Genesco Sees Q2 Results Below Estimates, Cuts FY14 View; Shares Fall

(RTTNews) - Specialty retailer Genesco, Inc. (GCO) Thursday forecast second-quarter earnings and revenues below Wall Street estimates, and lowered its adjusted earnings per share outlook for fiscal 2014. The company also announced a potential change in accounting for certain bonus awards payable under its EVA Incentive Plan.

The shares are down about 10 percent in the morning trade.

For the second quarter ended August 3, the company expects earnings from continuing operations to be $12.14 million or $0.52 per share, higher than $10.56 million or $0.44 per share reported last year.

The company sees net earnings for the quarter of $0.51, compared to net earnings of $0.43 per share reported last year.

Excluding items, earnings from continuing operations are expected to be $13.19 million or $0.56 per share, while the firm had posted $12.10 million or $0.50 per share in the second quarter of last year.

On average, nine analysts polled by Thomson Reuters expect the company to earn $0.60 per share for the quarter. Analysts' estimates typically exclude special items.

Fiscal 2014 second-quarter results are expected to reflect expenses of $0.7 million or $0.04 per share after tax, including $2.8 million of expenses related to deferred purchase price payments in connection with acquisition of Schuh Group Ltd. The expenses also include $1.2 million for other legal matters, network intrusion expenses and asset impairment charges.

However, the expenses are partially offset by a net gain of $3.3 million on termination of lease of a New York City Journeys store location, Genesco stated.

Net sales are anticipated to be $574.75 million, up 5.7 percent from $543.52 million a year earlier, reflecting a comparable store sales decrease of 2 percent Analysts expect revenues of $596.24 million for the quarter.

Robert Dennis, chairman, president and chief executive officer of the company said, "We are disappointed that our second quarter performance fell short of expectations. Sales trends proved to be more challenging as the quarter progressed and results came in below our plan."

For fiscal year ending February 1, 2014, the company now expects adjusted earnings per share to be in the range of $5.20 to $5.30. down from the earlier guidance of $5.57 to $5.67 per share. The guidance assumes a comparable sales increase in the low single digit range.

Analysts are looking for earnings of $5.63 per share for the year.

Earnings per share from continuing operations, as potentially adjusted totaled $0.44 for the second quarter of fiscal 2013, and for the fiscal 2013, earnings per share were $4.76.

GCO is currently trading at $62.50, down 10.14 percent.