Genesco earnings affected by excess inventory in Q4
Genesco Inc. announced Friday the fourth quarter and full year results for fiscal 2015 ended January 30, 2016.
The company reported a 4.4% increase of net sales in the fourth quarter to $932 million from $893 million. Consolidated fourth quarter comparable sales, including same store sales and comparable e-commerce and catalog sales, increased 4%, with Journeys Group increasing 5%, Lids Sports Group increasing 3%, Schuh Group decreasing 2% and Johnston & Murphy Group increasing 6%.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, "Fourth quarter earnings came in just below our guidance range as a result of gross margin pressure related to our decision to make a final, aggressive push to complete our year-long program to right-size inventory in the Lids Sports Group and similarly aggressive efforts to clear inventory after a slow Holiday selling season at Schuh. Additionally, a later start to IRS tax refunds than in the previous year reduced comparable sales at the end of the quarter. While we are disappointed with our overall results, we are encouraged by the strong performance of Journeys and Johnston & Murphy and the work we've done to prepare the Company for sustained, profitable growth going forward.
Net sales for the full year increased 5.7% to $3.0 billion from $2.9 billion in the previous year. Earnings from continued operations decreased to $97.1 million from $99.4 million. The company also repurchased a total of 2.4 million shares of common stock in the year at a total cost of $31 million and an average price of $60.79 per share.
Dennis added results for the first quarter: "Comparable sales for the first quarter through March 5, 2016 increased 3% from the same period last year, reflecting in part the impact on early February sales from the delay in receipt of income tax refunds by customers, and recovery later in the month as tax refunds began.”
For fiscal 2017, the company expects its adjusted diluted earnings per share to range from $4.80 to $4.90, which represents a 12% to 14% increase over Fiscal 2016's adjusted earnings per share of $4.29.
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