NEW YORK — The Journeys Group once again fueled earnings growth at Genesco Inc. as its third quarter blasted estimates.
“I would say they’re a little better positioned than most going forward because they’re in a situation where kids are buying shoes instead of clothes,” said Sterne Agee analyst Sam Poser.
Mitch Kummetz, analyst at R.W. Baird & Co., agreed, noting, “Their target demo is looking to spend what they have to spend. What else is competing for their disposable income? It’s consumer electronics, fast food and entertainment. Teens are responding to the strong trends in footwear versus apparel where there is perhaps not as much newness.”
Speaking to analysts on a conference call last week, Genesco President, Chairman and CEO Robert Dennis said, “Schuh outperformed our internal projections during the third quarter. Total sales for the quarter were $78 million. We expect this will only get better.”
Despite the turmoil in Europe, the firm does not expect a significant impact on Schuh’s sales. James Gulmi, SVP and CFO, said, “It’s a challenging environment in the U.K., maybe a little more so right now in terms of consumer spending than it is here, but they are cleaning up their act as a country better than we are.”
Genesco’s third-quarter net income surged 54 percent to $26.1 million, or $1.09 a share. Revenue increased 33 percent to $616.5 million, from $464.8 million, buoyed by a strong comparable-store sales increase of 12 percent, which was in turn driven by the Journeys Group’s comp increase of 15 percent.
Full-year EPS is expected to come in between $3.64 and $3.69, which represents a 47 percent to 49 percent increase over last year.