10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended April 30, 2022

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from to

Commission File No. 1-3083

Genesco Inc.

(Exact name of registrant as specified in its charter)

 

Tennessee

 

62-0211340

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

 

535 Marriott Drive

 

37214

Nashville,

Tennessee

 

(Zip Code)

(Address of principal executive offices)

 

 

 

Registrant's telephone number, including area code: (615) 367-7000

Former address: 1415 Murfreesboro Pike, Nashville, Tennessee 37217-2895

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

GCO

New York Stock Exchange

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such report), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer; an accelerated filer; a non-accelerated filer; a smaller reporting company; or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large accelerated filer

 

 

Accelerated filer

 

 

 

 

Non-accelerated filer

 

 

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes No

As of May 27, 2022, there were 13,728,784 shares of the registrant's common stock outstanding.

 


 

INDEX

 

 

 

Part I. Financial Information

 

Item 1. Financial Statements (unaudited):

 

Condensed Consolidated Balance Sheets - April 30, 2022, January 29, 2022 and May 1, 2021

4

Condensed Consolidated Statements of Operations - Three Months ended April 30, 2022 and May 1, 2021

5

Condensed Consolidated Statements of Comprehensive Income - Three Months ended April 30, 2022 and May 1, 2021

6

Condensed Consolidated Statements of Cash Flows - Three Months ended April 30, 2022 and May 1, 2021

7

Condensed Consolidated Statements of Equity - Three Months ended April 30, 2022 and May 1, 2021

8

Notes to Condensed Consolidated Financial Statements (unaudited)

9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

15

Item 3. Quantitative and Qualitative Disclosures about Market Risk

21

Item 4. Controls and Procedures

21

Part II. Other Information

22

Item 1. Legal Proceedings

22

Item 1A. Risk Factors

22

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

22

Item 6. Exhibits

23

Signature

24

 

 

 

2


 

cautionary notice regarding forward-looking statements

Statements in this Quarterly Report on Form 10-Q include certain forward-looking statements, which include statements regarding our intent, belief or expectations and all statements other than those made solely with respect to historical fact. Actual results could differ materially from those reflected by the forward-looking statements in this Quarterly Report on Form 10-Q and a number of factors may adversely affect the forward-looking statements and our future results, liquidity, capital resources or prospects. These include, but are not limited to, risks related to public health and safety issues, including, for example, risks related to the ongoing novel coronavirus ("COVID-19") pandemic; disruptions to our business, sales, supply chain and financial results; the level of consumer spending on our merchandise and interest in our brands and in general, 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 timing and amount of any share repurchases by us; risks related to doing business internationally, including the manufacturing of a portion of our products in China; the imposition of tariffs on products imported by us or our vendors as well as the ability and costs to move production of products in response to tariffs; our ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs; a disruption in shipping or increase in cost of our imported products, and other factors affecting the cost of products; our dependence on third-party vendors and licensors for the products we sell; the effects of the withdrawal of the United Kingdom ("U.K.") from the European Union ("Brexit") and other sources of market weakness in the U.K. and the Republic of Ireland (the “ROI”); the effectiveness of our omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; labor shortages; the effects of inflation, including our ability to pass increased cost on to consumers; effects resulting from wars and other military operations; the evolving regulatory landscape related to our use of social media; the establishment and protection of our intellectual property; weakness in the consumer economy and retail industry; competition and fashion trends in our markets, including trends with respect to the popularity of casual and dress footwear; weakness in shopping mall traffic; any failure to increase sales at our existing stores, given our high fixed expense cost structure, and in our e-commerce businesses; risks related to the potential for terrorist events; changes in buying patterns by significant wholesale customers; changes in consumer preferences; our ability to continue to complete and integrate acquisitions; our ability to expand our business and diversify our product base; impairment of goodwill in connection with acquisitions; payment related risks that could increase our operating cost, expose us to fraud or theft, subject us to potential liability and disrupt our business; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor of certain leases; 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 our ability to open additional retail stores, renew leases in existing stores, control or lower occupancy costs, to conduct required remodeling or refurbishment on schedule and at expected expense levels; realize anticipated cost savings, including rent savings; realize any anticipated tax benefits, and achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of our market value relative to our 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 our shares or for the retail sector in general; costs and reputational harm as a result of disruptions in our business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems, and the cost and outcome of litigation, investigations and environmental matters that involve us. For a full discussion of risk factors, see Item 1A, "Risk Factors".

