Shares of Genesco Inc. is surging double digits in Friday premarket trading following the release of a better-than-expected third-quarter report.
For the three months ended Oct. 31, the specialty retailer — parent to the Journeys, Schuh and Johnston & Murphy brands — logged adjusted earnings of 85 cents, compared with the prior year’s $1.33. Analysts had forecasted a loss of 14 cents per share. Revenues fell 11% to $479 million but still trounced consensus bets of $457.21 million.
As of 8:15 a.m. ET, the company’s stock was up more than 10% to $34.
According to Genesco, the revenue decline was driven by lower store comps, which was impacted by decreased back-to-school sales and continued pressure at Johnston & Murphy. What’s more, stores were open 95% of the days during the third quarter, but revenues were partially offset by e-commerce growth of 62%.
Overall sales were down 10% for Journeys, 3% at Schuh and 45% at Johnston & Murphy, while sales rose 91% at its licensed brands division, due to the Togast acquisition in the previous year’s fourth quarter.
“Journeys and Schuh performed well despite recent pressures, underscoring the strong strategic market positions and tremendous customer loyalty both have built over time, along with the ability to pivot and capitalize on the accelerated shift to online spending,” board chair, president and CEO Mimi Vaughn said in a statement. “At the same time, Johnston & Murphy’s business has been slower to recover as the brand’s competitive space faces stronger headwinds from the pandemic.”
Vaughn also shared that traffic was “more subdued than usual” during the Black Friday weekend. However, sales were in line with expectations throughout the month of November, even as Genesco faced headwinds from another round of temporary store closures in certain parts of North America and the United Kingdom. Today, the Nashville-based business is operating in 97% of its brick-and-mortar locations, including roughly 1,150 Journeys, 170 Johnston & Murphy and 110 Schuh locations.
“With the vast majority of the holiday season ahead of us, we believe we are well positioned to meet demand regardless of when and how the consumer decides to shop, thanks to the technology investments we’ve made in our stores and e-commerce platforms,” she added. “It’s a privilege to lead a team that is facing the challenges brought by COVID-19 head on, adapting continuously to the dynamic retail environment. This is bolstering my optimism that we will successfully weather this storm and emerge strong to take advantage of the many opportunities the pandemic has created.”