Genesco Inc. (NYSE: GCO) today reported third quarter results
for the three months ended October 28, 2023.
Third Quarter Fiscal 2024 Financial Summary
- Net sales of $579 million decreased 4% compared to Q3FY23
- Comps down 4%, with stores down 7% and direct up 8%
- E-commerce sales represented 21% of retail sales compared to
18% last year
- GAAP EPS from continuing operations was $0.60 vs. $1.66 last
year
- Non-GAAP EPS from continuing operations was $0.571 vs. $1.65
last year
Mimi E. Vaughn, Genesco’s Board Chair, President and Chief
Executive Officer, said, “Following a good Back-to-School season,
demand in October softened in an ongoing challenging operating
environment, along with a delayed start to the fall selling season.
Disruptions related to implementation of a new ERP system for our
branded businesses added to the pressure, all leading to results
that were below our expectations. Despite these headwinds, we were
pleased to see sales trends within our Journeys business continue
to sequentially improve, and Schuh and Johnston & Murphy
deliver record third-quarter sales. In the meantime, we continued
to inject Journeys’ product assortment with more of the newness and
must-have items our customer desires, while also executing on our
cost reduction and store closure plans.”
Vaughn continued, “Fourth quarter-to-date, I’m pleased to say
our total comps are currently running positive and we experienced a
strong start to the holiday season. However, as consumer shopping
behavior remains choppy, we plan to increase our promotional
activity, especially at Journeys, for the remainder of the holiday
season to be more competitive and drive sales in this environment.
Our revised Fiscal 2024 outlook reflects this, partially offset by
a somewhat more conservative view for our other businesses. Looking
ahead, I have confidence that our strategic initiatives and
specific efforts to elevate Journeys in the marketplace will help
us continue to drive progress in the near term while positioning us
even more strongly to create value for the longer term.”
__________________________
1Excludes a charge for asset impairments,
net of tax effect in the third quarter of Fiscal 2024 (“Excluded
Items”). A reconciliation of earnings (loss) and earnings (loss)
per share from continuing operations in accordance with U.S.
Generally Accepted Accounting Principles (“GAAP”) with the adjusted
earnings (loss) and earnings (loss) per share numbers is set forth
on Schedule B to this press release. The Company believes that
disclosure of earnings (loss) and earnings (loss) per share from
continuing operations adjusted for the items not reflected in the
previously announced expectations will be meaningful to investors,
especially in light of the impact of such items on the results.
Third Quarter Review
Net sales for the third quarter of Fiscal 2024 of $579 million
decreased 4% compared to $604 million in the third quarter of
Fiscal 2023. The sales decrease compared to last year was driven by
decreased store sales in Journeys Group and decreased wholesale
sales in Genesco Brands Group, partially offset by an 8% increase
in e-commerce comparable sales and a favorable foreign exchange
impact.
Comparable Sales
Comparable Same Store and Direct
Sales:
3QFY24
3QFY23
Journeys Group
(8)%
1%
Schuh Group
5%
3%
Johnston & Murphy Group
1%
20%
Total Genesco Comparable Sales
(4)%
3%
Same Store Sales
(7)%
2%
Comparable Direct Sales
8%
6%
The overall sales decrease of 4% for the third quarter of Fiscal
2024 compared to the third quarter of Fiscal 2023 was driven by a
decrease of 8% at Journeys and a 22% or $8 million decrease at
Genesco Brands, partially offset by an increase of 13% at Schuh and
an increase of 2% at Johnston & Murphy. On a constant currency
basis, Schuh had record third quarter sales, which were up 5%.
Third quarter gross margin this year was 48.1%, down 60 basis
points compared with 48.7% last year. The decrease as a percentage
of sales compared to Fiscal 2023 is due primarily to increased
promotional activity at Journeys, including introductory coupons
for their new loyalty program, more normalized markdowns and
closeouts at Johnston & Murphy and increased shipping and
warehouse expense in all retail businesses, reflecting increased
warehouse costs and higher e-commerce penetration, partially offset
by improved margins at Schuh and Genesco Brands.
