Genesco Reports First Quarter Results; EPS of $0.33 on 11% Net Sales Increase and 2% Same Store Sales Increase
Genesco President and Chief Executive Officer Hal N. Pennington said, "Our ability to exceed First Call consensus earning estimates for the quarter was directly related to the diversification of our business and underscores the compelling nature of our position in the market. By offering a portfolio of unique destination retail concepts and lifestyle brands supported by strong product offerings and dedicated management, we believe we limit the impact of a shortfall in any particular segment, while at the same time continuing to deliver strong financial results. In this case, very strong results in the Jarman Group more than offset slower than planned comparable sales growth at Journeys, while Johnston & Murphy and Dockers Footwear performed up to our expectations, giving us a solid quarter overall. We view our diversification as a powerful strategic advantage, separating Genesco from its peers and providing us with a superior platform for growth.
"The Journeys division's net sales increased by 13.8% during the quarter and same store sales in dollars declined 3%, while same store unit sales increased by 2%. An extremely strong first quarter last year, when Journeys enjoyed 11% same store sales growth driven by the popularity of certain products at higher price points, and the impact of an early Easter this year made for a difficult comparison. As we move through the second quarter and into the second half of the fiscal year, we are confident that the positive effects of a number of exciting new products and brands should drive the business back to expected levels of growth, especially as comparable sales and product comparisons moderate."
Pennington continued, "The Jarman Group significantly outperformed expectations for the quarter, with robust results from both the Jarman and Underground Station stores. Net sales increased 32.4% to $33.2 million and same store sales rose 19% for the total division, with Jarman up 21% and Underground Station up 16%. Since new management took control of the Jarman Group last year, we have seen substantial improvements in same store sales and operating margin. This strong momentum continues into the second quarter. Based on the performance of Underground Station, we are now looking to increase the pace of Underground Station store openings and conversions of Jarman stores.
"Johnston & Murphy showed improvement in the quarter. Net sales were $42.4 million for the quarter and we were encouraged with a 1% same store sales gain. We continued to manage our inventory position aggressively during the quarter and we were pleased to report a 14% decline in inventories on a 2% increase in total sales for the brand. The transition from our domestic Johnston & Murphy factory to a new resource is proceeding smoothly.
"Dockers Footwear's sales increased 15% to $23.6 million compared to $20.5 million last year. These results were particularly encouraging, since they came on top of a 34% sales gain in the same period last year. Dockers' continued success is a function of providing the marketplace with updated, traditional footwear at a great value with a powerful brand name. We remain enthusiastic about our prospects for growth."
The forward-looking statements in this release involve a number of risks and uncertainties. Actual results could be materially different. The factors that could cause materially different results include lower than expected consumer demand for the Company's products, whether caused by weakness in the overall economy or changes in fashions or tastes that the Company fails to anticipate or respond appropriately to, changes in buying patterns by significant wholesale customers, disruptions in product supply or distribution, including the impact of opening a new distribution center, the inability to adjust inventory levels to sales and changes in business strategies by the Company's competitors, among other factors. Other factors that could cause results to differ from expectations include the Company's ability to open, staff and support additional retail stores on schedule and at acceptable expense levels, and the outcome of litigation and environmental matters involving the Company. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such Company statements.
The Company's live conference call on May 29, 2002, at 8:30 a.m. (Central time), may be accessed through the Company's internet website, www.genesco.com. The Company expects to discuss results from the first quarter and its current expectations for the second quarter and fiscal year ending February 1, 2003, during the call. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software. A replay will be available shortly after the call for 14 days.
Genesco, based in Nashville, sells footwear and accessories in 940 retail stores in the U.S., principally under the names Journeys, Journeys Kidz, Johnston & Murphy, Jarman and Underground Station, and on internet websites www.journeys.com and www.johnstonmurphy.com. The Company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand. Additional information on Genesco and its operating divisions may be accessed at its website www.genesco.com.
