Genesco (GCO) Boosts Share Repurchase Program to Drive Returns
Genesco Inc. GCO has taken a significant step toward enhancing shareholder returns by authorizing a $50 million increase in its existing $200 million share repurchase program. This move underscores the company's recognition of the importance of share repurchases in maximizing value for investors.
Since September 2019, Genesco has been actively repurchasing shares under its existing program. With a total cost of approximately $189.5 million, the company has already repurchased 3.9 million shares, leaving $10.5 million remaining under the current authorization. In the current quarter, Genesco has continued to prioritize buybacks, acquiring around 676,000 shares at an average price of $21.41 per share, with a total cost of $14.5 million.
Over the course of its share repurchase endeavors since December 2018, this leading retailer of branded footwear and accessories has successfully bought back approximately 9.2 million shares at a total cost of around $415 million.
Share repurchase programs have become a popular tool to optimize capital allocation and drive shareholder value. When implemented thoughtfully, these programs can benefit investors through increased earnings per share and potential capital appreciation. This strategic move demonstrates the confidence that the board of directors places in the long-term prospects and intrinsic value of the company.
Genesco aims to implement this new authorization through various methods, including open market purchases, private transactions, block trades, or a combination of such methods, in accordance with SEC and other legal requirements.
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The company's decision to expand its share repurchase program sends a positive signal to the market. It reflects the company's belief in its long-term prospects and commitment to generating value for its shareholders. As Genesco continues to execute its growth strategy, investors can look forward to potentially reaping the benefits of the company's share repurchase initiatives.
Genesco’s Stock Performance
Shares of this Zacks Rank #5 (Strong Sell) company have fallen 44.4% so far in the year compared with the industry’s decline of 6.8%.
The stock's dismal run can be attributed to the company’s disappointing performance in first-quarter fiscal 2024. The quarter presented greater challenges than initially anticipated. Consumer demand at Journeys experienced a significant decline at the beginning of the quarter and did not recover. This offset the record sales at Schuh and Johnston & Murphy.
The company generated net sales of $483 million that witnessed a decline of 7% from the year-ago period. Comps were down 5% during the quarter. Considering the uncertainty surrounding near-term consumer behavior, management foresees 4-5% decline in net sales in fiscal 2024.
Pick These 3 Stocks
We have highlighted three better-ranked stocks, namely Abercrombie & Fitch ANF, Urban Outfitters URBN and G-III Apparel Group GIII.
Abercrombie & Fitch, a leading casual apparel retailer, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Abercrombie & Fitch’s current financial-year sales and EPS suggests growth of 3.4% and 732%, respectively, from the year-ago reported figures. ANF delivered a trailing four-quarter earnings surprise of 480.6%, on average.
Urban Outfitters, the lifestyle apparel and accessories retailer, currently sports a Zacks Rank of 1. The company has a trailing four-quarter earnings surprise of 12.2%, on average.
The consensus estimate for Urban Outfitters’ current financial-year sales and EPS suggests growth of 5.1% and 57.1%, respectively, from the year-ago reported figures. The expected EPS growth rate for three to five years is 18%.
G-III Apparel, a global fashion leader with expertise in design, sourcing and manufacturing, currently sports a Zacks Rank #1. G-III Apparel delivered an average earnings surprise of 47.4% in the trailing four quarters.
The Zacks Consensus Estimate for G-III Apparel’s current financial-year sales suggests growth of 1.9% from the year-ago period. The expected EPS growth rate for three to five years is 15%.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
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