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GENESCO INC. REPORTS FISCAL 2023 FOURTH QUARTER AND FULL YEAR RESULTS

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Genesco Inc. (NYSE: GCO) reported its fourth quarter and fiscal year results for January 28, 2023, noting a 5% increase in comparable sales and a 15% rise in e-commerce sales. Net sales were $725 million, flat year-over-year, while full-year sales decreased 2% to $2.4 billion. GAAP EPS from continuing operations was $3.23 for Q4, down from $4.41 last year. Fiscal 2024 guidance suggests adjusted EPS between $5.10 and $5.90, reflecting macroeconomic uncertainties. The company plans to reshape its cost structure to adapt to changing consumer behavior and expects a cautious outlook for the upcoming fiscal year.

Positive
  • Fourth quarter comparable sales rose 5%.
  • E-commerce sales increased 15% year-over-year.
  • Record sales achieved by Johnston & Murphy and Schuh.
  • Cash balances enabled $73 million in share repurchases.
Negative
  • Net sales decreased 2% for the full year compared to FY22.
  • GAAP EPS decreased from $7.92 to $5.69 year-over-year.
  • Gross margin decreased by 120 basis points for FY23.
  • Increased inventories by 65% year-over-year.

--Fourth Quarter Comps Increased 5%--
-- Fourth Quarter E-Commerce Sales Increased 15%--
--Johnston & Murphy and Schuh Achieve Record Sales in FY23—

NASHVILLE, Tenn., March 9, 2023 /PRNewswire/ -- Genesco Inc. (NYSE: GCO) today reported fourth quarter and full fiscal year results for the three and twelve months ended January 28, 2023.

Fourth Quarter Fiscal 2023 Financial Summary

  • Net sales of $725 million were essentially flat with last year and increased 7% over Q4FY20
  • Excluding the impact of lower exchange rates, net sales increased 2% for Q4FY23 compared to Q4FY22
  • Comps up 5%, with stores up 1% and direct up 21%
  • E-commerce sales up 15% compared to Q4FY22 and up 57% compared to Q4FY20
  • E-commerce sales represented 25% of retail sales compared to 22% last year and increased from 17% of retail sales in Q4FY20
  • GAAP EPS from continuing operations was $3.23 vs. $4.41 last year and $2.49 in Q4FY20
  • Non-GAAP EPS from continuing operations was $3.061 vs. $3.48 last year and $3.09 in Q4FY20

Fiscal 2023 Financial Summary

  • Net sales of $2.4 billion decreased 2% compared to last year but increased 9% over FY20
  • Excluding the impact of lower exchange rates, net sales increased 1% for FY23 compared to FY22
  • E-commerce sales down 5% compared to FY22 but up 67% compared to FY20
  • E-commerce sales represented 20% of retail sales, down from 21% compared to last year but an increase from 13% of retail sales in FY20
  • GAAP EPS from continuing operations was $5.69 vs. $7.92 last year and $3.94 in FY20
  • Non-GAAP EPS from continuing operations was $5.591 vs. $7.62 last year and $4.58 in FY20
  • Repurchased $72.7 million of stock during FY23, with $34.1 million remaining on the current authorization

__________________________

1Excludes a charge for asset impairments and expenses related to the Company's new headquarters building, net of tax effect in the fourth quarter and year of Fiscal 2023, and, additionally, a gain on the termination of the pension plan, net of tax effect for the year of Fiscal 2023 ("Excluded Items"). A reconciliation of earnings and earnings per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") with the adjusted earnings and earnings per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of earnings and earnings per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

Mimi E. Vaughn, Genesco board chair, president and chief executive officer, said, "Many areas of our business outperformed in Fiscal 2023 even as new headwinds emerged and the consumer demand environment rapidly changed. Record top-line results at Schuh and Johnston & Murphy helped mitigate some of the pressures that weighed on Journeys following its record sales and operating profit in Fiscal 2022. Our overall performance, which included total quarterly comparable sales improving sequentially through the year, demonstrates the resiliency of our footwear focused strategy and the benefits of our multi-division, multi-channel operating model.

For Fiscal 2024, we have a number of initiatives planned to drive growth as well as more immediate actions to reshape our cost structure to better align with consumer behavior.  Given the macroeconomic uncertainty, we believe it is prudent to adopt a cautious view for the current year. That said, we believe that the strong, strategic positioning of our businesses and our experienced teams' proven ability to successfully execute in both favorable and challenging markets, has the Company on course for delivering increased profitability and greater shareholder value over the longer term."  

