Genesco reduces full year outlook following slow second quarter performance

By

Obi Anyanwu

Published
Aug 31, 2017

Genesco on Thursday reported a 1.4% decrease in second quarter sales to $617 million from $626 million, and consolidated second quarter 2018 comparable sales, which includes same-*store sales and comparable e-commerce and catalog sales, were flat.

 
"The second quarter was a bit more challenging than we expected, as positive momentum at Journeys was offset by increasing headwinds at Lids,” said Chairman, President and CEO Robert J. Dennis.
 
Journeys comparable sales increased 1% and Schuh Group sales increased 3%, but were offset by a 2% decrease in comparable sales for Lids Sports Group and a 1% decrease for Johnston & Murphy. E-commerce performed the best for the company, increasing 30%, and offset the 2% decrease in same-store sales.

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Genesco also reported a loss from continuing operations of $3.9 million, compared to earnings of $14.5 million, or $0.72 per diluted share, in the prior year.

Dennis added, “As a result of the overall flat comp and these factors, combined with gross margin headwinds, primarily from higher e-commerce sales, product mix shifts, and increased promotional activity, earnings were considerably lower than last year and slightly below our internal forecasts.”
 
Following the second quarter performance, Genesco updated its fiscal year 2018 results and now expects adjusted diluted EPS to be in range of $3.35 and $3.65, compared to the previously issued guidance of $3.90 to $4.05.
 
“We have adopted a more conservative outlook for store-based sales given the anemic level of mall traffic year-to-date and the more pronounced shift in consumer spending away from stores to online,” said Dennis.