Genesco Inc.’s renewed focus on footwear appears to be paying off.
The retailer — parent to teen mall staple Journeys and shoe firms Johnston & Murphy and Schuh — today posted first-quarter earnings that were well ahead of expectations, with an adjusted 33 cents per share versus analysts’ bets of just 4 cents.
Revenues also beat Wall Street’s estimates of $479.8 million, increasing 2% to $496 million, while same-store sales grew 5%.
At market open on Friday, Genesco’s shares were up 15% to $46.
“Fiscal 2020 is off to a good start, with improved results in every business,” said chairman, president and CEO Robert Dennis. “In our first quarter as a footwear-focused company following the recent sale of the Lids Sports Group, we delivered top- and bottom-line results that exceeded expectations. Our overall performance was fueled by the continued strength of our Journeys business, as the momentum from the successful back-to-school and holiday seasons carried over into the new year.”
In December, the Nashville, Tenn.-based company notably offloaded Lids Sports Group after several years of struggling sales at the division. The athletic headwear business sold for $100 million in cash to FanzzLids Holdings, with sports licensing and e-commerce firm Fanatics Inc. making a minority investment in FanzzLids as part of a commercial arrangement connected with the deal.
Despite its better-than-expected first quarter, Genesco is maintaining its guidance of EPS of $3.35 to $3.75, adjusting its outlook toward the higher end of the range versus its previous view closer to the midpoint. Dennis cited the performances of Johnston & Murphy and Schuh, as well as the “macroeconomic environments both in the U.S. and the U.K.” among the reasons for preserving its current range.
“Looking further ahead, we believe the work we’ve done sharpening our focus on operating footwear retail businesses and owning brands will fuel improved profitability and increased shareholder value over the long term,” he added.
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