Comps, Outlook Improve for Genesco

BOSTON — Genesco Inc. has entered 2010 with a hearty dose of optimism, thanks, in part, to a stronger-than-expected February.

“We have come through this recession in fine shape and we continue to consider the glass that we have full,” Robert Dennis, president and CEO, said on the firm’s post-earnings conference call, held last Thursday.

The firm, which posted slight increases in fourth-quarter sales and earnings last week, reiterated its prior full-year guidance for earnings per share between $2 to $2.10 — versus analyst estimates for $2.07 — with same-store sale expected to rise 2 percent to 3 percent. Total sales should hit around $1.7 billion for the year.

Already, the company said its businesses have logged positive same-store sales in the new fiscal year. That includes a 4 percent comp rise in February from Journeys Group, a 13 percent jump at Underground Station and a 4 percent increase from Johnston & Murphy. As a result, first-quarter same-store sales will likely be flat to up slightly.

In the coming year, the company expects to take Journeys to Canada for the first time with three stores in the Toronto area.

In the recently completed fourth quarter, strong sales from Hat World helped the Nashville, Tenn.-based firm earn $25.9 million, or $1.08 a diluted share, up from a profit of $23.2 million, or $1.05, the prior year.

Net revenues rose 6 percent to $479 million. Hat World Group sales jumped to $152.4 million from $122.4 million a year ago, and Johnston & Murphy Group results rose to $47.3 million from $45.6 million.

Sales at Underground Station fell 5 percent to $32.2 million, and Journeys Group sales dipped slightly to $225.4 million from $229.5 million, though the chain benefited from demand for women’s boots.

Dennis noted that, due to the recent popularity of toning product, Journeys plans to enter the category. “We are not yet fully convinced that teens have grabbed on to this trend as of yet. However, certain vendors have produced product for spring that we judge to be more fashion oriented and as such better suited for our customer,” he said on the call.

For the year, Genesco earned $28.8 million, or $1.30, compared with $150.8 million, or $6.49, the prior year when profits were boosted due to a settlement with Finish Line Inc., following a terminated merger of the two firms. Annual revenues totaled $1.57 billion versus $1.55 billion last year.

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