Genesco shoots past earnings expectations despite stalling sales
Nashville, Texas-based footwear and accessories company Genesco Inc. announced third-quarter earnings that comfortably beat analysts’ expectations on Saturday, even though the group’s sales registered a slight decline.
For the third quarter ended November 2, 2019, Genesco reported net sales of $537.3 million, down 0.5% from $540.0 million in the prior-year period.
Comparable sales saw a 3% rise, representing an increase of 1% in stores and 19% in the company’s direct channel. Direct-to-consumer sales accounted for 11.4% of Genesco’s total quarterly revenues, compared to 9.6% in the same period in the previous year.
By brand, comparable sales rose 4% at Genesco’s Journeys Group, and 3% at the Schuh Group, but dropped 6% at the Johnston & Murphy Group.
The company announced quarterly net earnings of $18.9 million, or $1.31 per diluted share, up from
$14.4 million, or $1.00 per diluted share.
Genesco’s adjusted EPS was $1.33, well ahead of the $1.08 predicted by industry analysts.
“Our third quarter results meaningfully exceeded our expectations,” explained Genesco chairman, president and CEO Robert Dennis in a release. “Consolidated comparable sales increased 3% driven by the ongoing strength of our Journeys business, coupled with a much improved performance from Schuh in the UK.”
Year to date, Genesco saw net sales of $1.52 billion, up from $1.51 billion in the prior-year period, while net earnings were $25.8 million ($1.60 per diluted share), compared to $12.04 million ($0.56 per diluted share).
Fiscal 2020 is Genesco’s first year as a footwear-focused company, as the group sold its Lids fan gear business at the end of 2019.
Last month it was announced that the company will receive a new CEO in February of next year, when Mimi Eckel Vaughn, the group’s current COO, is promoted to the position.
Looking to the future, Genesco expects to report an annual comparable sales increase between 2% and 3% in fiscal 2020, while adjusted diluted EPS is predicted to be in the range of $4.10 to $4.40 for fiscal 2020.
Following the announcement of Genesco’s earnings beat, shares in the company were up 15% in premarket trading on Friday.
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