Selling and administrative expense for the third quarter this
year increased 190 basis points as a percentage of sales compared
with last year. Adjusted selling and administrative expense for the
third quarter this year also increased 190 basis points as a
percentage of sales compared with last year. The increase as a
percentage of sales compared to Fiscal 2023 reflects the deleverage
of expenses, especially compensation, marketing and depreciation
expenses, as a result of decreased revenue in the third quarter of
Fiscal 2024. In absolute dollars, selling and administrative
expenses were flat for the third quarter this year compared to last
year.
Genesco’s GAAP operating income for the third quarter was $10.9
million, or 1.9% of sales this year, compared with $26.1 million,
or 4.3% of sales in the third quarter last year. Adjusted for the
Excluded Items in all periods, operating income for the third
quarter was $11.0 million this year compared to $26.3 million last
year. Adjusted operating margin was 1.9% of sales in the third
quarter of Fiscal 2024 and 4.4% in the third quarter last year.
The effective tax rate for the quarter was 22.5% in Fiscal 2024
compared to 18.7% in the third quarter last year. The adjusted tax
rate, reflecting Excluded Items, was 27.8% in Fiscal 2024 compared
to 19.6% in the third quarter last year. The higher adjusted tax
rate for the third quarter this year compared to the third quarter
last year primarily reflects that we are no longer subject to a
valuation allowance in certain jurisdictions.
GAAP earnings from continuing operations were $6.6 million in
the third quarter of Fiscal 2024 compared to $20.4 million in the
third quarter last year. Adjusted for the Excluded Items in all
periods, third quarter earnings from continuing operations were
$6.2 million, or $0.57 per share, in Fiscal 2024, compared to $20.4
million, or $1.65 per share, in the third quarter last year.
Cash, Borrowings and Inventory
Cash as of October 28, 2023 was $21.7 million, compared with
$32.1 million as of October 29, 2022. Total debt at the end of the
third quarter of Fiscal 2024 was $128.2 million compared with $89.4
million at the end of last year’s third quarter. Inventories
decreased 8% on a year over year basis reflecting decreased
inventory for Journeys and Johnston & Murphy, partially offset
by an increase at Schuh.
Capital Expenditures and Store Activity
For the third quarter this year, capital expenditures were $15
million, related primarily to retail stores and digital and
omnichannel initiatives. Depreciation and amortization was $12
million. During the quarter, the Company opened five stores and
closed 20 stores. The Company ended the quarter with 1,360 stores
compared with 1,404 stores at the end of the third quarter last
year, or a decrease of 3%. Square footage was down 1% on a
year-over-year basis.
Share Repurchases
The Company did not repurchase any shares during the third
quarter of Fiscal 2024. The Company currently has $52.1 million
remaining on its expanded share repurchase authorization announced
in June 2023.
Store Closing and Cost Savings Update
- The Company remains on track to close approximately 100
Journeys stores in Fiscal 2024
- The Company continues to anticipate up to $40 million in cost
reductions by the end of Fiscal 2025
Revised Fiscal 2024 EPS Outlook
For Fiscal 2024, the Company:
- Now expects sales to be down 1% to 2%, or down 2% to 3%
excluding the 53rd week this year, compared to Fiscal 2023
- Now expects adjusted diluted earnings per share from continuing
operations in the range of $1.50 to $2.00, with an expectation that
EPS will be near the mid-point of the range 2
- Guidance assumes no further share repurchases and a tax rate of
24%
Conference Call, Management Commentary and Investor
Presentation
The Company has posted detailed financial commentary and a
supplemental financial presentation of third quarter results on its
website, www.genesco.com, in the investor relations section. The
Company's live conference call on December 1, 2023, at 7:30 a.m.
(Central time), may be accessed through the Company's website,
www.genesco.com. To listen live, please go to the website at least
15 minutes early to register, download and install any necessary
software.
