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Post Earnings Coverage as Genesco's Quarterly EPS Grew Approximately 16%

Upcoming AWS Coverage on New York & Co. Post-Earnings Results

LONDON, UK / ACCESSWIRE / March 24, 2017 / Active Wall St. announces its post-earnings coverage on Genesco Inc. (NYSE: GCO) as the Company reported its financial results for its fourth quarter and fiscal 2017 on March 10, 2017. The footwear, hats, clothing, and accessories seller surpassed earnings estimates. Register with us now for your free membership at:


One of Genesco's competitors within the Apparel Stores space, New York & Company, Inc. (NYSE: NWY), released its Q4 2016 and FY16 results after the market closed on Thursday, March 16, 2017. AWS will be initiating a research report on New York & Co. in the coming days.

Today, AWS is promoting its earnings coverage on GCO; touching on NWY. Get our free coverage by signing up to:


Earnings Reviewed

Genesco reported that net sales for the fourth quarter ended January 28, 2017, decreased 5% to $883.17 million from $932.21 million in Q4 FY16, reflecting the sale of the Lids Team Sports business in Q4 FY16 and a decline of 2%in sales from the remaining businesses. The Company's revenue numbers came in below analysts' consensus of 903.2 million.

Genesco's consolidated comparable sales, including same store sales and comparable ecommerce and Catalog sales were flat in the reported quarter, with an 8% increase in the Lids Sports Group, a 6% decrease in the Journeys Group, a 2% increase in the Schuh Group, and a 1% decrease in the Johnston & Murphy Group. Comparable sales for the Company reflected a 2% decrease in same store sales and a 12% increase in ecommerce sales.

For Q4 FY17, Genesco's gross margin improved 190 basis points to 47.3%, led by Lids and Schuh, where better results offset declines in Journeys. Gross margin for Lids improved approximately 700 basis points, partly reflecting the sale of Lids team sports, which was a lower margin business. The Company stated that improvement in the retail business was a very healthy 400 basis points, as Lids anniversaried its inventory rightsizing and a particularly intense level of clearance activity in Q4 FY16. During the reported quarter, Schuh's gross margin improvement of 380 basis points was also significant as Schuh anniversaried very heavy promotional activity that resulted from last year's difficult holiday season. Journey's gross margin decreased 190 basis points.

For Q4 FY17, Genesco's earnings from continuing operations were $46.54 million, or $2.40 per diluted share, compared to earnings from continuing operations of $44.66 million, or $2.07 per diluted share, for Q4 FY16. The reported quarter results reflected a $0.25 per diluted share gain after tax, including a gain on the sale of SureGrip Footwear of $12.3 million and a gain of $0.8 million on other legal matters, which was partially offset by $3.9 million of asset impairment charges, pension settlement expenses, and other items. Adjusted for certain items, earnings from continuing operations were $41.8 million, or $2.15 per diluted share, for Q4 FY17 compared to earnings from continuing operations of $45.8 million, or $2.11 per diluted share, for Q4 FY16. The Company's earnings results smashed past Wall Street's expectation of $1.79 per share.

Fiscal 2017 Results

For the year ended January 28, 2017, Genesco reported sales of $2.9 billion, down 5% compared to net sales of $3.0 billion for the year ended January 30, 2016, reflecting the sale of the Lids Team Sports business and a 1% declined in sales from the remaining businesses.

Genesco's earnings from continuing operations for FY17 were $97.9 million, or $4.85 per diluted share, compared to earnings from continuing operations of $95.4 million, or $4.15 per diluted share, for FY16. On an adjusted basis, the Company reported earnings from continuing operations of $87.2 million, or $4.33 per diluted share, for FY17, compared to earnings from continuing operations of $98.6 million, or $4.29 per diluted share, for the year ago period.

Balance Sheet

In Q4 FY17, Genesco's total inventory was up 6%, or $34 million, on a sales decrease of 2%. This increase at year-end was attributable primarily to Journeys and to Lids. Journeys' inventory was up, as anticipated, 10%, or $23 million, on a sales decrease of 3%. This was due to almost $40 million of new receipts in January. Capital expenditures for Q4 FY17 were $28 million and depreciation and amortization was $19 million.

In FY17, Genesco repurchased a total of 2.2 million shares of common stock for a total cost of $133 million and an average price of $61.81 per share. The Company did not repurchase any shares in Q4 FY17. Through the end of February 2017, the Company had repurchased 138,900 shares at a total cost of $8 million and an average price of $59.49.


For FY18, Genesco expects adjusted diluted earnings per share in the range of $4.40 to $4.55.These expectations do not include expected non-cash asset impairments and other charges, estimated in the range of $0.22 to $0.26 per share after tax, for the full fiscal year.

Stock Performance

At the closing bell, on Thursday, March 23, 2017, Genesco's stock rose slightly by 0.90%, ending the trading session at $55.75. A total volume of 275.46 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 237.19 thousand shares. In previous six months, shares of the Company have advanced 7.42%. Shares of the company have a PE ratio of 11.32. At Thursday's closing price, the stock's net capitalization stands at $1.11 billion.

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SOURCE: Active Wall Street