Genesco Inc. today reported third-quarter sales and profits that topped analysts’ expectations, thanks to a strong performance by teen mall staple Journeys as well as solid advances at its Johnston & Murphy division.
The former saw comparable store sales rise 9 percent, and the latter enjoyed a gain of 10 percent during the period — boosting the firm’s adjusted earnings to 95 cents per share. Analysts had expected Genesco to post earnings of 86 cents per share. (The company also reversed last year’s net losses to post profits of $12 million, or 74 cents per diluted share.)
Overall, Genesco’s sales dipped 1 percent to $713 million, reflecting a calendar shift as opposed to lagging momentum, according to president, chairman and CEO Roger Dennis. Despite the moderate declines, those results topped analysts’ forecasts for $712 million. The firm’s comparable sales also improved 4 percent — the highest quarterly comparable sales increase at the company in more than two years, driven by “the ongoing strength of our U.S. footwear businesses,” Dennis said.
“Journeys and Johnston & Murphy delivered strong performances both in-store and online, which fueled an acceleration in our combined consolidated store and digital comps on a sequential basis,” he added. “While still negative, sales trends at both the Lids Sports Group and Schuh Group continued to improve following a very challenging start to the year.”
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Comparable sales at Lids fell 2 percent during the period, an improvement from last year’s same period, when comps fell 6 percent. But, Schuh’s comps’ dipped 4 percent, compared with a gain of 4 percent last year.
Looking ahead, the company narrowed its previously announced guidance range for adjusted earnings per share and reiterated its expectation that earnings for the year will be near the midpoint of the range. Genesco expects comparable sales to be up 2 percent to 3 percent and adjusted diluted EPS in the range of $3.10 to $3.40.
Despite a better-than-expected performance during the period, investors sold off Genesco’s shares sending the stock down 1.5 percent to $42.36 as of 11:30 a.m. ET. (Overall, the markets have been down for much of the morning on fears over U.S.-China relations and tumbling crude oil prices.)
Journeys Is Selling a Lot of Shoes — Now Genesco Is Back in the Black