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Apparel Retailer Genesco Shares Leap on Stronger-Than-Expected Third Quarter

Comparable-store sales rose 3% at the company, with brands including Journeys, Johnston & Murphy, Lids and more.
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Genesco  (GCO) - Get Genesco Inc. Report added one-third to its market capitalization on Friday as the Nashville footwear and apparel retailer reported fiscal third-quarter earnings stronger than analysts expected.

At last check, Genesco shares were up 34% at $49.37. The stock touched a 52-week high above $50 in early January.

For the quarter ended Nov. 2, the company, with brands including Journeys, Johnston & Murphy, Lids and more, earned $1.30 a share compared with 73 cents in the year-earlier quarter.

Earnings excluding special items were $1.33 versus 97 cents.

Shares outstanding, reflecting what the company called an "aggressive" buyback, fell 26% to 14.5 million.

Sales slipped 0.5% to $537.3 million from $539.8 million. Comparable-store sales rose 3%.

Analysts surveyed by FactSet were looking for adjusted earnings of $1.08 a share on sales of $540.6 million.

Chairman, President and CEO Robert Dennis said in a statement that comparable sales were driven by "continued strength at Journeys and a much-improved performance from Schuh in the U.K." Comparable sales rose 4% at Journeys and 3% at Schuh.

The one weakness in comparable sales: the Johnston & Murphy group, where they fell 6%.

Gross-profit margin widened at all the company's divisions, leading to a final figure of 49.2% versus 48.5% a year earlier.

"The fourth quarter has started well, highlighted by solid results during the Black Friday through Cyber Monday period," compared with a year earlier, Dennis said.

The company now expects fiscal 2020 earnings near the midpoint of a range of $4.10 to $4.40. The company's previous estimated range was $3.80 to $4.20. The FactSet survey was looking for $4.14.

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