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Genesco Caps Off ‘Incredibly Challenging Year’ With Earnings Beat

Genesco Inc. posted a better-than-expected fourth quarter as it seeks to take advantage of recent digital gains as well as fully reopen its brick-and-mortar fleet.

For the three months ended Jan. 30, the Nashville, Tenn.-based company logged adjusted earnings of $2.76 per share, compared with the prior year period’s adjusted earnings of $3.09 per share. Market watchers had predicted earnings of $1.96 per share.

Revenues dropped 6% to $637 million but also beat analysts’ forecasts of $617.55 million. The retail group attributed the decline to “continued pressure” at Johnston & Murphy, as well as the impact from coronavirus-related store closures. It noted that digital comps improved 55%.

“We concluded an incredibly challenging year with a fourth quarter that exceeded our expectations across the board, highlighted by strength at Journeys,” board chair, president and CEO Mimi Vaughn said in a statement. “Our improving performance throughout fiscal 2021 under difficult circumstances reflects the strength of our retail concepts prior to COVID-19 and our success capitalizing on the opportunities that emerged during the pandemic to fortify the leadership positions of our teen and young adult footwear businesses.”

By brand, sales were flat at Journeys, down 13% at Schuh and fell 42% at Johnston & Murphy while sales were up 84% at its licensed brands division due to the Togast acquisition in the previous year’s fourth quarter.

For the full year, Genesco saw an adjusted loss of $1.18 per share, compared with the prior year’s adjusted earnings of $4.58 per share. Revenues decreased 19% to $1.8 billion. However, Vaughn touted the digital investments made by the company over the past several years — which have allowed it to “take advantage of the accelerated shift to online spending to achieve record digital revenue” of nearly $450 million, or an increase of 74% year over year.

As of today, the retail group shared that 90% of its physical units have resumed operations, including about 1,145 Journeys stores, 160 Johnston & Murphy outposts and two Schuh locations. It added that it had $215.1 million in cash and equivalents at the end of the quarter.

“While we expect the environment to remain fluid in the near term, we are optimistic about our ability to solidify our recent digital gains and further expand our market share,” Vaughn said. “The events of the past year have provided us the opportunity to transform our business at a faster pace. We believe this, along with a solid balance sheet, have put us in a strong position to emerge from the pandemic, invest for growth and build great value for our shareholders.”

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