Genesco Reports First Quarter Fiscal 2010 Results
Adjusted for the listed items in both periods, earnings from continuing
operations were
Net sales for the first quarter of Fiscal 2010 increased 4% to
"As we reported on our last release, sales in February were strong, and as
expected, March comps were weaker due to the Easter offset. We experienced a
sales rebound in the first half of April, then business slowed again and
comparable store sales through
"We continue to focus aggressively on inventory management, as year-over
year inventories were up 5% and inventories per square foot increased only 2%
for the quarter. In addition, our financial position remains solid as we
recently converted
Outlook
Dennis also discussed the Company's outlook for Fiscal 2010. "Based on
our strong first quarter results, we are now slightly more comfortable with
our previously announced baseline earnings scenario of
Dennis concluded, "While we are cognizant of the recent lack of a strong sales trend and we are carefully monitoring our business, there are a number of things happening in the marketplace that are encouraging to us in the longer term. Industry rationalization, real-estate flexibility on rents, lower remodeling requirements and increased accessibility to attractive malls at compelling terms all represent meaningful benefits to us and we are fully committed to capitalizing on all the opportunities that lie ahead."
Cautionary Note Concerning Forward-Looking Statements
This release contains forward-looking statements, including those
regarding the performance outlook for the Company and its individual
businesses, and all other statements not addressing solely historical facts or
present conditions. Actual results could vary materially from the
expectations reflected in these statements. A number of factors could cause
differences. These include adjustments to estimates reflected in
forward-looking statements, continuing weakness in the consumer economy,
inability of customers to obtain credit, fashion trends that affect the sales
or product margins of the Company's retail product offerings, changes in
buying patterns by significant wholesale customers, bankruptcies or
deterioration in financial condition of significant wholesale customers,
disruptions in product supply or distribution, unfavorable trends in fuel
costs, foreign exchange rates, foreign labor and materials costs, and other
factors affecting the cost of products, competition in the Company's markets
and changes in the timing of holidays or in the onset of seasonal weather
affecting periodtoperiod sales comparisons. Additional factors that could
affect the Company's prospects and cause differences from expectations include
the ability to build, open, staff and support additional retail stores and to
renew leases in existing stores and to conduct required remodeling or
refurbishment on schedule and at expected expense levels, 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 or intangible
assets or other adverse financial consequences, unexpected changes to the
market for our shares, variations from expected pension-related charges caused
by conditions in the financial markets, and the outcome of litigation,
investigations and environmental matters 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 our SEC filings, copies of which may be
obtained from the SEC website, www.sec.gov, or by contacting the investor
relations department of
Conference Call
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GENESCO INC.
Consolidated Earnings Summary
=============================
Three Months Ended
------------------
Restated
May 2, May 3,
In Thousands 2009 2008
------------ ---- ----
Net sales $370,366 $356,935
Cost of sales 181,144 175,540
Selling and administrative
expenses 181,369 180,046
Restructuring and other, net 4,973 (201,838)
----------------- ----- --------
Earnings from operations 2,880 203,187
Loss on early retirement of debt 5,119 -
Interest expense, net 3,083 2,945
--------------------- ----- -----
(Loss) earnings before income
taxes from continuing
operations (5,322) 200,242
Income tax expense 281 70,802
------------------ --- ------
(Loss) earnings from continuing
operations (5,603) 129,440
Provision for discontinued
operations, net (159) (93)
---------------- ---- ---
Net (Loss) Earnings $(5,762) $129,347
=================== ======= ========
Earnings Per Share Information
==============================
Three Months Ended
------------------
Restated
May 2, May 3,
In Thousands (except
per share amounts) 2009 2008
-------------------- ---- ----
Preferred dividend requirements $50 $49
Average common shares - Basic EPS 18,852 21,050
Basic earnings (loss) per share:
Before discontinued
operations $(0.30) $6.15
Net (loss) earnings $(0.31) $6.14
Average common and common
equivalent shares -
Diluted EPS 18,852 25,371
Diluted earnings (loss) per share:
Before discontinued
operations $(0.30) $5.14
Net (loss) earnings $(0.31) $5.14
GENESCO INC.
Consolidated Earnings Summary
=============================
Three Months Ended
------------------
Restated
May 2, May 3,
In Thousands 2009 2008
------------ ---- ----
Sales:
Journeys Group $176,847 $168,762
Underground Station Group 26,728 29,004
Hat World Group 98,804 87,737
Johnston & Murphy Group 39,330 46,571
Licensed Brands 28,551 24,748
Corporate and Other 106 113
----------------- --- ---
Net Sales $370,366 $356,935
============= ======== ========
Operating Income (Loss):
Journeys Group $5,513 $5,298
Underground Station Group (450) (981)
Hat World Group 6,524 3,725
Johnston & Murphy Group 157 3,683
Licensed Brands 3,617 3,555
Corporate and Other* (12,481) 187,907
----------------- ------- -------
Earnings from operations 2,880 203,187
Loss on early retirement of
debt 5,119 -
Interest, net 3,083 2,945
---------------- ----- -----
(Loss) earnings before income
taxes from continuing
operations (5,322) 200,242
Income tax expense 281 70,802
------------------ --- ------
(Loss) earnings from continuing
operations (5,603) 129,440
Provision for discontinued
operations, net (159) (93)
---------------- ---- ---
Net (Loss) Earnings $(5,762) $129,347
=================== ======= ========
*Includes a $5.0 million charge in the first quarter of Fiscal 2010
which includes $4.5 million in asset impairments, $0.4 million for
other legal matters and $0.1 million for lease terminations.