Thomas A. George, Genesco chief financial officer, commented, "I am encouraged by the top-line momentum we gained through Fiscal 2023 even as headwinds strengthened, culminating in a 5% increase in fourth quarter total comparable sales. Fiscal 2024 has started slowly as we lap a strong prior year period that was marked by higher levels of consumer discretionary spending, and higher retailer order books.  With some additional pressure expected on sales this year, especially in the first half, we are balancing our focus on investing for the future and driving down costs as we expect some of the recent cost pressures to persist in the near-term. We believe we are taking the necessary steps to best serve our customers and our shareholders in this turbulent market.  Therefore, we are forecasting adjusted earnings per share for Fiscal 2024 to range between $5.10 and $5.90 with our best current expectation near the midpoint of that range and with a greater percentage of this year's earnings coming in the second half as compared with Fiscal 2023.

Fourth Quarter Review

Net sales for the fourth quarter of Fiscal 2023 of $725 million were essentially flat compared to $728 million in the fourth quarter of Fiscal 2022 and increased 7% from $678 million in the fourth quarter of Fiscal 2020, prior to the pandemic. The sales decrease compared to last year was driven by foreign exchange pressure in the Schuh business resulting from the strengthening dollar and decreased wholesale sales, partially offset by a 15% increase in e-commerce sales and a total comparable sales increase of 5%. E-commerce sales increased 57% above pre-pandemic levels. Excluding the impact of lower exchange rates, net sales increased 2% for the fourth quarter of Fiscal 2023 compared to the fourth quarter of Fiscal 2022 despite having 15 fewer stores.

Comparable Sales




Comparable Same Store and Direct Sales:

4QFY23

4QFY22

Journeys Group

(1) %

1 %

Schuh Group

20 %

(2) %

Johnston & Murphy Group

23 %

38 %

Total Genesco Comparable Sales

5 %

3 %

Same Store Sales

1 %

10 %

Comparable Direct Sales

21 %

(12) %

Overall sales for the fourth quarter of Fiscal 2023 compared to the fourth quarter of Fiscal 2022 increased 7% at Schuh and 17% at Johnston & Murphy, partially offset by a decrease of 2% at Journeys and a decrease of 34%, or $16 million at Genesco Brands Group.  On a constant currency basis, Schuh sales were up 18% for the fourth quarter this year.

Fourth quarter gross margin this year was 46.4%, down 250 basis points compared with 48.9% last year and down 50 basis points compared with Fiscal 2020 at 46.9%.  The decrease as a percentage of sales compared to Fiscal 2022 is due primarily to a more normalized promotional environment compared to essentially none last year, in addition to increased freight and warehouse costs this year.

Selling and administrative expense for the fourth quarter this year decreased 50 basis points as a percentage of sales compared with last year and increased 90 basis points compared with the fourth quarter of Fiscal 2020.  Adjusted selling and administrative expense for the fourth quarter this year decreased 40 basis points as a percentage of sales compared with last year and increased 130 basis points compared with the fourth quarter of Fiscal 2020.  The fourth quarter of Fiscal 2022 included one-time benefits for rent credits and government relief of approximately 70 basis points.  Excluding these one-time benefits last year, leverage in performance-based compensation and occupancy expenses more than offset the deleverage from compensation and marketing expenses.

Genesco's GAAP operating income for the fourth quarter was $49.8 million, or 6.9% of sales this year, compared with $83.4 million, or 11.5% of sales in the fourth quarter last year and $45.3 million, or 6.7% of sales in the fourth quarter of Fiscal 2020.  Adjusted for the Excluded Items in all periods, operating income for the fourth quarter was $51.0 million this year compared to $66.4 million last year and $59.3 million in the fourth quarter of Fiscal 2020. Adjusted operating margin was 7.0% of sales in the fourth quarter of Fiscal 2023, 9.1% in the fourth quarter last year and 8.8% in the fourth quarter of Fiscal 2020. 

The effective tax rate for the quarter was 19.1% in Fiscal 2023 compared to 24.9% in the fourth quarter last year and 21.0% in the fourth quarter of Fiscal 2020.  The adjusted tax rate, reflecting Excluded Items, was 25.2% in Fiscal 2023 compared to 25.3% in the fourth quarter last year and 25.3% in the fourth quarter of Fiscal 2020. 

GAAP earnings from continuing operations were $39.2 million in the fourth quarter of Fiscal 2023, compared to $62.2 million in the fourth quarter last year and $35.5 million in the fourth quarter of Fiscal 2020.  Adjusted for the Excluded Items in all periods, fourth quarter earnings from continuing operations were $37.1 million, or $3.06 per share, in Fiscal 2023, compared to $49.1 million, or $3.48 per share, in the fourth quarter last year and $44.1 million, or $3.09 per share, in the fourth quarter of Fiscal 2020.