Readers are cautioned not to place undue reliance on forward-looking statements as such statements speak only as of the date they were made and involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements. The most important factors which could cause our actual results to differ from our forward-looking statements are set forth in our description of risk factors in Item 1A contained in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022, which should be read in conjunction with the forward-looking statements in this Quarterly Report on Form 10-Q. Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update any forward-looking statement.

The events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. As a result, our actual results may differ materially from the results contemplated by these forward-looking statements.

We maintain a website at www.genesco.com where investors and other interested parties may obtain, free of charge, press releases and other information as well as gain access to our periodic filings with the Securities and Exchange Commission (“SEC”). The information contained on this website should not be considered to be a part of this or any other report filed with or furnished to the SEC.

3


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

 

Genesco Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(In thousands, except share amounts)

 

Assets

 

April 30, 2022

 

 

January 29, 2022

 

 

May 1, 2021

 

Current Assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

200,623

 

 

$

320,525

 

 

$

258,044

 

Accounts receivable, net of allowances of $5,074 at April 30, 2022,

 

 

 

 

 

 

 

 

 

   $4,656 at January 29, 2022 and $4,474 at May 1, 2021

 

 

48,868

 

 

 

39,509

 

 

 

45,891

 

Inventories

 

 

401,479

 

 

 

278,200

 

 

 

301,017

 

Prepaids and other current assets

 

 

74,609

 

 

 

71,564

 

 

 

117,467

 

Total current assets

 

 

725,579

 

 

 

709,798

 

 

 

722,419

 

Property and equipment, net

 

 

219,421

 

 

 

216,308

 

 

 

208,759

 

Operating lease right of use assets

 

 

508,986

 

 

 

543,789

 

 

 

639,575

 

Goodwill

 

 

38,487

 

 

 

38,556

 

 

 

38,944

 

Other intangibles

 

 

28,298

 

 

 

29,855

 

 

 

31,112

 

Deferred income taxes

 

 

4,269

 

 

 

1,466

 

 

 

 

Other noncurrent assets

 

 

23,402

 

 

 

22,327

 

 

 

21,558

 

Total Assets

 

 

1,548,442

 

 

 

1,562,099

 

 

 

1,662,367

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

243,224

 

 

 

152,484

 

 

 

164,975

 

Current portion - operating lease liabilities

 

 

137,770

 

 

 

145,088

 

 

 

158,295

 

Other accrued liabilities

 

 

83,882

 

 

 

134,156

 

 

 

112,648

 

Total current liabilities

 

 

464,876

 

 

 

431,728

 

 

 

435,918

 

Long-term debt

 

 

14,712

 

 

 

15,679

 

 

 

44,169

 

Long-term operating lease liabilities

 

 

430,606

 

 

 

471,878

 

 

 

555,204

 

Other long-term liabilities

 

 

37,910

 

 

 

40,346

 

 

 

48,068

 

Total liabilities

 

 

948,104

 

 

 

959,631

 

 

 

1,083,359

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

Non-redeemable preferred stock

 

 

818

 

 

 

827

 

 

 

828

 

Common equity:

 

 

 

 

 

 

 

 

 

Common stock, $1 par value:

 

 

 

 

 

 

 

 

 

Authorized: 80,000,000 shares

 

 

 

 

 

 

 

 

 

 Issued common stock

 

 

14,217

 

 

 

14,256

 

 

 

15,444

 

Additional paid-in capital

 

 

294,628

 

 

 

291,444

 

 

 

284,396

 

Retained earnings

 

 

348,757

 

 

 

350,206

 

 

 

329,798

 

Accumulated other comprehensive loss

 

 

(40,225

)

 

 

(36,408

)

 

 

(33,601

)

Treasury shares, at cost (488,464 shares)

 

 

(17,857

)

 

 

(17,857

)

 

 

(17,857

)

Total equity

 

 

600,338

 

 

 

602,468

 

 

 

579,008

 

Total Liabilities and Equity

 

$

1,548,442

 

 

$

1,562,099

 

 

$

1,662,367

 

 

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

4


 

Genesco Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

 

 

 

 

Three Months Ended

 

 

 

 

April 30, 2022

 

 

May 1, 2021

 

 

Net sales

 

$

520,748

 

 

$

538,695

 

 

Cost of sales

 

 

269,304

 

 

 

281,033

 

 

Gross margin

 

 

251,444

 

 

 

257,662

 

 

Selling and administrative expenses

 

 

243,481

 

 

 

239,465

 

 

Asset impairments and other, net

 

 

(283

)

