Journeys drives improved sales and earnings turnaround at Genesco
Footwear and accessories retailer Genesco Inc. managed to dig itself out of loss in the first quarter of 2019, as progress in the company’s better than expected sales was led by its Journeys brand.
The company’s net sales for the quarter ended May 4, 2019, rose 2% (3% in constant currencies) to $496 million, up from $486 million in the prior-year period. Comparable sales increased 5%, reflecting a 4% increase in same-store sales and a 15% rise in direct comps.
Journeys, which accounts for around 65% of Genesco’s revenues, posted a comparable sales increase of 7%, while the group’s second largest retail chain Schuh – representing just over 15% of total-company sales – achieved a 2% comps increase. Comparable sales at Johnston & Murphy were flat.
These improvements in sales, coupled with reduced expenses, helped Genesco to achieve net earnings of $6.3 million ($0.36 per share) in the first quarter, a drastic improvement from Q1 2018’s net loss of $2.3 million ($0.12 per share).
“Fiscal 2020 is off to a good start with improved results in every business,” said Genesco Chairman, President and CEO Robert J. Dennis in a release. “Our overall performance was fueled by the continued strength of our Journeys business, as the momentum from the successful back-to-school and holiday seasons carried over into the new year.”
Q1 2019 represents Genesco’s first quarter as a footwear-focused company, following the sale of its Lids fan gear brand at the end of last year, a gamble which looks to have paid off for the Nashville, Tennessee-based retailer.
In light of its strong first-quarter results, the company now expects its annual EPS to be at the higher end of the previously reported range of $3.35 to $3.75, while comparable sales are predicted to increase 1% to 2%.
Genesco currently operates through a network of over 1,500 stores in the US, Canada, the UK, Ireland and Germany, as well as through a range of brand-specific e-commerce websites.
Following the announcement of its results, shares in the company rose almost 12% on Friday.
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