Full Year Review

Net sales for Fiscal 2023 decreased 2% to $2.38 billion from $2.42 billion in Fiscal 2022 but increased 9% from $2.20 billion in Fiscal 2020, prior to the pandemic. The sales decrease compared to last year was mainly driven by foreign exchange pressure in the Schuh business resulting from the strengthening dollar and a decrease in e-commerce sales, partially offset by increased store and wholesale sales. E-commerce sales decreased 5% in Fiscal 2023 compared to Fiscal 2022, but increased 67% above Fiscal 2020 pre-pandemic levels. Comparable direct sales were flat in Fiscal 2023 compared to a 2% decrease in Fiscal 2022. Excluding the impact of lower exchange rates, net sales increased 1% for Fiscal 2023 compared to Fiscal 2022. The Company has not disclosed comparable sales, except for comparable direct sales, for Fiscal 2023 and Fiscal 2022, as it believes that overall sales is a more meaningful metric during these periods due to closed stores and the impact of COVID-19.

Overall sales for Fiscal 2023 compared to Fiscal 2022 increased 2% at Schuh and 24% at Johnston & Murphy, partially offset by a decrease of 6% at Journeys and a decrease of 8% at Genesco Brands Group.  On a constant currency basis, Schuh sales were up 15% for Fiscal 2023.

Gross margin for Fiscal 2023 was 47.6%, down 120 basis points compared with 48.8% last year and down 80 basis points compared with Fiscal 2020 at 48.4%. The decrease as a percentage of sales compared to Fiscal 2022 is due primarily to a more normalized promotional environment in the Journeys business and increased freight and logistics costs in the Johnston & Murphy and Genesco Brands Group businesses.

Selling and administrative expense for Fiscal 2023 increased 100 basis points as a percentage of sales compared with last year and decreased 30 basis points compared with Fiscal 2020.  Adjusted selling and administrative expense as a percentage of sales for Fiscal 2023 was 43.6%, up 110 basis points, compared to 42.5% last year and decreased 30 basis points compared to 43.9% in Fiscal 2020.  Fiscal 2022 included one-time benefits for rent credits and government relief of approximately 130 basis points.  Excluding these one-time benefits last year, deleverage in selling salaries, marketing expenses and compensation expenses more than offset the leverage in performance-based compensation and occupancy expenses.

Genesco's GAAP operating income for Fiscal 2023 was $93.2 million, or 3.9% of sales, compared to $155.6 million, or 6.4% of sales last year and $83.3 million, or 3.8% of sales for Fiscal 2020.  Adjusted for the Excluded Items in all periods, operating income was $96.8 million this year compared to $151.5 million last year and operating income of $99.2 million in Fiscal 2020.  Adjusted operating margin was 4.1% of sales in Fiscal 2023 and 6.3% of sales last year and 4.5% in Fiscal 2020. 

The effective tax rate was 19.8% in Fiscal 2023 compared to 24.9% last year and 25.1% in Fiscal 2020.  The adjusted tax rate, reflecting Excluded Items, was 24.0% in Fiscal 2023 compared to 25.8% last year and 26.9% in Fiscal 2020.  The lower adjusted tax rate for Fiscal 2023 as compared to Fiscal 2022 reflects a reduction in the effective tax rate the Company expects for jurisdictions in which it is profitable.

GAAP earnings from continuing operations were $72.2 million in Fiscal 2023, compared to $114.9 million last year and $61.8 million in Fiscal 2020.  Adjusted for the Excluded Items in all periods, earnings from continuing operations were $71.1 million, or $5.59 per share, in Fiscal 2023, compared to $110.6 million, or $7.62 per share, last year and $71.8 million, or $4.58 per share, in Fiscal 2020.

Cash, Borrowings and Inventory

Cash as of January 28, 2023 was $48.0 million, compared with $320.5 million as of January 29, 2022.  Total debt at the end of the fourth quarter of Fiscal 2023 was $44.9 million compared with $15.7 million at the end of last year's fourth quarter.  During the past 12 months, our strong cash balances enabled us to reinvest in our business for growth by replenishing about $195 million of net inventory and returning capital to shareholders with approximately $73 million of share repurchases. Inventories increased 65% in the fourth quarter of Fiscal 2023 on a year-over-year basis, as outsized stimulus demand and supply chain limitations resulted in unusually low inventory last year. Inventories increased 25% this year when compared to the fourth quarter of Fiscal 2020, prior to the pandemic.   

Capital Expenditures and Store Activity

For the fourth quarter, capital expenditures were $20 million, related primarily to retail stores and digital and omnichannel initiatives.  Depreciation and amortization was $11 million.  For Fiscal 2023, capital expenditures were $50 million and depreciation and amortization was $41 million not including $8 million of net capital for our corporate headquarters and related depreciation. During the quarter, the Company opened 17 stores and closed eleven stores.  The Company ended the quarter with 1,410 stores compared with 1,425 stores at the end of the fourth quarter last year, or a decrease of 1%.  Square footage was flat on a year-over-year basis.

Share Repurchases

The Company did not repurchase any shares during the fourth quarter of Fiscal 2023. The Company repurchased 1,380,272 shares, or 10% of common shares outstanding, during Fiscal 2023 at a cost of $72.7 million or an average of $52.66 per share. The Company currently has $34.1 million remaining on its expanded share repurchase authorization announced in February 2022.