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended
May 4, May 5,
In Thousands 2002 2001*
Net sales $ 190,593 $ 171,662
Cost of sales 100,445 89,821
Selling and administrative
expenses 75,226 66,956
Earnings from operations before
interest 14,922 14,885
Interest expense, net 1,672 1,535
Pretax earnings 13,250 13,350
Income tax expense 5,048 5,012
Net Earnings $ 8,202 $ 8,338
Earnings Per Share Information
Three Months Ended
May 4, May 5,
In Thousands (except per share amounts) 2002 2001
Preferred dividend requirements $ 74 $ 74
Average common shares - Basic EPS 21,876 21,846
Basic net earnings per share $ 0.37 $ 0.38
Average common and common
equivalent shares - Diluted
EPS 27,314 27,324
Diluted net earnings per share $ 0.33 $ 0.34
* Certain amounts have been reclassified to conform to current
presentation.
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended
May 4, May 5,
In Thousands 2002 2001
Sales:
Journeys $ 91,474 $ 80,348
Jarman 33,199 25,071
Johnston & Murphy 42,365 41,567
Licensed Brands(1) 23,555 24,676
Net Sales $ 190,593 $ 171,662
Pretax Earnings (Loss):
Journeys $ 8,203 $ 10,075
Jarman 2,650 931
Johnston & Murphy 4,107 4,126
Licensed Brands(2) 2,787 2,935
Corporate and Other (2,825) (3,182)
Operating income 14,922 14,885
Interest, net 1,672 1,535
Total Pretax Earnings 13,250 13,350
Income tax expense 5,048 5,012
Net Earnings $ 8,202 $ 8,338
(1) Includes Nautica sales of $4.2 million for the first quarter of Fiscal
2002.
(2) Includes a Nautica operating loss of $0.3 million for the first
quarter of Fiscal 2002.
GENESCO INC.
Consolidated Balance Sheet
May 4, May 5,
In Thousands 2002 2001
Assets
Cash and short-term investments $ 44,266 $ 34,133
Accounts receivable 22,513 26,787
Inventories 143,448 146,960
Other current assets 20,272 26,612
Current assets of discontinued
operations* -- 187
Total current assets 230,499 234,679
Plant, equipment and capital
leases 125,419 90,028
Other non-current assets 20,559 19,987
Non-currrent assets of
discontinued operations* 499 554
Total Assets $ 376,976 $ 345,248
Liabilities and Shareholders'
Equity
Total current liabilities 78,245 78,794
Long-term debt 103,271 103,527
Other long-term liabilities 24,481 11,605
Shareholders' equity 170,979 151,322
Total Liabilities and
Shareholders' Equity $ 376,976 $ 345,248
* Current and non-current assets of discontinued operations include
Volunteer Leather.
GENESCO INC.
Retail Units Operated
Balance Balance Balance
02/03/01 Open Conv Close 02/02/02 Open Conv Close 05/04/02
Journeys
Group 425 111 (1) 2 533 32 0 1 564
Journeys 425 97 (1) 2 519 25 0 1 543
Journeys
Kidz 0 14 0 0 14 7 0 0 21
Jarman
Group 207 32 1 13 227 5 0 4 228
Jarman
Retail 150 0 (8) 12 130 0 (1) 3 126
Underground
Station 57 32 9 1 97 5 1 1 102
Johnston &
Murphy 147 10 0 9 148 0 0 0 148
Shops 115 9 0 8 116 0 0 0 116
Factory
Outlets 32 1 0 1 32 0 0 0 32
Total Retail
Units 779 153 0 24 908 37 0 5 940
Constant Store Sales
Three Months Ended
May 4, May 5,
2002 2001
Journeys -3% 11%
Jarman Group 19% -3%
Jarman Retail 21% -4%
Underground Station 16% 5%
Johnston & Murphy 1% -9%
Shops -1% -8%
Factory Outlets 8% -14%
Total Constant Store Sales 2% 4%
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SOURCE Genesco Inc.
CONTACT: financial, James S. Gulmi, +1-615-367-8325, or media, Claire S.
McCall, +1-615-367-8283, both of Genesco Inc.
/Company News On-Call: http://www.prnewswire.com/gh/cnoc/comp/352750.html
URL: http://www.journeys.com
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