 

 

2,670

 

 

Operating income

 

 

8,246

 

 

 

15,527

 

 

Other components of net periodic benefit cost (income)

 

 

98

 

 

 

(39

)

 

Interest expense (net of interest income of $0.1 million for each of the three months ended April 30, 2022 and May 1, 2021)

 

 

297

 

 

 

729

 

 

Earnings from continuing operations before income taxes

 

 

7,851

 

 

 

14,837

 

 

Income tax expense

 

 

2,882

 

 

 

5,943

 

 

Earnings from continuing operations

 

 

4,969

 

 

 

8,894

 

 

Loss from discontinued operations, net of tax

 

 

(22

)

 

 

(16

)

 

Net Earnings

 

$

4,947

 

 

$

8,878

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

Continuing operations

 

$

0.38

 

 

$

0.62

 

 

Discontinued operations

 

 

0.00

 

 

 

0.00

 

 

Net earnings

 

$

0.38

 

 

$

0.62

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

Continuing operations

 

$

0.37

 

 

$

0.60

 

 

Discontinued operations

 

 

0.00

 

 

 

0.00

 

 

Net earnings

 

$

0.37

 

 

$

0.60

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

 

 

12,961

 

 

 

14,287

 

 

Diluted

 

 

13,369

 

 

 

14,702

 

 

 

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

5


 

Genesco Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(In thousands)

 

 

 

 

Three Months Ended

 

 

 

 

April 30, 2022

 

 

May 1, 2021

 

 

Net earnings

 

$

4,947

 

 

$

8,878

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Postretirement liability adjustments, net of tax

 

 

50

 

 

 

(44

)

 

Foreign currency translation adjustments

 

 

(3,867

)

 

 

1,502

 

 

Total other comprehensive income (loss)

 

 

(3,817

)

 

 

1,458

 

 

Comprehensive Income

 

$

1,130

 

 

$

10,336

 

 

 

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

6


 

 

Genesco Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(In thousands)

 

 

 

Three Months Ended

 

 

 

April 30, 2022

 

 

May 1, 2021

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net earnings

 

$

4,947

 

 

$

8,878

 

Adjustments to reconcile net earnings to net cash provided by (used in)

 

 

 

 

 

 

operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

10,551

 

 

 

10,889

 

Deferred income taxes

 

 

(2,820

)

 

 

(10,054

)

Impairment of long-lived assets

 

 

413

 

 

 

414

 

Share-based compensation expense

 

 

3,239

 

 

 

1,912

 

Other

 

 

499

 

 

 

149

 

Changes in working capital and other assets and liabilities, net of
   acquisitions/dispositions:

 

 

 

 

 

 

Accounts receivable

 

 

(9,977

)

 

 

(14,186

)

Inventories

 

 

(126,674

)

 

 

(9,031

)

Prepaids and other current assets

 

 

(3,490

)

 

 

12,719

 

Accounts payable

 

 

92,061

 

 

 

14,784

 

Other accrued liabilities

 

 

(44,194

)

 

 

33,832

 

Other assets and liabilities

 

 

(16,622

)

 

 

(6,120

)

Net cash provided by (used in) operating activities

 

 

(92,067

)

 

 

44,186

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Capital expenditures

 

 

(15,397

)

 

 

(12,102

)

Net cash used in investing activities

 

 

(15,397

)

 

 

(12,102

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Borrowings under revolving credit facility

 

 

2,609

 

 

 

15,736

 

Payments on revolving credit facility

 

 

(2,609

)

 

 

(4,678

)

Shares repurchased related to share repurchase plan

 

 

(11,280

)

 

 

 

Change in overdraft balances

 

 

 

 

 

(533

)

Other

 

 

(2

)

 

 

(35

)

Net cash provided by (used in) financing activities

 

 

(11,282

)

 

 

10,490

 

Effect of foreign exchange rate fluctuations on cash

 

 

(1,156

)

 

 

379

 

Net increase (decrease) in cash and cash equivalents

 

 

(119,902

)

 

 

42,953

 

Cash and cash equivalents at beginning of period

 

 

320,525

 

 

 

215,091

 

Cash and cash equivalents at end of period

 

$

200,623

 

 

$

258,044

 

Supplemental information:

 

 

 

 

 

 

Interest paid

 

$

327

 

 

$

538

 

Income taxes paid

 

 

225

 

 

 

127

 

Cash paid for amounts included in measurement of operating lease liabilities

 

 

57,278

 

 

 

45,532

 