Fiscal 2024 Outlook

For Fiscal 2024, the Company expects:

  • Sales to be flat to up 2%, or down 1% to up 1%, excluding the 53rd week this year, compared to FY23
  • Adjusted diluted earnings per share from continuing operations in the range of $5.10 to $5.90, with an expectation that earnings per share for the year will be near the mid-point of the range.2
  • Guidance assumes no further share repurchases and a tax rate of 26%

Please refer to the Q4FY23 conference call and Q4FY23 Summary Results presentation for details regarding guidance assumptions.

Conference Call, Management Commentary and Investor Presentation

The Company has posted detailed financial commentary and a supplemental financial presentation of fourth quarter results on its website, www.genesco.com, in the investor relations section.  The Company's live conference call on March 9, 2023, at 7:30 a.m. (Central time), may be accessed through the Company's website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.

__________________________

2A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to GAAP is included in Schedule B to this press release.

Safe Harbor Statement

This release contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, stores openings and closures, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as "intend," "expect," "feel," "believe," "anticipate," "optimistic" and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting  from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company's ability to adequately staff and operate stores.  Differences from expectations could also result from stores closures and effects on the business as a result of civil disturbances; 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 imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company's ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the effects of the British decision to exit the European Union, impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; 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 the ability to renew leases in existing stores and control or lower occupancy costs, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company's ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company's ability to achieve expected digital gains and gain market share; 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, 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 the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company's business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company's ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and 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, the Company's SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company's website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.

About Genesco Inc.

Genesco Inc., a Nashville-based specialty retailer and branded company, sells footwear and accessories in more than 1,400 retail stores throughout the U.S., Canada, the United Kingdom and the Republic of Ireland, principally under the names Journeys, Journeys Kidz, Little Burgundy, Schuh, Schuh Kids, Johnston & Murphy, and on internet websites www.journeys.comwww.journeyskidz.comwww.journeys.cawww.littleburgundyshoes.comwww.schuh.co.ukwww.schuh.iewww.schuh.euwww.johnstonmurphy.comwww.johnstonmurphy.cawww.nashvilleshoewarehouse.com, and www.dockersshoes.com. In addition, Genesco sells footwear at wholesale under its Johnston & Murphy brand, the licensed Levi's brand, the licensed Dockers brand, the licensed Bass brand, and other brands. Genesco is committed to progress in its diversity, equity and inclusion efforts, and the Company's environmental, social and governance stewardship. For more information on Genesco and its operating divisions, please visit www.genesco.com.

GENESCO INC.


Condensed Consolidated Statements of Operations


(in thousands, except per share data)


(Unaudited)
















Quarter 4


Quarter 4






Jan. 28,

% of


Jan. 29,

% of






2023

Net Sales


2022

Net Sales



Net sales



$ 725,020

100.0 %


$ 727,660

100.0 %



Cost of sales



388,395

53.6 %


371,909

51.1 %



   Gross margin



336,625

46.4 %


355,751

48.9 %



Selling and administrative expenses



285,776

39.4 %


290,478

39.9 %



Asset impairments and other, net



1,009

0.1 %


(18,110)

-2.5 %



   Operating income 



49,840

6.9 %


83,383

11.5 %



Other components of net periodic benefit cost



50

0.0 %


56

0.0 %



Interest expense, net



1,312

0.2 %


517

0.1 %



   Earnings from continuing operations before 










     income taxes



48,478

6.7 %


82,810

11.4 %



Income tax expense 



9,280

1.3 %


20,612

2.8 %



   Earnings from continuing operations



39,198

5.4 %


62,198

8.5 %



Loss from discontinued operations, net of tax



(249)

0.0 %


(58)

0.0 %



   Net Earnings 



$   38,949

5.4 %


$   62,140

8.5 %













Basic earnings per share:










    Before discontinued operations



$       3.29



$       4.53




    Net earnings 



$       3.27



$       4.52














Diluted earnings per share:










    Before discontinued operations



$       3.23



$       4.41




    Net earnings 



$       3.21



$       4.41














Weighted-average shares outstanding:










    Basic



11,914



13,738




    Diluted



12,124



14,106













 

GENESCO INC.


