Genesco Trims Q2 Loss

Genesco Trims Q2 Loss
The Genesco-owned Journeys chain

Genesco Inc. narrowed its loss in the second quarter and said sales are on the upswing, thanks to strong back-to-school results.
 
For the period ended July 30, the Nashville, Tenn.-based retailer lost $392,000, or 2 cents a share, compared with a loss of $3.2 million, or 14 cents, in the same period a year ago.
 
The loss reflects pre-tax costs related primarily to fixed asset impairments, as well as deferred purchase price payments related to the acquisition of Schuh Group Ltd. in June.
 
Analysts were expecting earnings of 10 cents a share.
 
Revenue was up in the double digits across the board, and the firm’s net sales for the quarter increased 29 percent to $471 million, from $364 million, thanks to a comparable-store sales increase of 14 percent.
 
The company’s Johnston & Murphy Group advanced 17 percent, the Journeys Group jumped 15 percent, the Lids Sports Group grew 12 percent and the Underground Station Group improved by 10 percent.
 
The back-to-school season also has yielded a comps increase of 12 percent in August, the firm said.
 
“The combination of … organic growth and contributions from acquisitions allowed us to better leverage expenses and achieve much higher profitability in our seasonally slowest period. We are pleased with the recent strength of our business and believe we are well positioned for continued sales and earnings gains,” Robert Dennis, chairman, president and CEO of Genesco, said in a statement.
 
“While there is a possibility for some macroeconomic headwinds in the near-term, we are more optimistic than ever about the long-term potential of our business, evidenced by our new five-year targets for $3 billion in revenue and operating margins of at least 9 percent by fiscal 2016,” he added.
 
The firm also raised its fiscal 2012 guidance. EPS is expected to come in between $3.35 and $3.42, representing a 35 percent to 38 percent increase over last year’s earnings.
 
Genesco ended the quarter with $35.6 million in cash, and $159.4 million in long-term debt.

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