Operating lease assets obtained in exchange for new operating lease liabilities

 

 

13,935

 

 

 

54,247

 

 

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

7


 

Genesco Inc. and Subsidiaries

Condensed Consolidated Statements of Equity

(In thousands)

 

 

Non-
Redeemable
Preferred
Stock

 

Common
Stock

 

Additional
Paid-In
Capital

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
Loss

 

Treasury
Shares

 

Total
Equity

 

Balance January 30, 2021

$

1,009

 

$

15,438

 

$

282,308

 

$

320,920

 

$

(35,059

)

$

(17,857

)

$

566,759

 

Net earnings

 

 

 

 

 

 

 

8,878

 

 

 

 

 

 

8,878

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

1,458

 

 

 

 

1,458

 

Share-based compensation expense

 

 

 

 

 

1,912

 

 

 

 

 

 

 

 

1,912

 

Other

 

(181

)

 

6

 

 

176

 

 

 

 

 

 

 

 

1

 

Balance May 1, 2021

$

828

 

$

15,444

 

$

284,396

 

$

329,798

 

$

(33,601

)

$

(17,857

)

$

579,008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-
Redeemable
Preferred
Stock

 

Common
Stock

 

Additional
Paid-In
Capital

 

Retained
Earnings

 

Accumulated
Other
Comprehensive
Loss

 

Treasury
Shares

 

Total
Equity

 

Balance January 29, 2022

$

827

 

$

14,256

 

$

291,444

 

$

350,206

 

$

(36,408

)

$

(17,857

)

$

602,468

 

Net earnings

 

 

 

 

 

 

 

4,947

 

 

 

 

 

 

4,947

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

(3,817

)

 

 

 

(3,817

)

Share-based compensation expense

 

 

 

 

 

3,239

 

 

 

 

 

 

 

 

3,239

 

Restricted stock issuance

 

 

 

78

 

 

(78

)

 

 

 

 

 

 

 

 

Shares repurchased

 

 

 

(104

)

 

 

 

(6,396

)

 

 

 

 

 

(6,500

)

Other

 

(9

)

 

(13

)

 

23

 

 

 

 

 

 

 

 

1

 

Balance April 30, 2022

$

818

 

$

14,217

 

$

294,628

 

$

348,757

 

$

(40,225

)

$

(17,857

)

$

600,338

 

 

 

 

 

 

 

 

 

 

The accompanying Notes are an integral part of these Condensed Consolidated Financial Statements.

8


Genesco Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

 

 

Note 1

Summary of Significant Accounting Policies

Basis of Presentation

The Condensed Consolidated Financial Statements and Notes contained in this report are unaudited but reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the results for the interim periods of the fiscal year ending January 28, 2023 ("Fiscal 2023") and of the fiscal year ended January 29, 2022 ("Fiscal 2022"). All subsidiaries are consolidated in the Condensed Consolidated Financial Statements. All significant intercompany transactions and accounts have been eliminated. The results of operations for any interim period are not necessarily indicative of results for the full year. The Condensed Consolidated Financial Statements and the related Notes have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and footnotes required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. The Condensed Consolidated Balance Sheet as of January 29, 2022 has been derived from the audited financial statements at that date. These Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and Notes for Fiscal 2022, which are contained in our Annual Report on Form 10-K as filed with the SEC on March 23, 2022.

Nature of Operations

Genesco Inc. and its subsidiaries (collectively the "Company", "Genesco," "we", "our", or "us") business includes the sourcing and design, marketing and distribution of footwear and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys®, Journeys Kidz®, Little Burgundy® and Johnston & Murphy® banners and under the Schuh® banner in the United Kingdom (“U.K.”) and the Republic of Ireland (“ROI”); through catalogs and e-commerce websites including the following: journeys.com, journeyskidz.com, journeys.ca, littleburgundyshoes.com, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, johnstonmurphy.ca, nashvillewarehouse.com and dockersshoes.com and at wholesale, primarily under our Johnston & Murphy brand, the licensed Levi's® brand, the licensed Dockers® brand, the licensed G.H. Bass® brand and other brands that we license for footwear. At April 30, 2022, we operated 1,414 retail stores in the U.S., Puerto Rico, Canada, the U.K. and the ROI.

During the three months ended April 30, 2022 and May 1, 2021, we operated four reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz and Little Burgundy retail footwear chains and e-commerce operations; (ii) Schuh Group, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, e-commerce operations and wholesale distribution of products under the Johnston & Murphy brand; and (iv) Licensed Brands, comprised of the licensed Dockers, Levi's, and G.H. Bass brands, as well as other brands we license for footwear.