Condensed Consolidated Statements of Operations


(in thousands, except per share data)


(Unaudited)
















Fiscal Year Ended


Fiscal Year Ended






Jan. 28,

% of


Jan. 29,

% of






2023

Net Sales


2022

Net Sales



Net sales



$ 2,384,888

100.0 %


$ 2,422,084

100.0 %



Cost of sales



1,248,698

52.4 %


1,240,948

51.2 %



   Gross margin



1,136,190

47.6 %


1,181,136

48.8 %



Selling and administrative expenses



1,042,094

43.7 %


1,033,625

42.7 %



Asset impairments and other, net



855

0.0 %


(8,056)

-0.3 %



   Operating income 



93,241

3.9 %


155,567

6.4 %



Other components of net periodic benefit cost 



248

0.0 %


128

0.0 %



Interest expense, net



2,920

0.1 %


2,448

0.1 %



   Earnings from continuing operations before 










     income taxes



90,073

3.8 %


152,991

6.3 %



Income tax expense



17,831

0.7 %


38,044

1.6 %



   Earnings  from continuing operations



72,242

3.0 %


114,947

4.7 %



Loss from discontinued operations, net of tax



(327)

0.0 %


(97)

0.0 %



   Net Earnings



$      71,915

3.0 %


$    114,850

4.7 %













Basic earnings per share:










    Before discontinued operations



$          5.80



$          8.11




    Net earnings 



$          5.77



$          8.11














Diluted earnings per share:










    Before discontinued operations



$          5.69



$          7.92




    Net earnings 



$          5.66



$          7.92














Weighted-average shares outstanding:










    Basic



12,457



14,170




    Diluted



12,707



14,509













 

GENESCO INC.


Sales/Earnings Summary by Segment


(in thousands)


(Unaudited)
















Quarter 4


Quarter 4






Jan. 28,

% of


Jan. 29,

% of






2023

Net Sales


2022

Net Sales



Sales:










    Journeys Group



$ 465,807

64.2 %


$ 473,725

65.1 %



    Schuh Group



137,516

19.0 %


128,979

17.7 %



    Johnston & Murphy Group



89,311

12.3 %


76,099

10.5 %



    Genesco Brands Group



32,386

4.5 %


48,857

6.7 %













    Net Sales



$ 725,020

100.0 %


$ 727,660

100.0 %



Operating Income (Loss):










    Journeys Group



$   43,169

9.3 %


$   58,441

12.3 %



    Schuh Group



12,341

9.0 %


9,780

7.6 %



    Johnston & Murphy Group



7,108

8.0 %


4,617

6.1 %



    Genesco Brands Group



(3,229)

-10.0 %


3,163

6.5 %



    Corporate and Other(1)



(9,549)

-1.3 %


7,382

1.0 %



Operating income 



49,840

6.9 %


83,383

11.5 %



Other components of net periodic benefit cost 



50

0.0 %


56

0.0 %



Interest, net



1,312

0.2 %


517

0.1 %



Earnings from continuing operations before                    










   income taxes



48,478

6.7 %


82,810

11.4 %



Income tax expense 



9,280

1.3 %


20,612

2.8 %



Earnings from continuing operations



39,198

5.4 %


62,198

8.5 %



Loss from discontinued operations, net of tax



(249)

0.0 %


(58)

0.0 %



Net Earnings



$   38,949

5.4 %


$   62,140

8.5 %























(1) Includes a $1.0 million charge in the fourth quarter of Fiscal 2023 for asset impairments.  Includes an $18.1 million gain in the fourth 



    quarter of Fiscal 2022 for the sale of a distribution warehouse.












 

GENESCO INC.


Sales/Earnings Summary by Segment


(in thousands)


(Unaudited)
















Fiscal Year Ended


Fiscal Year Ended






Jan. 28,

% of


Jan. 29,

% of






2023

Net Sales


2022

Net Sales



Sales:










    Journeys Group



$ 1,482,203

62.1 %


$ 1,576,475

65.1 %



    Schuh Group



432,002

18.1 %


423,560

17.5 %



    Johnston & Murphy Group



314,759

13.2 %


252,855

10.4 %



    Genesco Brands Group



155,924

6.5 %


169,194

7.0 %













    Net Sales



$ 2,384,888

100.0 %


$ 2,422,084

100.0 %



Operating Income (Loss):










    Journeys Group 



$      94,404

6.4 %


$    165,336

10.5 %



    Schuh Group



17,601

4.1 %


19,257

4.5 %



    Johnston & Murphy Group



14,364

4.6 %


7,029

2.8 %



    Genesco Brands Group



(678)

-0.4 %


6,583

3.9 %



    Corporate and Other(1)



(32,450)

-1.4 %


(42,638)

-1.8 %



Operating income 



93,241

3.9 %


155,567

6.4 %



Other components of net periodic benefit cost 



248

0.0 %


128

0.0 %



Interest, net



2,920

0.1 %


2,448

0.1 %



Earnings from continuing operations before                    










   income taxes



90,073

3.8 %


152,991

6.3 %



Income tax expense



17,831

0.7 %


38,044

1.6 %



Earnings from continuing operations



72,242

3.0 %


114,947

4.7 %



Loss from discontinued operations, net of tax



(327)

0.0 %


(97)

0.0 %



Net Earnings



$      71,915

3.0 %


$    114,850

4.7 %













(1) Includes a $0.9 million charge in Fiscal 2023 which includes $1.6 million for asset impairments, partially offset by a $0.7 million gain on the 



    termination of the pension plan.










