Genesco Inc. (GCO), Tuesday reported an increase in third quarter profit, that exceeded estimates, helped by improved margins and higher sales. Absence of a sustained sales trend, however, caused comparable sales to drop 2%. Looking ahead, the apparel stores operator raised its fiscal 2010 earnings forecast from the prior level.
For the third quarter, net income of Nashville, Tennessee-based Genesco increased to $11.44 million or $0.50 per share from $8.97 million or $0.43 per share in the same quarter a year ago. Earnings from continuing operations were $11.52 million, compared to $8.99 million in the year-earlier quarter.
Third quarter earnings reflects pretax charge of $2.6 million or $0.07 per share, charges associated with merger related expenses, asset impairment and other items. Excluding items, earnings from continuing operations were $12.3 million or $0.53 per share, compared to $9.5 million or $0.43 per share in the prior-year quarter.
On average, nine-analysts polled by Thomson Reuters expected earnings of $0.44 per share for the quarter. Analysts' estimate typically excludes one-time items.
Net sales increased to $390 million from $389.77 million in the prior-year quarter, surpassing Street estimates of $388.41 million for the quarter. Comparable store sales decreased by 2%.
Comparable store sales in the Journeys Group decreased by 2%, the Hat World Group increased by 1%, Underground Station decreased by 6%, and Johnston & Murphy Retail decreased by 2%.
Earnings from operations was $19.25 million, compared to $16.27 million in the corresponding quarter last year.
For the nine-month period, net earnings from continuing operations was $3.26 million or $0.13 per share, compared to $133.04 million or $5.41 per share in the year-ago period. Net sales was $1.095 million, compared to $1.099 million in the prior-year period.
Looking ahead to fiscal 2010, Genesco said it now expects earnings in the range of $1.78 to $1.84 per share, up from the prior outlook range of $1.70 - $1.80 per share. Street currently expect earnings of $1.75 per share for the year.
Fiscal year guidance assumes fourth quarter earnings per share of $1.07 to $1.13 per share, based on flat to slightly positive fourth quarter comparable store sales compared with a negative 5% last year.
GCO is currently trading at $26.38, down $2.25 or 7.88%, on a volume of 0.34 million shares.
For comments and feedback: editorial@rttnews.com