Genesco Inc. has logged larger-than-anticipated losses in the first quarter as the coronavirus pandemic shuttered all of its stores across the country.
For the three months ended May 2, the Nashville-based company posted an adjusted loss of $51.4 million, or a loss of $3.65 per share, compared with the prior year’s earnings of $5.9 million, or 33 cents a share. Revenues decreased 44% to $279 million, which the company attributed to the widespread closures across its brick-and-mortar fleet amid the COVID-19 health crisis.
Analysts had forecasted a loss of $2.52 per share and revenues of $306.47 million. As of 8:30 a.m. ET in premarket trading, Genesco’s stock was down more than 10% to $25.09.
Despite setbacks at brick-and-mortar stores, the company touted a 64% improvement in its digital comps, with last month’s e-commerce sales “increasing further above April’s substantial levels,” said president and CEO Mimi Vaughn.
Plus, roughly 1,000 of its outposts have now reopened, including more than 900 Journeys locations, which Vaughn added were “comping nicely positive to last year’s volumes for the same period.” The company reported that upwards of 80 Johnston & Murphy units as well as a “few” Schuh stores are also back in business. By the end of June, Genesco anticipates reopening nearly 85% of all stores. (It ended the quarter with 1,479 locations.)
“We entered the pandemic in a position of strength,” Vaughn shared in a statement. “Despite the challenges we faced from the decision in mid-March to temporarily close all of our stores, we were able to stay actively engaged with existing and new customers as we successfully leveraged the multiyear investments we’ve made advancing our digital commerce capabilities.”
In an effort to preserve liquidity, Genesco has borrowed $208 million on its existing lines of credit, extended payment terms with suppliers and managed inventory by trimming future receipts. It also furloughed and cut staff at its stores, corporate offices, call centers and distribution centers, as well as implemented salary reductions for its executive team.
At the end of the quarter, its cash and equivalents were $238.6 million. The company opted against providing an outlook for the fiscal year.
“There continues to be a good deal of uncertainty about near-term trends, and therefore we are planning sales conservatively and managing expenses and inventory accordingly,” Vaughn added. “We feel good about the strategic positioning of our businesses for the longer-term, and we believe that we’ve taken the necessary steps to navigate the near-term impact of this pandemic.”