decrease in the low single digit range for the full year.