Genesco Inc. Reports Fiscal 2024 First Quarter Results
First Quarter Fiscal 2024 Financial Summary
-
Net sales of
$483 million 7% compared to Q1FY23 -
Excluding the impact of lower exchange rates, net sales decreased
6% compared to Q1FY23 -
Comps down
5% , with stores down8% and direct up7% -
E-commerce sales represented
21% of retail sales compared to19% last year -
GAAP EPS from continuing operations was (
$1.60 $0.37 -
Non-GAAP EPS from continuing operations was (
$1.59 $0.44 -
Repurchased
$9.2 million $25.0 million
Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “Following a positive end to the holiday season, the first quarter proved considerably more challenging than we anticipated. Consumer demand at Journeys dropped off significantly early in the quarter and did not improve as we changed seasons in the latter part of March and into April, offsetting another quarter of record sales at Schuh and Johnston & Murphy. In response, we are taking swift actions to mitigate the consumer shift in the marketplace, including closing more underperforming Journeys stores, reducing our cost base further, and working to quickly refine our product assortment. However, given the ongoing uncertainty around near-term consumer behavior, we are taking a much more conservative view and revising our outlook for the remainder of Fiscal 2024.”
She continued, “Despite the difficulties in the current environment, we remain excited about our future prospects and the strength of our competitive positioning. Having navigated multiple adverse retail cycles, our team has demonstrated a track record of success, the resilience of our business, and the ability to rebound and come out ahead. As the leading destination for teen fashion footwear, and key partner to our brands, I feel confident that our footwear focused strategy and the strategic initiatives we are implementing will position Journeys to emerge from this period in an even stronger competitive position.”
__________________________ |
1Excludes a charge for asset impairments, net of tax effect in the first quarter of Fiscal 2024 (“Excluded Items”). A reconciliation of earnings (loss) and earnings (loss) per share from continuing operations in accordance with |
First Quarter Review
Net sales for the first quarter of Fiscal 2024 of
Comparable Sales |
|||||
|
|
|
|||
Comparable Same Store and Direct Sales: |
1QFY24 |
1QFY23 |
|||
Journeys Group |
(14 |
)% |
NA |
||
Schuh Group |
13 |
% |
NA |
||
Johnston & Murphy Group |
18 |
% |
NA |
||
Total Genesco Comparable Sales |
(5 |
)% |
NA |
||
Same Store Sales |
(8 |
)% |
NA |
||
Comparable Direct Sales |
7 |
% |
(26 |
)% |
|
The overall sales decrease of
First quarter gross margin this year was
Selling and administrative expense for the first quarter this year increased 520 basis points as a percentage of sales compared with last year. Adjusted selling and administrative expense for the first quarter this year increased 550 basis points as a percentage of sales compared with last year. The increase as a percentage of sales compared to Fiscal 2023 reflects the deleverage of expenses, especially compensation expense, selling salaries and occupancy expense as a result of decreased revenue in the first quarter of Fiscal 2024.
Genesco’s GAAP operating loss for the first quarter was
The effective tax rate for the quarter was
GAAP loss from continuing operations was
Cash, Borrowings and Inventory
Cash as of April 29, 2023 was
Capital Expenditures and Store Activity
For the first quarter this year, capital expenditures were
Share Repurchases
The Company repurchased 255,000 shares during the first quarter of Fiscal 2024 at a cost of
Store Closing and Cost Savings Update
- The Company now expects to close more than 100 Journeys stores in Fiscal 2024, versus prior expectations to close 60 stores
-
The Company now anticipates up to
$40 million $20 million $25 million $20 million
Revised Fiscal 2024 Outlook
For Fiscal 2024, the Company now expects:
-
Sales to be down
4% to5% , or down5% to6% excluding the 53rd week this year, compared to Fiscal 23 -
Adjusted diluted earnings per share from continuing operations in the range of
$2.00 $2.50 -
Guidance assumes no further share repurchases and a tax rate of
25%
| __________________________ |
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. |
Conference Call, Management Commentary and Investor Presentation
The Company has posted detailed financial commentary and a supplemental financial presentation of first quarter results on its website, www.genesco.com, in the investor relations section. The Company's live conference call on May 25, 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.