__________________________
2A reconciliation of the adjusted
financial measures cited in the guidance to their corresponding
measures as reported pursuant to GAAP is included in Schedule B to
this press release.
Safe Harbor Statement
This release contains forward-looking statements, including
those regarding future sales, earnings, operating income, gross
margins, expenses, capital expenditures, depreciation and
amortization, tax rates, store openings and closures, cost
reductions, ESG progress and all other statements not addressing
solely historical facts or present conditions. Forward-looking
statements are usually identified by or are associated with such
words as “intend,” “expect,” “feel,” “believe,” “anticipate,”
“optimistic,” “confident” and similar terminology. Actual results
could vary materially from the expectations reflected in these
statements. A number of factors could cause differences. These
include adjustments to projections reflected in forward-looking
statements, including those resulting from weakness in store and
shopping mall traffic, restrictions on operations imposed by
government entities and/or landlords, changes in public safety and
health requirements, and limitations on the Company’s ability to
adequately staff and operate stores. Differences from expectations
could also result from store closures and effects on the business
as a result of civil disturbances; the level and timing of
promotional activity necessary to maintain inventories at
appropriate levels; our ability to pass on price increases to our
customers; the imposition of tariffs on product imported by the
Company or its vendors as well as the ability and costs to move
production of products in response to tariffs; the Company’s
ability to obtain from suppliers products that are in-demand on a
timely basis and effectively manage disruptions in product supply
or distribution, including disruptions as a result of pandemics or
geopolitical events; unfavorable trends in fuel costs, foreign
exchange rates, foreign labor and material costs, and other factors
affecting the cost of products; our ability to renew our license
agreements; impacts of the Russia-Ukraine war, and other sources of
market weakness in the U.K. and Republic of Ireland; the
effectiveness of the Company's omnichannel initiatives; costs
associated with changes in minimum wage and overtime requirements;
wage pressure in the U.S. and the U.K.; weakness in the consumer
economy and retail industry; competition and fashion trends in the
Company's markets; risks related to the potential for terrorist
events; risks related to public health and safety events; changes
in buying patterns by significant wholesale customers; retained
liabilities associated with divestitures of businesses including
potential liabilities under leases as the prior tenant or as a
guarantor; and changes in the timing of holidays or in the onset of
seasonal weather affecting period-to-period sales comparisons.
Additional factors that could cause differences from expectations
include the ability to secure allocations to refine product
assortments to address consumer demand; the ability to renew leases
in existing stores and control or lower occupancy costs, to open or
close stores in the number and on the planned schedule, and to
conduct required remodeling or refurbishment on schedule and at
expected expense levels; the Company’s ability to realize
anticipated cost savings, including rent savings; the amount and
timing of share repurchases; the Company’s ability to achieve
expected digital gains and gain market share; deterioration in the
performance of individual businesses or of the Company's market
value relative to its book value, resulting in impairments of fixed
assets, operating lease right of use assets or intangible assets or
other adverse financial consequences and the timing and amount of
such impairments or other consequences; unexpected changes to the
market for the Company's shares or for the retail sector in
general; our ability to meet our sustainability, stewardship,
emission and diversity, equity and inclusion related ESG
projections, goals and commitments; costs and reputational harm as
a result of disruptions in the Company’s business or information
technology systems either by security breaches and incidents or by
potential problems associated with the implementation of new or
upgraded systems; the Company’s ability to realize any anticipated
tax benefits in both the amount and timeframe anticipated; and the
cost and outcome of litigation, investigations, environmental
matters and other disputes involving the Company. Additional
factors are cited in the "Risk Factors," "Legal Proceedings" and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" sections of, and elsewhere in, the Company’s
SEC filings, copies of which may be obtained from the SEC website,
www.sec.gov, or by contacting the investor relations department of
Genesco via the Company’s website, www.genesco.com. Many of the
factors that will determine the outcome of the subject matter of
this release are beyond Genesco's ability to control or predict.
