Specialty retailer Genesco, Inc. (GCO: Quote) reported Friday a profit for the first quarter that declined from last year, reflecting an assent impairment charge and lower comparable-store sales, particularly at Lids Sports Group and Schuh segments.
Adjusted earnings for the quarter topped analysts' expectations, while quarterly revenues missed their estimates. The company also maintained its earnings guidance for the full-year 2014, citing first quarter performance and current trends in the marketplace.
"After a slow start in February, which we attribute primarily to delayed processing of federal income tax refunds, comparable sales improved for the balance of the quarter, despite continued headwinds from unseasonably cold weather," Chairman, President and CEO Robert Dennis said.
Dennis added that, "Strong gains in our direct channel helped partially offset soft retail traffic, which combined with well-controlled expenses allowed us to deliver earnings that were slightly ahead of expectations."
The Nashville, Tennessee-based retailer of branded footwear, licensed and branded headwear as well as licensed sports apparel and accessories posted net earnings of $18.38 million or $0.77 per share for the first quarter, down from $20.61 million or $0.85 per share in the prior-year quarter.
Net earnings from continuing operations for the quarter declined to $18.48 million or $0.78 per share from $20.79 million or $0.86 per share in the year-ago quarter.
Excluding items, adjusted earnings from continuing operations for the quarter was $22.2 million or $0.94 per share, compared to $23.8 million or $0.98 per share in the year-ago quarter. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.87 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales for the quarter declined 1.5 percent to $591.39 million from $600.14 million in the same quarter last year, and missed eight Wall Street analysts' consensus estimate of $605.71 million.
Genesco, which owns Journeys and Johnston & Murphy shoe stores, said total comparable store sales decreased 4 percent for the quarter over an 8 percent growth reported last year. These include same store sales and comparable e-commerce and catalog sales.
Comparable store sales for Lids Sports Group's declined 6 percent, and Journeys Group decreased 2 percent, while Johnston & Murphy group grew 7 percent. Comparable store sales for Schuh Group decreased 11 percent.
Looking ahead to fiscal 2014, the company continues to expect adjusted earnings in a range of $5.57 to $5.67 per share on projected comparable store sales growth in the low single digit range. Street is currently looking for full-year 2013 earnings of $5.58 per share.
The company also said it remains on track to achieve its 5-year target of $3.5 billion in sales and an operating margin of 9.5 percent by fiscal 2017.
"We believe the investments we are making in our businesses, including improved e-commerce infrastructure and selective store openings, are delivering solid returns and positioning the Company for sustainable sales and earnings growth in the years ahead," Dennis added.
GCO closed Thursday's regular trading session at $69.07, up $1.16 on a volume of 0.14 million shares. In the past 52-week period, the stock has been trading in a range of $50.33 to $74.93.
by RTT Staff Writer
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