Genesco Inc. delivered a stronger-than-anticipated first quarter as sales surged across its portfolio of brands.
For the three months ended May 1, the Nashville, Tenn.-based company posted adjusted profits of $11.6 million, or earnings of 79 cents per share, compared with the prior year’s loss of $51.4 million, or loss of $3.65 per share. The figure blasted past Wall Street’s predictions of a loss of 52 cents per share. Revenues surged 93% to $539 million, also besting analysts’ projections of $449.15 million.
Shares of Genesco jumped in premarket trading following the release of the results. As of 8:45 a.m. ET, GCO stock was up 7.15% to $62.49.
“Fiscal 2022 is off to a very strong start with a first quarter that meaningfully exceeded our expectations,” board chair, president and CEO Mimi Vaughn said in a statement. “Our momentum has been building each quarter following the disruption from COVID-19 last year and trends accelerated as the first quarter progressed.”
She added, “Even as the pandemic continued to impact our business to varying degrees, our exceptional performance reflects the strong competitive positions of our retail and branded concepts and the traction we are experiencing with the footwear-focused strategy we embarked on a couple of years ago, combined with a boost from U.S. government stimulus and pent-up demand as the economy reopened.”
According to Genesco, revenues were driven by a boost in store sales compared to last year’s first quarter, when many locations were shut down. (Overall, stores were open about 90% of possible days in the first quarter, versus the prior year’s 50%.) During the recent period, it saw digital comps rise 43% as well as increased wholesale sales.
What’s more, sales spiked across all of the retail group’s brands: It noted “record” revenues and profits at Journeys, whose sales spiked 123%. Schuh and Johnston & Murphy recorded respective gains of 46% and 26%, while Genesco’s licensed brands were up 84%.
Interim CFO Thomas George added, “We were very pleased that the first quarter continued the sequential improvement of our operating results since the onset of the pandemic, as our top and bottom lines far outpaced last year’s levels and exceeded first quarter fiscal 2020 two years ago.”
Leading up to the health crisis, Genesco logged 11 consecutive quarters of positive comps growth for its shoe brands. It doubled down on digital, reshaped the cost structure of its brick-and-mortar fleet and fortified its cash position over the past year. At the end of the first quarter, it had cash and equivalents of $258 million, with total debt of $44.2 million.
While the company did not provide guidance for the 2022 fiscal year, Vaughn concluded, “With a strong balance sheet, we are well positioned to further invest in growth and create even greater value for our shareholders.”