    Includes an $8.1 million gain in Fiscal 2022 which includes an $18.1 million gain on the sale of a distribution warehouse and a $0.6 million  



    insurance gain, partially offset by $8.6 million for professional fees related to the actions of a shareholder activist and $2.0 million for asset



    impairments.



















 


GENESCO INC.



Condensed Consolidated Balance Sheets



(in thousands)



(Unaudited)






















Jan. 28, 2023


Jan. 29, 2022



Assets








Cash 



$         47,990


$          320,525



Accounts receivable



40,818


39,509



Inventories



458,017


278,200



Other current assets(1)



25,844


71,564



   Total current assets



572,669


709,798



Property and equipment



233,733


216,308



Operating lease right of use assets



470,991


543,789



Goodwill and other intangibles



65,553


68,411



Non-current prepaid income taxes



54,111


-



Other non-current assets



59,369


23,793



   Total Assets



$    1,456,426


$      1,562,099











Liabilities and Equity








Accounts payable



$       144,998


$          152,484



Current portion operating lease liabilities



134,458


145,088



Other current liabilities



81,327


134,156



   Total current liabilities



360,783


431,728



Long-term debt



44,858


15,679



Long-term operating lease liabilities



401,113


471,878



Other long-term liabilities



42,706


40,346



Equity



606,966


602,468



   Total Liabilities and Equity



$    1,456,426


$      1,562,099











(1) Includes prepaid income taxes of $53.4 million at January 29, 2022


















 

GENESCO INC.

Store Count Activity
























Balance




Balance





Balance


01/30/21

Open

Close


01/29/22


Open

Close


1/28/23

Journeys Group

1,159

5

29


1,135


22

27


1,130

Schuh Group

123

0

0


123


4

5


122

Johnston & Murphy Group

178

1

12


167


2

11


158

Total Retail Stores

1,460

6

41


1,425


28

43


1,410























 

GENESCO INC.

Store Count Activity
















Balance




Balance



10/29/22

Open

Close


1/28/23


Journeys Group

1,123

14

7


1,130


Schuh Group

122

2

2


122


Johnston & Murphy Group

159

1

2


158


Total Retail Stores

1,404

17

11


1,410









 

GENESCO INC.

Comparable Sales(1)















Quarter 4



Fiscal Year Ended




Jan. 28,


Jan. 29,



Jan. 28,


Jan. 29,




2023


2022



2023


2022

Journeys Group



-1 %


1 %



NA


NA

Schuh Group



20 %


-2 %



NA


NA

Johnston & Murphy Group



23 %


38 %



NA


NA

  Total Comparable Sales



5 %


3 %



NA


NA












Same Store Sales



1 %


10 %



NA


NA

Comparable Direct Sales



21 %


-12 %



0 %


-2 %












(1) As a result of store closures during Fiscal 2021 and the first quarter of Fiscal 2022 in response to the COVID-19 


    pandemic and the Company's policy of removing any store closed for seven consecutive days from comparable sales, 


    the Company has not included comparable sales for Fiscal 2023 and Fiscal 2022, except for comparable direct sales,


    as it felt that overall sales was a more meaningful metric during those periods.




 













Schedule B
















Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Three Months Ended January 28, 2023, January 29, 2022 and February 1, 2020















The Company believes that disclosure of earnings and earnings per share from continuing operations and operating income adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
































 Quarter 4 


 Quarter 4 


 Quarter 4 




 January 28, 2023 


 January 29, 2022 


 February 1, 2020 





 Net of 

 Per Share 



 Net of 

 Per Share 



 Net of 

 Per Share 


In Thousands (except per share amounts)


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 


Earnings from continuing operations, as reported



$        39,198

$3.23



$62,198

$4.41



$35,515

$2.49
















Asset impairments and other adjustments:














  Asset impairment charges


$            1,009

729

0.06


$        -

6

0.00


$  1,258

965

0.07


  Fees related to shareholder activist


-

(5)

0.00


(25)

23

0.00


-

-

0.00


  Expenses related to new HQ building


112

100

0.01


1,093

794

0.05


-

-

0.00


  Gain on sale of warehouse


-

-

0.00


(18,085)

(12,893)

(0.91)


-

-

0.00


  Insurance gain


-

-

0.00


-

(3)

0.00


-

-

0.00


  Pension settlement


-

-

0.00


-

-

0.00


11,510

8,409

0.59


  Gain on lease terminations


-

-

0.00


-

-

0.00


(502)

(366)

(0.03)


  Acquisition expenses


-

-

0.00


-

-

0.00


2,474

1,808

0.13


  Gain on Hurricane Maria


-

-

0.00


-

-

0.00


(149)

(110)

(0.01)


