The companies added their names to the growing list of footwear and apparel firms that could not make up for sluggish sales that they experienced in February due to delays in income tax refunds.
In addition to those delays, Genesco’s prize horse Journeys continued to grapple with shifts in consumer demands in the first quarter. Comparable sales at the division fell 5 percent as management worked toward updating the retailer’s assortment to better reflect the changing tastes of its target demographic. (Genesco said last year that it had stocked a heavy assortment of canvas sneakers at a time when its target customer was seeking more retro styles.)
Sales at the company’s other divisions fared better, however, with comps up 1 percent and 10 percent at Lids Sports Group and Schuh Group, respectively. Same-store sales at Johnston & Murphy Group dipped 3 percent.
Overall, Genesco’s Q1 sales declined 0.8 percent year-over-year, to $643 million, but were in line with expectations.
Reported net income tumbled to $1 million, or 5 cents per diluted share. Adjusted net income, at $1.1 million, or 6 cents per diluted share, was significantly below market watchers’ forecasts for earnings per diluted share of 26 cents.
Genesco president, chairman and CEO Robert Dennis said Journeys’ comp recovery will take longer than the company previously expected, causing management to slash its previous earnings outlook.
“While Journeys continues to make good progress adjusting its product offering to better reflect current consumer demand, we now believe Journeys’ comp recovery will take longer to materialize than previously expected due to a more significant slowdown in the declining part of its merchandise assortment,” he said. “In addition, 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.”
The company now expects adjusted diluted earnings per share for the year in the range of $3.90 to $4.05, compared with the previously issued guidance range of $4.40 to $4.55.
After the market close Wednesday, Shoe Carnival said its same-store sales declined 3.9 percent, while revenues slipped 2.7 percent, to $253.4 million.
Net income tumbled 23 percent, to $8.2 million, or 48 cents per share, missing consensus bets for earnings per share of 50 cents.
As of 10:30 a.m. ET, Genesco’s shares had plunged nearly 18 percent, to $36.72. Shoe Carnival’s shares were up nearly 11 percent, to $20.60.