Nov 19, 2008
Genesco shares hit 6-year low on weak outlook
Nov 19, 2008
BANGALORE, Nov 19 (Reuters) - Shares of Genesco Inc fell 39 percent to their lowest level in six years on Wednesday, a day after the shoe and hat retailer forecast weak third-quarter results, hurt mainly by lower same-store sales at its Johnston & Murphy Group, and guided its fourth-quarter earnings below Street view.
At least two brokerages slashed their price target on the Genesco shares following the company's weak outlook announcement.
Many apparel and shoe companies, including Brown Shoe Co , have been hurt by the ongoing downturn in the U.S. consumer market as more and more buyers stop short of spending on non-essentials.
"Genesco's comp trend has deteriorated of late, and we expect the company's performance to continue to be hampered by difficult market conditions through at least the first half of next year," Robert W. Baird & Co analyst Mitch Kummetz wrote in a note to clients.
Mitch cut his price target on the stock by $21 to $19, but maintained "neutral" rating. Baird maintains a trading market in Genesco shares.
"While footwear had been a relative outperform as the fashion cycle trended negative, Genesco's report suggests we may be nearing a point of maturing in the footwear cycle as well," Piper Jaffray analyst Jeffrey Klinefelter wrote in a note to clients.
He cut his price target on the stock to $17 from $35.
Piper Jaffray was making a market in the shares of Genesco at the time its research report was published. It has a "neutral" rating on the stock.
For the third quarter ended Nov. 2, the Nashville, Tennessee-based company expects earnings of 41 cents to 43 cents a share from continuing operations, excluding items, and net sales of about $390 million.
Analysts on average were expecting it to earn 53 cents a share, before items, on revenue of $395.9 million, according to Reuters Estimates.
The company is scheduled to report its third-quarter results on Nov. 25.
Genesco, whose other brands include Journeys, Lids and Hat Zone, said it expects same-store sales to fall 15 percent at Johnston & Murphy Group in the third quarter.
For the fourth quarter, Genesco expects total same-store sales to fall between 1 percent to 4 percent based on same-store sales trends throughout the third quarter and into early November.
November total same-store sales through Nov. 16 are down 9 percent, the company said in a statement.
Genesco, whose rivals includes Hibbett Sports Inc , Finish Line Inc and Buckle Inc forecast a profit of $1.06 to $1.20 a share for the fourth quarter. Analysts were expecting $1.35 a share, before items.
The company's shares pared some losses and were trading down $5.61 at $12.11 in afternoon trade, after touching a low of $10.81 earlier. They were among the top percentage losers on the New York Stock Exchange.
For the alerts, please click . For the press release, please click (Reporting by Dilipp S. Nag in Bangalore; Editing by Amitha Rajan, Jarshad Kakkrakandy)
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