Includes $201.8 million credit in the first quarter of Fiscal 2009 of
which $204.1 million were proceeds as a result of the settlement of
merger-related litigation with The Finish Line and its investment bankers
offset by $1.2 million in asset impairments, $0.8 million for other legal
matters and $0.3 million for lease terminations. The first quarter of
Fiscal 2009 also included $7.2 million of merger-related expenses.
GENESCO INC.
Consolidated Balance Sheet
==========================
Restated
May 2, May 3,
In Thousands 2009 2008
------------ ---- ----
Assets
Cash and cash equivalents $16,690 $16,480
Restricted
investment in Finish
Line Stock - 29,075
Accounts receivable 28,417 26,532
Inventories 298,733 284,873
Other current assets 54,711 43,202
-------------------- ------ ------
Total current assets 398,551 400,162
-------------------- ------- -------
Property and equipment 233,751 250,756
Other non-current assets 182,811 169,963
------------------ ------- -------
Total Assets $815,113 $820,881
============ ======== ========
Liabilities and Shareholders'
Equity
Accounts payable $80,604 $71,684
Other current liabilities 63,020 152,898
------------- ------ -------
Total current liabilities 143,624 224,582
------------- ------- -------
Long-term debt 51,648 79,037
Other long-term liabilities 110,244 79,808
Shareholders' equity 509,597 437,454
-------------------- ------- -------
Total Liabilities and
Shareholders' Equity $815,113 $820,881
================== ======== ========
GENESCO INC.
Retail Units Operated - Three Months Ended May 2, 2009
======================================================
Balance Balance Balance
02/02/08 Open Close 01/31/09 Open Close 05/02/09
Journeys Group 967 50 5 1,012 8 2 1,018
Journeys 805 16 5 816 4 2 818
Journeys Kidz 115 26 - 141 4 - 145
Shi by Journeys 47 8 - 55 - - 55
Underground Station
Group 192 - 12 180 - 3 177
Hat World Group 862 43 20 885 5 10 880
Johnston & Murphy
Group 154 9 6 157 4 - 161
Shops 113 6 5 114 3 - 117
Factory Outlets 41 3 1 43 1 - 44
Total Retail
Units 2,175 102 43 2,234 17 15 2,236
Constant Store Sales
====================
Three Months Ended
------------------
May 2, May 3,
2009 2008
---- ----
Journeys Group 3% 0%
Underground Station Group -5% 9%
Hat World Group 7% 4%
Johnston & Murphy Group -18% -2%
----------------------- --- --
Total Constant Store Sales 2% 2%
========================== = =
Genesco Inc.
Schedule B
Adjustments to Reported (Loss) Earnings from Continuing Operations
Three Months Ended May 2, 2009 and May 3, 2008
3 mos Impact 3 mos Impact
In Thousands (except May 2009 on EPS May 2008 on EPS
per share amounts) ---------- -------- ---------- --------
(Loss) earnings from
continuing operations,
as reported (5,603) $(0.30) 129,440 $5.14
Adjustments: (1)
Settlement of merger-
related litigation - - (122,649) (4.84)
Merger-related expenses - - 4,351 0.17
Impairment & lease
termination charges 2,769 0.12 901 0.04
Other legal matters 238 0.01 451 0.02
Loss on early retirement
of debt 3,061 0.13 - -
Convertible debt interest
restatement (APB 14-1) 491 0.02 452 -
Higher (lower)
effective tax rate 2,533 0.11 (9,179) (0.36)
Effect of change in share
count from going to a
profit from a loss - 0.08 - -
------ ----- ------ -----
Adjusted earnings
from continuing
operations (2) $3,489 $0.17 $3,767 $0.17
------ ----- ------ -----
(1) All adjustments are net of tax. The tax rate for the first quarter
Of Fiscal 2010 is 40.2% excluding FIN 48 discrete interest.
The tax rate for the first quarter of Fiscal 2009 before the impact
of the settlement of merger-related litigation and deductibility of
prior year merger-related expenses is 39.9% excluding FIN 48
discrete interest.
(2) Reflects 23.3 million share count for Fiscal 2010 and 25.3 million
share count for Fiscal 2009 which includes convertible shares and
common stock equivalents.
The Company believes that disclosure of earnings and earnings per
share from continuing operations on a pro forma basis adjusted for the
items not reflected in the previously announced expectations will be
meaningful to investors, in light of the impact of changes in
effective tax rates and other items not reflected in those
expectations.
Genesco Inc.
Schedule B
Adjustments to Forecasted Earnings from Continuing Operations
Fiscal Year Ending January 30, 2010
Baseline Scenario High Guidance Low Guidance
In Thousands (except per Fiscal 2010 Fiscal 2010
share amounts)
Forecasted earnings from
continuing operations $26,264 $1.21 $22,519 $1.11
Adjustments: (1)
Convertible debt interest
restatement (APB 14-1) 1,022 - 1,022 -
Impairment, other legal
matters and lease
termination charges 8,151 0.35 8,151 0.35
Loss on early retirement
of debt 3,061 0.13 3,061 0.13
Higher effective tax rate 2,533 0.11 2,533 0.11
Adjusted forecasted
Earnings from
continuing operations(2) $41,031 $1.80 $37,286 $1.70
(1) All adjustments are net of tax. The forecasted tax rate for
Fiscal 2010 for the baseline scenario is 40.8%.
(2) Reflects 23.5 million share count for Fiscal 2010 which includes
convertible shares and 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.
SOURCEGenesco, Inc. -0-05/28/2009 /CONTACT: Financial Contact: James S. Gulmi, +1-615-367-8325, or Media Contact:Claire S. McCall , +1-615-367-8283, both ofGenesco Inc. / /Web Site: http://www.genesco.com / (GCO) CO:Genesco, Inc. ST:Tennessee IN: REA FAS SU: ERN ERP CCA PR -- CL23216 -- 911605/28/2009 07:32 EDT http://www.prnewswire.com