As of 10 a.m. ET, the stock was down nearly 9 percent to $41.05.
The owner of Journeys, Johnston & Murphy and Schuh posted a net loss of $2.3 million, or 12 cents per diluted share, compared with profits of $885 million, or 5 cents per diluted share, in the year-ago period. On an adjusted basis, net losses were 6 cents per share, slightly better then analysts’ forecasts of 7 cents per share.
Sales held steady year over year at $645 million and bested market watchers’ estimates of $636 million. Comparable sales declined 1 percent, which was worse than analysts’ forecasts for a 0.1 percent drop. The company said the dip was driven by weakness at Schuh, where comps fell 13 percent — compared with a gain of 10 percent in last year’s same period.
At Journeys, Q1 comps rebounded to rise 6 percent — compared with last year’s 5 percent drop. Johnston & Murphy also enjoyed a 7 percent gain in comparable sales, while Lids Sports Group continued to struggle, down 7 percent.
“Our first quarter results in total were within the range of our expectations, as continued strength in our U.S. retail footwear businesses helped to offset in part challenges in our other operating divisions,” said president, chairman and CEO Robert Dennis. “Journeys in particular delivered robust comparable sales and significantly improved profitability. Johnston & Murphy began the year with accelerating comparable sales and a strong earnings performance as well. While sales trends in the Lids Sports Group remained negative, they improved meaningfully compared with the fourth quarter.”
Overall, gross margins were up nearly 50 percent, driven by increased full-priced selling at Journeys and Johnston & Murphy, Genesco’s chief added.
The company continues to expect full-year comparable sales to be flat to up 2 percent, and adjusted diluted EPS in the range of $3.05 to $3.45.
Dennis said the firm is “pleased” with its start to the second quarter as warmer weather accelerated demand for seasonal product and comps across its businesses. “While we remain cautious about Schuh’s near-term prospects, we are encouraged by the signs of improvement in our other major businesses, Journeys in particular,” he noted.