Cash and Cash Equivalents

There were cash equivalents of $95.0 million as of April 30, 2022. There were no cash equivalents as of January 29, 2022 or May 1, 2021. Our $95.0 million of cash equivalents at April 30, 2022 were invested in institutional money market funds which invest exclusively in highly rated, short-term securities that are issued, guaranteed or collateralized by the U.S. government or by U.S. government agencies and instrumentalities. Due to their short-term nature, the carrying amounts reported in the Condensed Consolidated Balance Sheets approximate the fair value of cash and cash equivalents.

Selling and Administrative Expenses

Wholesale costs of distribution are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations in the amount of $2.7 million and $3.6 million for the first quarters of Fiscal 2023 and Fiscal 2022, respectively.

Retail occupancy costs recorded in selling and administrative expense were $78.5 million and $70.8 million for the first quarters of Fiscal 2023 and Fiscal 2022, respectively.

 

Advertising Costs

Advertising costs were $22.1 million and $21.1 million for the first quarters of Fiscal 2023 and Fiscal 2022, respectively.

9


Genesco Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

 

 

Note 1

Summary of Significant Accounting Policies, Continued

Vendor Allowances

Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were $3.2 million and $3.0 million for the first quarters of Fiscal 2023 and Fiscal 2022, respectively. During the first three months of each of Fiscal 2023 and Fiscal 2022, our cooperative advertising reimbursements received were not in excess of the costs incurred.

 

COVID-19 Pandemic

The COVID-19 pandemic has created significant public health concerns as well as economic disruption, uncertainty, and volatility which may negatively affect our business operations. As a result, if the pandemic persists or worsens, our accounting estimates and assumptions could be impacted in subsequent interim reports and upon final determination at year-end, and it is reasonably possible such changes could be significant.

New Accounting Pronouncements

We do not currently have any new accounting pronouncements pending adoption.

Note 2

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill by segment were as follows:

 

(In thousands)

 

Journeys
Group

 

 

Licensed
Brands
Group

 

 

Total
Goodwill

 

Balance, January 29, 2022

 

$

10,087

 

 

$

28,469

 

 

$

38,556

 

Effect of foreign currency exchange rates

 

 

(65

)

 

 

(4

)

 

 

(69

)

Balance, April 30, 2022

 

$

10,022

 

 

$

28,465

 

 

$

38,487

 

 

Other intangibles by major classes were as follows:

 

 

 

Trademarks

 

Customer Lists

 

 

Other

 

 

Total

 

(In thousands)

 

Apr. 30, 2022

 

 

Jan. 29,
2022

 

Apr. 30, 2022

 

 

Jan. 29,
2022

 

 

Apr. 30, 2022

 

 

Jan. 29,
2022

 

 

Apr. 30, 2022

 

 

Jan. 29,
2022

 

Gross other intangibles

 

$

24,521

 

 

$

25,935

 

$

6,498

 

 

$

6,586

 

 

$

400

 

 

$

400

 

 

$

31,419

 

 

$

32,921

 

Accumulated amortization

 

 

 

 

 

 

 

(2,721

)

 

 

(2,666

)

 

 

(400

)

 

 

(400

)

 

 

(3,121

)

 

 

(3,066

)

Net Other Intangibles

 

$

24,521

 

 

$

25,935

 

$

3,777

 

 

$

3,920

 

 

$

 

 

$

 

 

$

28,298

 

 

$

29,855

 

 

Note 3

Asset Impairments and Other Charges

We recorded a pretax gain of $0.3 million in the first quarter of Fiscal 2023, including a gain of $0.7 million for the pension plan termination, partially offset by $0.4 million for retail store asset impairments.

We recorded pretax charges of $2.7 million in the first quarter of Fiscal 2022, including $2.3 million for professional fees related to actions of an activist shareholder and $0.4 for retail store asset impairments.

10


Genesco Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

 

 

Note 4

Inventories and Other Current Accrued Liabilities

 

Inventory

 

(In thousands)

 

April 30, 2022

 

 

January 29, 2022

 

Wholesale finished goods

 

$

40,078

 

 

$

28,432

 

Retail merchandise

 

 

361,401

 

 

 

249,768

 

Total Inventories

 

$

401,479

 

 

$

278,200

 

 

Other Current Accrued Liabilities

 

(In thousands)

April 30, 2022

 

January 29, 2022

 

Accrued employee compensation