Genesco’s net sales flat in fiscal second quarter

Worldwide
Published:  11 September, 2019

The U.S. headquartered specialty retailer of branded footwear and accessories has nevertheless reported earnings per share (EPS) that exceed the company's expectations.

Genesco’s GAAP earnings from continuing operations per diluted share stood at US$0.05 for the three months ended August 3, 2019, against US$0.00 in the second quarter last year. Adjusted for the excluded items in both periods, the company reported second quarter earnings from continuing operations per diluted share of US$0.15, compared with a loss from continuing operations per diluted share of (US$0.01) in the corresponding period of 2018.

Net sales for the second quarter of fiscal 2020 were flat, year-on-year, at US$487 million. According to Genesco, excluding the effect of lower exchange rates, net sales would have increased 1%. Comparable sales increased 3%, with stores up 1% and direct sales up 20%, while direct-to-consumer sales were 10.4% of total retail sales for the quarter against 8.9% last year.

According to Genesco, the second quarter marked the ninth consecutive quarter of positive consolidated comparable sales for its footwear businesses and included positive store and digital comps. “At the same time, gross margins improved at each of our divisions, helping offset incremental marketing investments to achieve operating profit and earnings per share well above last year's levels”, said the company. Second quarter gross margin this year was 48.6%, up 110 basis points, compared with 47.5% in the previous fiscal year.

For its fiscal 2020, Genesco said it now expects comparable sales to be up 2% to 3%, and adjusted diluted earnings per share from continuing operations to be in the range of US$3.80 to US$4.20.

Genesco sells footwear and accessories online as well as in more than 1,490 retail stores throughout the U.S., Canada, the UK and the Republic of Ireland, principally under the names Journeys, Schuh, Little Burgundy, Johnston & Murphy.