  Gain on sale of Lids building


-

-

0.00


-

-

0.00


(586)

(428)

(0.03)


  Total asset impairments and other adjustments


$            1,121

824

0.07


$(17,017)

(12,073)

(0.86)


$14,005

10,278

0.72
















Income tax expense adjustments:














  Other tax items



(2,939)

(0.24)



(998)

(0.07)



(1,719)

(0.12)


  Total income tax expense adjustments



(2,939)

(0.24)



(998)

(0.07)



(1,719)

(0.12)
















Adjusted earnings from continuing operations (1) and (2)



$        37,083

$3.06



$49,127

$3.48



$44,074

$3.09






























(1) The adjusted tax rate for the fourth quarter of Fiscal 2023, 2022 and 2020 is 25.2%, 25.3% and 25.3%, respectively.




























(2) EPS reflects 12.1 million, 14.1 million and 14.3 million share count for the fourth quarter of Fiscal 2023, 2022 and 2020, respectively, which includes common stock equivalents in all periods.


 

Genesco Inc.

Adjustments to Reported Operating Income and Selling and Administrative Expenses

Three Months Ended January 28, 2023, January 29, 2022 and February 1, 2020








  Quarter 4 - January 28, 2023  



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$           43,169

$               -

$           43,169

Schuh Group


12,341

-

12,341

Johnston & Murphy Group


7,108

-

7,108

Genesco Brands Group


(3,229)

-

(3,229)

Corporate and Other


(9,549)

1,121

(8,428)

Total Operating Income


$           49,840

$          1,121

$           50,961

  % of sales


6.9 %


7.0 %








 Quarter 4 - January 29, 2022  



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$           58,441

$               -

$           58,441

Schuh Group


9,780

-

9,780

Johnston & Murphy Group


4,617

-

4,617

Genesco Brands Group


3,163

-

3,163

Corporate and Other


7,382

(17,017)

(9,635)

Total Operating Income


$           83,383

$       (17,017)

$           66,366

  % of sales


11.5 %


9.1 %








 Quarter 4 - February 1, 2020  



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$           55,685

$               -

$           55,685

Schuh Group


5,679

-

5,679

Johnston & Murphy Group


7,363

-

7,363

Genesco Brands Group


(849)

-

(849)

Corporate and Other


(22,549)

14,005

(8,544)

Total Operating Income


$           45,329

$        14,005

$           59,334

  % of sales


6.7 %


8.8 %













 Quarter 4 

In Thousands


 Jan. 28, 2023 

 Jan. 29, 2022 

 Feb. 1, 2020 

Selling and administrative expenses, as reported


$         285,776

$       290,478

$         260,612






  Expenses related to new HQ building


(112)

(1,093)

-

  Acquisition expenses




(2,474)

  Total adjustments


(112)

(1,093)

(2,474)

Adjusted selling and administrative expenses


$         285,664

$       289,385

$         258,138

  % of sales


39.4 %

39.8 %

38.1 %

 

 

Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Fiscal Year Ended January 28, 2023, January 29, 2022 and February 1, 2020















The Company believes that disclosure of earnings and earnings per share from continuing operations and operating income  adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
































 Fiscal Year Ended 


 Fiscal Year Ended 


 Fiscal Year Ended 




 January 28, 2023 


 January 29, 2022 


 February 1, 2020 





 Net of 

 Per Share 



 Net of 

 Per Share 



 Net of 

 Per Share 


In Thousands (except per share amounts)


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 


Earnings from continuing operations, as reported



$        72,242

$5.69



$114,947

$7.92



$61,757

$3.94
















Asset impairments and other adjustments:














  Asset impairment charges


$            1,550

1,183

0.09


$ 2,049

1,694

0.12


$  3,095

2,261

0.14


  Gain on pension termination


(695)

(525)

(0.04)


-

-

0.00


-

-

0.00


  Fees related to shareholder activist


-

-

0.00


8,558

6,101

0.42


-

-

0.00


  Expenses related to new HQ building


2,657

2,005

0.16


4,004

2,855

0.20


-

-

0.00


  Insurance gain


-

-

0.00


(578)

(412)

(0.03)


-

-

0.00


  Gain on sale of warehouse


-

-

0.00


(18,085)

(12,893)

(0.89)


-

-

0.00


  Pension settlement


-

-

0.00


-

-

0.00


11,510

8,409

0.54


  Acquisition expenses


-

-

0.00


-

-

0.00


2,474

1,808

0.12


  Gain on sale of Lids building


-

-

0.00


-

-

0.00


(586)

(428)

(0.03)


  Gain on lease terminations


-

-

0.00


-

-

0.00


(458)

(335)

(0.02)


  Gain on Hurricane Maria


-

-

0.00


-

-

0.00


(187)

(137)

(0.01)


  Total asset impairments and other adjustments


$            3,512

2,663

0.21


$(4,052)

(2,655)

(0.18)


$15,848

11,578

0.74
















Income tax expense adjustments:














  Tax impact share based awards



(635)

(0.05)



(1,747)

(0.12)



(54)

0.00


  Other tax items



(3,188)

(0.26)



17

0.00



(1,475)

(0.10)


  Total income tax expense adjustments



(3,823)

(0.31)



(1,730)

(0.12)



(1,529)

(0.10)
















Adjusted earnings from continuing operations (1) and (2)



$        71,082

$5.59



$110,562

$7.62



$71,806

$4.58






























(1) The adjusted tax rate for Fiscal 2023, 2022 and 2020 is 24.0%, 25.8% and 26.9%, respectively.




