Genesco undertakes no obligation to release publicly the results of
any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. Forward-looking
statements reflect the expectations of the Company at the time they
are made. The Company disclaims any obligation to update such
statements.
About Genesco Inc.
Genesco Inc. (NYSE: GCO) is a footwear focused company with
distinctively positioned retail and lifestyle brands and proven
omnichannel capabilities offering customers the footwear they
desire in engaging shopping environments, including approximately
1,350 retail stores and branded e-commerce websites. Its Journeys,
Little Burgundy and Schuh brands serve teens, kids and young adults
with on-trend fashion footwear that inspires youth culture in the
U.S., Canada and the U.K. Johnston & Murphy serves the
successful, affluent man and woman with premium footwear, apparel
and accessories in the U.S. and Canada, and Genesco Brands Group
sells branded lifestyle footwear to leading retailers under
licensed brands including Levi’s, Dockers and G.H. Bass. Founded in
1924, Genesco is based in Nashville, Tennessee. For more
information on Genesco and its operating divisions, please visit
www.genesco.com.
GENESCO INC. Condensed Consolidated
Statements of Operations (in thousands, except
per share data) (Unaudited)
Quarter 3
Quarter 3
October 28,
% of
October 29,
% of
2023
Net Sales
2022
Net Sales
Net sales
$
579,315
100.0
%
$
603,788
100.0
%
Cost of sales
300,890
51.9
%
309,981
51.3
%
Gross margin
278,425
48.1
%
293,807
48.7
%
Selling and administrative expenses
267,474
46.2
%
267,734
44.3
%
Asset impairments and other, net
99
0.0
%
-
0.0
%
Operating income
10,852
1.9
%
26,073
4.3
%
Other components of net periodic benefit cost
148
0.0
%
50
0.0
%
Interest expense, net
2,207
0.4
%
906
0.2
%
Earnings from continuing operations before income
taxes
8,497
1.5
%
25,117
4.2
%
Income tax expense
1,908
0.3
%
4,693
0.8
%
Earnings from continuing operations
6,589
1.1
%
20,424
3.4
%
Loss from discontinued operations, net of tax
(50
)
0.0
%
(48
)
0.0
%
Net Earnings
$
6,539
1.1
%
$
20,376
3.4
%
Basic earnings per
share: Before discontinued
operations
$
0.60
$
1.68
Net earnings
$
0.60
$
1.68
Diluted
earnings per share: Before
discontinued operations
$
0.60
$
1.66
Net earnings
$
0.60
$
1.65
Weighted-average shares outstanding:
Basic
10,898
12,138
Diluted
10,972
12,326
GENESCO INC. Condensed Consolidated
Statements of Operations (in thousands, except per
share data) (Unaudited)
Nine Months Ended
Nine Months Ended
October 28,
% of
October 29,
% of
2023
Net Sales
2022
Net Sales
Net sales
$
1,585,674
100.0
%
$
1,659,868
100.0
%
Cost of sales
828,921
52.3
%
860,303
51.8
%
Gross margin
756,753
47.7
%
799,565
48.2
%
Selling and administrative expenses
778,491
49.1
%
756,318
45.6
%
Goodwill impairment
28,453
1.8
%
-
0.0
%
Asset impairments and other, net
581
0.0
%
(154
)
0.0
%
Operating income (loss)
(50,772
)
-3.2
%
43,401
2.6
%
Other components of net periodic benefit cost
388
0.0
%
198
0.0
%
Interest expense, net
6,241
0.4
%
1,608
0.1
%
Earnings (loss) from continuing operations before
income taxes
(57,401
)
-3.6
%
41,595
2.5
%
Income tax expense (benefit)
(13,483
)
-0.9
%
8,551
0.5
%
Earnings (loss) from continuing operations
(43,918
)
-2.8
%
33,044
2.0
%
Loss from discontinued operations, net of tax
(98
)
0.0
%
(78
)
0.0
%
Net Earnings (Loss)
$
(44,016
)
-2.8
%
$
32,966
2.0
%
Basic earnings
(loss) per share: Before
discontinued operations
$
(3.87
)
$
2.61
Net earnings (loss)
$
(3.88
)
$
2.61
Diluted
earnings (loss) per share:
Before discontinued operations
$
(3.87
)
$
2.56
Net earnings (loss)
$
(3.88
)
$
2.56
Weighted-average shares outstanding:
Basic
11,353
12,637
Diluted
11,353
12,901
GENESCO INC.
