Shares for Genesco Inc. are surging in pre-market trading after the firm announced second-quarter profits that blew past expectations and lifted its outlook for the fiscal year.
As of 9 a.m. ET, its stock was in the green nearly 18 percent to $41.55.
The parent company of teen mall staple Journeys and shoe brands Johnston & Murphy and Schuh produced Q2 adjusted profits of 15 cents per share — a complete reversal of the comparable period’s loss of 1 cents per share and a far cry from the 1 cent loss analysts had called for today.
Sales, meanwhile, held steady year over year at $487 million, but fell short of the $489 million market watchers projected.
Nevertheless, Robert Dennis, Genesco chairman, president and CEO, credited solid back-to-school momentum at Journeys, in particular, as well as at Schuh — throughout August — for top-line momentum as overall company comps improved 3% during the period. Journeys led the way in those gains, with its comparable sales up 4%, Schuh’s flat at 0% and Johnston & Murphy up 1%.
“Our outperformance was driven primarily by the ongoing strength of our Journeys business, which continued to experience strong comparable sales even as year-over-year comparisons became more difficult,” said Dennis. “The second quarter marked the ninth consecutive quarter of positive consolidated comparable sales for our footwear businesses and included positive store and digital comps. At the same time, gross margins improved at each of our divisions, helping offset incremental marketing investments to achieve operating profit and earnings per share well above last year’s levels.”
In tandem with the better-than-expected results, Genesco boosted its fiscal year outlook and now expects earnings per share to be between $3.80 to $4.20, with an expectation that earnings for the year will be near the mid-point of the range, up from the previous range of $3.35 to $3.75.
“Our recent performance represents a great start to our first fiscal year as a footwear-focused company and we believe that the strategic course we have set for Genesco will result in improved profitability and increased shareholder value over the long-term,” Dennis noted.