Safe Harbor Statement
This release contains forward-looking statements, including those regarding future sales, earnings, cost reductions, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, stores openings and closures, share repurchases, 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,” “should” 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 store 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
About Genesco Inc.
Genesco Inc., a
| GENESCO INC. | |||||||||||||
| Condensed Consolidated Statements of Operations | |||||||||||||
| (in thousands, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Quarter 1 | Quarter 1 | ||||||||||||
| April 29, | % of | April 30, | % of | ||||||||||
|
2023 |
|
Net Sales |
|
2022 |
|
Net Sales |
||||||
| Net sales | $ |
483,332 |
|
100.0 |
% |
$ |
520,748 |
|
100.0 |
% |
|||
| Cost of sales |
|
254,524 |
|
52.7 |
% |
|
269,304 |
|
51.7 |
% |
|||
| Gross margin |
|
228,808 |
|
47.3 |
% |
|
251,444 |
|
48.3 |
% |
|||
| Selling and administrative expenses |
|
251,497 |
|
52.0 |
% |
|
243,481 |
|
46.8 |
% |
|||
| Asset impairments and other, net |
|
308 |
|
0.1 |
% |
|
(283 |
) |
-0.1 |
% |
|||
| Operating income (loss) |
|
(22,997 |
) |
-4.8 |
% |
|
8,246 |
|
1.6 |
% |
|||
| Other components of net periodic benefit cost |
|
92 |
|
0.0 |
% |
|
98 |
|
0.0 |
% |
|||
| Interest expense, net |
|
1,651 |
|
0.3 |
% |
|
297 |
|
0.1 |
% |
|||
| Earnings (loss) from continuing operations before income taxes |
|
(24,740 |
) |
-5.1 |
% |
|
7,851 |
|
1.5 |
% |
|||
| Income tax expense (benefit) |
|
(5,865 |
) |
-1.2 |
% |
|
2,882 |
|
0.6 |
% |
|||
| Earnings (loss) from continuing operations |
|
(18,875 |
) |
-3.9 |
% |
|
4,969 |
|
1.0 |
% |
|||
| Loss from discontinued operations, net of tax |
|
(15 |
) |
0.0 |
% |
|
(22 |
) |
0.0 |
% |
|||
| Net Earnings (Loss) | $ |
(18,890 |
) |
-3.9 |
% |
$ |
4,947 |
|
0.9 |
% |
|||
| Basic earnings (loss) per share: | |||||||||||||
| Before discontinued operations | $ |
(1.60 |
) |
$ |
0.38 |
|
|||||||
| Net earnings (loss) | $ |
(1.60 |
) |
$ |
0.38 |
|
|||||||
| Diluted earnings (loss) per share: | |||||||||||||
| Before discontinued operations | $ |
(1.60 |
) |
$ |
0.37 |
|
|||||||
| Net earnings (loss) | $ |
(1.60 |
) |
$ |
0.37 |
|
|||||||
| Weighted-average shares outstanding: | |||||||||||||
| Basic |
|
11,818 |
|
|
12,961 |
|
|||||||
| Diluted |
|
11,818 |
|
|
13,369 |
|
|||||||
| GENESCO INC. | |||||||||||||
| Sales/Earnings Summary by Segment | |||||||||||||
| (in thousands) | |||||||||||||
| (Unaudited) | |||||||||||||
| Quarter 1 | Quarter 1 | ||||||||||||
| April 29, | % of | April 30, | % of | ||||||||||
|
2023 |
|
Net Sales |
|
2022 |
|
Net Sales | ||||||
| Sales: | |||||||||||||
| Journeys Group | $ |
272,190 |
|
56.3 |
% |
$ |