Sales/Earnings Summary by Segment (in
thousands) (Unaudited)
Quarter 3
Quarter 3
October 28,
% of
October 29,
% of
2023
Net Sales
2022
Net Sales
Sales: Journeys
Group
$
349,367
60.3
%
$
380,619
63.0
%
Schuh Group
118,129
20.4
%
104,809
17.4
%
Johnston & Murphy Group
81,411
14.1
%
79,614
13.2
%
Genesco Brands Group
30,408
5.2
%
38,746
6.4
%
Net Sales
$
579,315
100.0
%
$
603,788
100.0
%
Operating Income (Loss):
Journeys Group
$
11,975
3.4
%
$
27,083
7.1
%
Schuh Group
5,484
4.6
%
5,912
5.6
%
Johnston & Murphy Group
2,706
3.3
%
3,494
4.4
%
Genesco Brands Group
(1,560
)
-5.1
%
(1,927
)
-5.0
%
Corporate and Other(1)
(7,753
)
-1.3
%
(8,489
)
-1.4
%
Operating income
10,852
1.9
%
26,073
4.3
%
Other components of net periodic benefit cost
148
0.0
%
50
0.0
%
Interest, net
2,207
0.4
%
906
0.2
%
Earnings from
continuing operations before income taxes
8,497
1.5
%
25,117
4.2
%
Income tax expense
1,908
0.3
%
4,693
0.8
%
Earnings from continuing operations
6,589
1.1
%
20,424
3.4
%
Loss from discontinued operations, net of tax
(50
)
0.0
%
(48
)
0.0
%
Net Earnings
$
6,539
1.1
%
$
20,376
3.4
%
(1) Includes a $0.1 million charge in the
third quarter of Fiscal 2024 for asset impairments.
GENESCO INC. Sales/Earnings Summary by Segment
(in thousands) (Unaudited)
Nine Months Ended
Nine Months Ended
October 28,
% of
October 29,
% of
2023
Net Sales
2022
Net Sales
Sales: Journeys
Group
$
908,832
57.3
%
$
1,016,396
61.2
%
Schuh Group
334,033
21.1
%
294,486
17.7
%
Johnston & Murphy Group
241,823
15.3
%
225,448
13.6
%
Genesco Brands Group
100,986
6.4
%
123,538
7.4
%
Net Sales
$
1,585,674
100.0
%
$
1,659,868
100.0
%
Operating Income (Loss):
Journeys Group
$
(21,265
)
-2.3
%
$
51,235
5.0
%
Schuh Group
12,110
3.6
%
5,260
1.8
%
Johnston & Murphy Group
10,178
4.2
%
7,256
3.2
%
Genesco Brands Group
259
0.3
%
2,551
2.1
%
Corporate and Other(1)
(23,601
)
-1.5
%
(22,901
)
-1.4
%
Goodwill Impairment
(28,453
)
-1.8
%
-
0.0
%
Operating income (loss)
(50,772
)
-3.2
%
43,401
2.6
%
Other components of net periodic benefit cost
388
0.0
%
198
0.0
%
Interest, net
6,241
0.4
%
1,608
0.1
%
Earnings (loss)
from continuing operations before income taxes
(57,401
)
-3.6
%
41,595
2.5
%
Income tax expense (benefit)
(13,483
)
-0.9
%
8,551
0.5
%
Earnings (loss) from continuing operations
(43,918
)
-2.8
%
33,044
2.0
%
Loss from discontinued operations, net of tax
(98
)
0.0
%
(78
)
0.0
%
Net Earnings (Loss)
$
(44,016
)
-2.8
%
$
32,966
2.0
%
(1) Includes a
$0.6 million charge in the first nine months of Fiscal 2024 for
asset impairments. Includes a $0.2 million gain in
the first nine months of Fiscal 2023 which includes a $0.7 million
gain on the termination of the pension plan, partially offset by
$0.5 million for asset impairments.
