Genesco Q4 Profit Rises, Results Miss Estimates, Sees FY15 Earnings Below View

(RTTNews) - Specialty retailer Genesco, Inc. (GCO) Thursday reported a higher fourth-quarter profit, reflecting mainly lower costs and expenses, despite a decrease in sales. Comparable sales were up 1 percent. Adjusted earnings as well as revenues missed analysts' expectations. The company also forecast fiscal 2015 adjusted earnings below view.

Genesco said it remains cautious in its outlook for the first half of the fiscal year, citing lack of a strong new fashion driver in the teen footwear space and continued uncertainty around customer traffic.

Robert Dennis, chairman of the company said, "Our Fiscal 2014 performance reflects a challenging selling environment throughout the year, including the fourth quarter. While our overall results were lower than we planned, we are confident the fundamentals of our business remain intact."

The company posted net earnings of $42.15 million or $1.79 per share for the 13-week period ended February 1, 2014, up from $38.76 million or $1.63 per share, for the 14-week period ended February 2, 2013.

Recent-quarter results included $0.37 per share after tax, including expenses related to deferred purchase price payments in connection with acquisition of Schuh Group Ltd., network intrusion expenses, other legal matters, a lease termination, and asset impairment charges.

Meanwhile, the prior-year quarter included $0.52 per share after tax, primarily including network intrusion expenses, deferred purchase price expenses and asset impairments.

Adjusted earnings from continuing operations were $2.16 per share for both the periods. On average, 10 analysts polled by Thomson Reuters expected the company to earn $2.18 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter decreased 0.5 percent to $792.51 million from $796.69 million a year ago and came below analysts' estimate of $804.42 million.

Comparable sales were up 1 percent, with a 4 percent increase in Lids Sports Group, a flat comp in the Journeys Group, a 7 percent decrease in the Schuh Group, and an 11 percent increase in the Johnston & Murphy Group.

Selling and administrative expenses declined to $304.77 million from $305.29 million a year earlier. Asset impairments and other, net, totaled $5.67 million, down from $16.14 million in the prior year.

For fiscal 2015, the company expects adjusted earnings per share to be in the range of $5.40 to $5.55, which represents 6 to 9 percent increase over fiscal 2014's adjusted earnings per share of $5.09. Analysts expect the company to report fiscal 2015 earnings per share of $5.65.

Genesco said its guidance assumes comparable sales increases in the low single digit range for the full fiscal year.

GCO closed Wednesday's regular trading session at $72.95 on the NYSE.