Genesco Inc. today released fourth-quarter earnings that handily topped forecasts, but sales fell short of expectations amid ongoing product challenges at Journeys.
The company — which also owns Lids Sports Group, Schuh Group and Johnston & Murphy Group — said its Q4 profits advanced 4 percent to $46.8 million, or $2.40 per diluted share. Adjusted profits declined 9 percent, to $41.8 million, or $2.15 per diluted share, topping Wall Street’s bets for diluted earnings per share of $1.78.
Sales decreased 5 percent, to $883 million, reflecting the sale of the Lids Team Sports business in the fourth quarter of 2016 and a 2 percent decrease in sales from the remaining businesses, the company said. Those results missed analysts’ forecasts predicting sales of $901.4 million.
Consolidated comparable sales remained flat year-over-year with an 8 percent increase at Lids Sports, a 6 percent decrease at Journeys, a 2 percent increase at Schuh, and a 1 percent decrease at Johnston & Murphy.
Genesco chairman, president and CEO of Robert Dennis attributed gains in profit to a better-than-expected holiday for most of the firm’s businesses with the exception of Journeys, which has been hurt by the impact of a “significant fashion rotation.”
“While Journeys has made good progress adjusting its assortment to better reflect current consumer demand, until it anniversaries the negative comps from last summer, we will continue to face headwinds,” Dennis said in a release.
Genesco’s chief further stated the current year is also “off to a sluggish start” for the company “with the delayed income tax refunds clouding visibility into our sales trends early in the year.”
Citing additional concerns over the economy, Dennis said the company is “cautious” about the current year.
Genesco is predicting full-year adjusted diluted EPS in the range of $4.40 to $4.55 and a comparable sales increase in the 2 to 3 percent range.
For the full year, the company’s total profits advanced 3 percent, to $97.9 million, or $4.85 per diluted share. Adjusted profits declined 12 percent, to $87.2 million, or $4.33 per diluted share. Sales decreased 5 percent, to $2.9 billion.
As of 10:45 a.m. ET, Genesco shares were more than 12 percent, to $63.30, as investors cheered the company’s profits.