GENESCO INC. Condensed
Consolidated Balance Sheets (in
thousands) (Unaudited)
October 28, 2023 October 29, 2022
Assets Cash
$
21,691
$
32,113
Accounts receivable
56,934
48,670
Inventories
516,735
563,490
Other current assets(1)
43,350
37,575
Total current assets
638,710
681,848
Property and equipment
245,009
221,207
Operating lease right of use assets
459,524
483,403
Goodwill and other intangibles
35,725
64,111
Non-current prepaid income taxes
55,632
52,319
Other non-current assets
58,331
34,105
Total Assets
$
1,492,931
$
1,536,993
Liabilities and Equity
Accounts payable
$
186,683
$
223,404
Current portion long-term debt
-
3,484
Current portion operating lease liabilities
134,850
136,294
Other current liabilities
75,631
82,193
Total current liabilities
397,164
445,375
Long-term debt
128,163
85,904
Long-term operating lease liabilities
387,347
413,096
Other long-term liabilities
43,299
33,275
Equity
536,958
559,343
Total Liabilities and Equity
$
1,492,931
$
1,536,993
(1) Includes
prepaid income taxes of $18.0 million and $13.3 million at October
28, 2023 and October 29, 2022, respectively.
GENESCO INC. Store Count
Activity
Balance
Balance
Balance
01/29/22
Open
Close
01/28/23
Open
Close
10/28/23
Journeys Group
1,135
22
27
1,130
24
74
1,080
Schuh Group
123
4
5
122
2
0
124
Johnston & Murphy Group
167
2
11
158
1
3
156
Total Retail Stores
1,425
28
43
1,410
27
77
1,360
GENESCO INC. Store Count
Activity
Balance
Balance
07/29/23
Open
Close
10/28/23
Journeys Group
1,095
5
20
1,080
Schuh Group
124
0
0
124
Johnston & Murphy Group
156
0
0
156
Total Retail Stores
1,375
5
20
1,360
GENESCO INC. Comparable Sales(1)
Quarter 3
Nine Months
Oct. 28,
Oct. 29,
Oct. 28,
Oct. 29,
2023
2022
2023
2022
Journeys Group
-8
%
1
%
-10
%
NA Schuh Group
5
%
3
%
11
%
NA Johnston & Murphy Group
1
%
20
%
10
%
NA Total Comparable Sales
-4
%
3
%
-4
%
NA Same Store Sales
-7
%
2
%
-7
%
NA Comparable Direct Sales
8
%
6
%
10
%
-9
%
(1) As a result of store closures in response to the
COVID-19 pandemic during the first quarter of Fiscal 2022, and the
Company's policy of removing any store closed for seven consecutive
days from comparable sales, the Company did not include comparable
sales for the first nine months of Fiscal 2023, except for
comparable direct sales, as it felt that overall sales was a more
meaningful metric last year. Schedule B Genesco Inc.
Adjustments to Reported Earnings from Continuing Operations Three
Months Ended October 28, 2023 and October 29, 2022 The
Company believes that disclosure of earnings and earnings per share
from continuing operations and operating income adjusted for the
items not reflected in the previously announced expectations will
be meaningful to investors, especially in light of the impact of
such items on the results.