(2) EPS reflects 12.7 million, 14.5 million and 15.7 million share count for Fiscal 2023, 2022 and 2020, respectively, which includes common stock equivalents in all periods.


 

Genesco Inc.

Adjustments to Reported Operating Income and Selling and Administrative Expenses

Fiscal Year Ended January 28, 2023, January 29, 2022 and February 1, 2020








 Fiscal Year Ended January 28, 2023 



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$           94,404

$               -

$           94,404

Schuh Group


17,601

-

17,601

Johnston & Murphy Group


14,364

-

14,364

Genesco Brands Group


(678)

-

(678)

Corporate and Other


(32,450)

3,512

(28,938)

Total Operating Income


$           93,241

$          3,512

$           96,753

  % of sales


3.9 %


4.1 %








 Fiscal Year Ended January 29, 2022 



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$         165,336

$               -

$         165,336

Schuh Group


19,257

-

19,257

Johnston & Murphy Group


7,029

-

7,029

Genesco Brands Group


6,583

-

6,583

Corporate and Other


(42,638)

(4,052)

(46,690)

Total Operating Income 


$         155,567

$         (4,052)

$         151,515

  % of sales


6.4 %


6.3 %








 Fiscal Year Ended February 1, 2020 



 Operating 

 Asset Impair 

Adj Operating

In Thousands 


 Income (Loss) 

& Other Adj

 Income (Loss) 

Journeys Group


$         114,945

$               -

$         114,945

Schuh Group


4,659

-

4,659

Johnston & Murphy Group


17,702

-

17,702

Genesco Brands Group


(698)

-

(698)

Corporate and Other


(53,290)

15,848

(37,442)

Total Operating Income


$           83,318

$        15,848

$           99,166

  % of sales


3.8 %


4.5 %













 Fiscal Year Ended 

In Thousands


 Jan. 28, 2023 

 Jan. 29, 2022 

 Feb. 1, 2020 

Selling and administrative expenses, as reported


$      1,042,094

$    1,033,625

$         966,423






  Expenses related to new HQ building


(2,657)

(4,004)

-

  Acquisition expenses


-

-

(2,474)

  Total adjustments


(2,657)

(4,004)

(2,474)

Adjusted selling and administrative expenses


$      1,039,437

$    1,029,621

$         963,949

  % of sales


43.6 %

42.5 %

43.9 %

 

Schedule B







Genesco Inc.

Adjustments to Forecasted Earnings from Continuing Operations

Fiscal Year Ending February 3, 2024







In millions (except per share amounts)


High Guidance

Low Guidance



Fiscal 2024

Fiscal 2024



Net of Tax

Per Share

Net of Tax

Per Share

Forecasted earnings from continuing operations 


$     70.9

$     5.82

$     60.7

$     4.99







Asset impairments and other adjustments:






Asset impairments and other matters


1.0

0.08

1.4

0.11

Total asset impairments and other adjustments (1)


1.0

0.08

1.4

0.11







Adjusted forecasted earnings from continuing operations (2)


$     71.9

$     5.90

$     62.1

$     5.10













(1) All adjustments are net of tax where applicable.  The forecasted tax rate for Fiscal 2024 is approximately 26%.








(2) EPS reflects 12.2 million share count for Fiscal 2024 which includes 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.


 

Cision View original content:https://www.prnewswire.com/news-releases/genesco-inc-reports-fiscal-2023-fourth-quarter-and-full-year-results-301767491.html

SOURCE Genesco Inc.

FAQ

What were Genesco's fourth quarter earnings for FY23?

Genesco reported a GAAP EPS of $3.23 for the fourth quarter of FY23.

How did Genesco's e-commerce sales perform in FY23?

E-commerce sales decreased by 5% compared to FY22 but increased by 67% compared to FY20.

What is Genesco's outlook for FY24?

Genesco forecasts adjusted EPS for FY24 to be between $5.10 and $5.90.

What factors affected Genesco's sales performance in FY23?

Sales were impacted by foreign exchange pressures and decreased wholesale sales.

How much did Genesco repurchase in shares during FY23?

Genesco repurchased approximately $72.7 million in shares during FY23.

Genesco Inc.

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