Things are changing at Genesco Inc.
The company’s teen retailer Journeys, which has long been the breadwinner of the firm’s portfolio, produced the weakest performance of all of Genesco’s business segments during the holiday period.
The company announced today that Journeys’ comparable sales dipped 6 percent during the quarter-to-date period ended Jan. 5. Meanwhile, comps at Schuh Group gained 1 percent; Lids Sports Group advanced 8 percent; and the Johnston & Murphy Group dipped just 1 percent.
Genesco’s total comparable sales, including both stores and direct sales, were flat during the period. Same-store sales decreased 2 percent, and sales for the company’s e-commerce and catalog direct sales businesses increased 11 percent on a comparable basis for that period.
Despite sluggishness at Journeys, Genesco chairman, president and CEO Robert Dennis said he was pleased with the company’s overall performance during the holidays, which were expected to be challenging for the firm.
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“Sales for the quarter to date have exceeded the expectations outlined in our most recent earnings guidance,” Dennis added. “While we now anticipate that comparable sales for the quarter will be flat to [down] 1 percent, compared to the [down] 2 percent to [down] 3 percent assumption reflected in that guidance, we also expect to give up some gross margin in order to end the year in an optimal inventory position.”
The company said it now expects to meet the high end of the range of its most recently announced expectations for adjusted earnings per diluted share in the range of $3.80 to $4.
“We remain cautious about the amount of upside potential versus our earnings guidance, but we believe that adjusted earnings per share will be at least at the high end of our guidance range,” Dennis noted.
CL King & Associates analyst Steve Marotta maintained a buy rating on Genesco’s stock in following the earnings announcement and management’s commentary on guidance.
“Given the contretemps surrounding this company over the last two years or so, we view a ‘not missed’ quarter in the face of a challenging environment as a ‘win,’ ” Marotta wrote today.
As of 11:35 a.m. ET today, Genesco’s shares were up nearly 5 percent, to $59.90.