Quarter 3
Quarter 3
October 28, 2023 October 29,
2022
Net of Per Share Net of
Per Share In Thousands (except per share amounts)
Pretax Tax Amounts
Pretax Tax Amounts Earnings from continuing
operations, as reported
$
6,589
$0.60
$
20,424
$1.66
Asset impairments and other adjustments:
Asset impairment
charges
$
99
79
0.01
$
-
(3
)
0.00
Fees related to shareholder activist
-
-
0.00
-
(2
)
0.00
Expenses related to new HQ building
-
-
0.00
257
200
0.01
Total asset impairments and other adjustments
$
99
79
0.01
$
257
195
0.01
Income tax expense adjustments:
Tax impact share based awards
48
0.00
28
0.00
Other tax items
(509
)
(0.04
)
(251
)
(0.02
)
Total income tax expense adjustments
(461
)
(0.04
)
(223
)
(0.02
)
Adjusted earnings from continuing operations (1) and (2)
$
6,207
$0.57
$
20,396
$1.65
(1) The adjusted tax rate for the third quarter of
Fiscal 2024 and 2023 is 27.8% and 19.6%, respectively.
(2) EPS reflects 11.0 million and 12.3 million share count for the
third quarter of Fiscal 2024 and 2023, respectively, which includes
common stock equivalents in both periods. Genesco Inc.
Adjustments to Reported Operating Income and Selling and
Administrative Expenses Three Months Ended October 28, 2023 and
October 29, 2022
Quarter 3 - October 28,
2023 Operating Asset
Impair Adj Operating In Thousands
Income (Loss) & Other Adj
Income (Loss) Journeys Group
$
11,975
$
-
$
11,975
Schuh Group
5,484
-
5,484
Johnston & Murphy Group
2,706
-
2,706
Genesco Brands Group
(1,560
)
-
(1,560
)
Goodwill Impairment
-
-
-
Corporate and Other
(7,753
)
99
(7,654
)
Total Operating Income
$
10,852
$
99
$
10,951
% of sales
1.9
%
1.9
%
Quarter 3 - October 29, 2022
Operating Asset Impair Adj Operating In
Thousands Income (Loss) & Other Adj
Income (Loss) Journeys Group
$
27,083
$
-
$
27,083
Schuh Group
5,912
-
5,912
Johnston & Murphy Group
3,494
-
3,494
Genesco Brands Group
(1,927
)
-
(1,927
)
Corporate and Other
(8,489
)
257
(8,232
)
Total Operating Income
$
26,073
$
257
$
26,330
% of sales
4.3
%
4.4
%
Quarter 3 In Thousands
Oct. 28,
2023 Oct. 29, 2022 Selling and administrative
expenses, as reported
$
267,474
$
267,734
Expenses related to new HQ building
-
(257
)
Total adjustments
-
(257
)
Adjusted selling and administrative expenses
$
267,474
$
267,477
% of sales
46.2
%
44.3
%
Schedule B Genesco Inc. Adjustments to Reported Earnings
(Loss) from Continuing Operations Nine Months Ended October 28,
2023 and October 29, 2022 The Company believes that
disclosure of earnings (loss) and earnings (loss) per share from
continuing operations and operating income (loss) adjusted for the
items not reflected in the previously announced expectations will
be meaningful to investors, especially in light of the impact of
such items on the results.
Nine Months Nine Months
October 28, 2023
October 29, 2022
Net of Per Share Net of Per
Share In Thousands (except per share amounts)
Pretax Tax Amounts Pretax Tax Amounts
Earnings (loss) from continuing operations, as reported
$
(43,918
)
($3.87
)
$
33,044
$2.56
Asset impairments and other adjustments:
Asset impairment charges
$
581
446
0.04
$
541
454
0.04
Goodwill impairment charge
28,453
21,858
1.93
-
-
0.00
Gain on pension termination
-
-
0.00
(695
)
(520
)
(0.04
)
Expenses related to new HQ building
-
-
0.00
2,545
1,905
0.15
Total asset impairments and other adjustments
$
29,034
22,304
1.97
$
2,391
1,839
0.15
Income tax expense adjustments:
Tax impact share
based awards
1,059
0.09
(635
)
(0.05
)
Other tax items
(1,578
)
(0.14
)
(250
)
(0.02
)
Total income tax expense adjustments
(519
)
(0.05
)
(885
)
(0.07
)
Adjusted earnings (loss) from continuing operations (1) and
(2)
$
(22,133
)
($1.95
)
$
33,998
$2.64
(1) The adjusted tax rate for the first
nine months of Fiscal 2024 and 2023 is 22.0% and 22.7%,
respectively. (2) EPS reflects 11.4 million and 12.9 million
share count for the first nine months of Fiscal 2024 and 2023,
respectively, which includes common stock equivalents in the first
nine months last year but not in this year due to the loss from
continuing operations. Genesco Inc. Adjustments to Reported
Operating Income (Loss) and Selling and Administrative Expenses
Nine Months Ended October 28, 2023 and October 29, 2022
Nine Months October 28, 2023
Operating Asset Impair Adj
Operating In Thousands
Income (Loss)
& Other Adj Income (Loss) Journeys
Group
$
(21,265
)
$
-
$
(21,265
)
Schuh Group
12,110
-
12,110
Johnston & Murphy Group
10,178
-
10,178
Genesco Brands Group
259
-
259
Goodwill Impairment
(28,453
)
28,453
-
Corporate and Other
(23,601
)
581
(23,020
)
Total Operating Loss
$
(50,772
)
$
29,034
$
(21,738
)
% of sales
-3.2
%
-1.4
%
Nine Months October 29, 2022
Operating Asset Impair Adj Operating In
Thousands Income (Loss) & Other Adj
Income (Loss) Journeys Group
$
51,235
$
-
$
51,235
Schuh Group
5,260
-
5,260
Johnston & Murphy Group
7,256
-
7,256
Genesco Brands Group
2,551
-
2,551
Corporate and Other
(22,901
)
2,391
(20,510
)
Total Operating Income
$
43,401
$
2,391
$
45,792
% of sales
2.6
%
2.8
%
Nine Months In Thousands
Oct.
28, 2023 Oct. 29, 2022 Selling and
administrative expenses, as reported
$
778,491
$
756,318
Expenses related to new HQ building
-
(2,545
)
Total adjustments
-
(2,545
)
Adjusted selling and administrative expenses
$
778,491
$
753,773
% of sales
49.1
%
45.4
%
Schedule B Genesco Inc.
Adjustments to Forecasted Earnings (Loss) from Continuing
Operations Fiscal Year Ending February 3, 2024
In millions (except per share amounts) High
Guidance Low Guidance Fiscal 2024 Fiscal 2024
Net of Tax Per Share Net of Tax Per
Share Forecasted earnings (loss) from continuing operations
$
(0.7
)
$
(0.06
)
$
(6.8
)
$
(0.60
)
Asset impairments
and other adjustments:
Asset impairments and other matters
1.5
0.13
1.9
0.17
Goodwill impairment
21.9
1.93
21.9
1.93
Total asset impairments and other adjustments (1)
23.4
2.06
23.8
2.10
Adjusted
forecasted earnings from continuing operations (2)
$
22.7
$
2.00
$
17.0
$
1.50
(1) All adjustments are net of tax where applicable.
The forecasted tax rate for Fiscal 2024 is approximately 24%.
(2) EPS reflects 11.4
million share count for Fiscal 2024 which includes common stock
equivalents.
This reconciliation reflects estimates
and current expectations of future results. Actual results may vary
materially from these expectations and estimates, for reasons
including those included in the discussion of forward-looking
statements elsewhere in this release. The Company disclaims any
obligation to update such expectations and estimates.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231130578344/en/
Genesco Financial Contacts
Thomas A. George (615) 367-7465 tgeorge@genesco.com
Darryl MacQuarrie (615) 367-7672 dmacquarrie@genesco.com
Genesco Media Contact Claire
S. McCall (615) 367-8283 cmccall@genesco.com
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