314,445 |
|
60.4 |
% |
|||
| Schuh Group |
|
93,105 |
|
19.3 |
% |
|
88,159 |
|
16.9 |
% |
|||
| Johnston & Murphy Group |
|
82,627 |
|
17.1 |
% |
|
71,016 |
|
13.6 |
% |
|||
| Genesco Brands Group |
|
35,410 |
|
7.3 |
% |
|
47,128 |
|
9.1 |
% |
|||
| Net Sales | $ |
483,332 |
|
100.0 |
% |
$ |
520,748 |
|
100.0 |
% |
|||
| Operating income (loss): | |||||||||||||
| Journeys Group | $ |
(18,362 |
) |
-6.7 |
% |
$ |
14,930 |
|
4.7 |
% |
|||
| Schuh Group |
|
(1,790 |
) |
-1.9 |
% |
|
(2,746 |
) |
-3.1 |
% |
|||
| Johnston & Murphy Group |
|
4,806 |
|
5.8 |
% |
|
550 |
|
0.8 |
% |
|||
| Genesco Brands Group |
|
(32 |
) |
-0.1 |
% |
|
3,793 |
|
8.0 |
% |
|||
| Corporate and Other(1) |
|
(7,619 |
) |
-1.6 |
% |
|
(8,281 |
) |
-1.6 |
% |
|||
| Operating income (loss) |
|
(22,997 |
) |
-4.8 |
% |
|
8,246 |
|
1.6 |
% |
|||
| Other components of net periodic benefit cost |
|
92 |
|
0.0 |
% |
|
98 |
|
0.0 |
% |
|||
| Interest expense, net |
|
1,651 |
|
0.3 |
% |
|
297 |
|
0.1 |
% |
|||
| Earnings (loss) from continuing operations before income taxes |
|
(24,740 |
) |
-5.1 |
% |
|
7,851 |
|
1.5 |
% |
|||
| Income tax expense (benefit) |
|
(5,865 |
) |
-1.2 |
% |
|
2,882 |
|
0.6 |
% |
|||
| Earnings (loss) from continuing operations |
|
(18,875 |
) |
-3.9 |
% |
|
4,969 |
|
1.0 |
% |
|||
| Loss from discontinued operations, net of tax |
|
(15 |
) |
0.0 |
% |
|
(22 |
) |
0.0 |
% |
|||
| Net Earnings (Loss) | $ |
(18,890 |
) |
-3.9 |
% |
$ |
4,947 |
|
0.9 |
% |
|||
| (1) Includes a |
|||||||||||||
| Includes a |
|||||||||||||
| GENESCO INC. | |||||||
| Condensed Consolidated Balance Sheets | |||||||
| (in thousands) | |||||||
| (Unaudited) | |||||||
| April 29, 2023 | April 30, 2022 | ||||||
| Assets | |||||||
| Cash and cash equivalents | $ |
31,786 |
$ |
200,623 |
|||
| Accounts receivable |
|
54,068 |
|
48,868 |
|||
| Inventories |
|
470,763 |
|
401,479 |
|||
| Other current assets (1) |
|
42,325 |
|
74,609 |
|||
| Total current assets |
|
598,942 |
|
725,579 |
|||
| Property and equipment |
|
239,120 |
|
219,421 |
|||
| Operating lease right of use assets |
|
477,962 |
|
508,986 |
|||
| Goodwill and other intangibles |
|
65,466 |
|
66,785 |
|||
| Non-current prepaid income taxes |
|
54,567 |
|
- |
|||
| Other non-current assets |
|
59,255 |
|
27,671 |
|||
| Total Assets | $ |
1,495,312 |
$ |
1,548,442 |
|||
| Liabilities and Equity | |||||||
| Accounts payable | $ |
143,814 |
$ |
243,224 |
|||
| Current portion operating lease liabilities |
|
131,830 |
|
137,770 |
|||
| Other current liabilities |
|
75,992 |
|
83,882 |
|||
| Total current liabilities |
|
351,636 |
|
464,876 |
|||
| Long-term debt |
|
118,151 |
|
14,712 |
|||
| Long-term operating lease liabilities |
|
399,374 |
|
430,606 |
|||
| Other long-term liabilities |
|
43,526 |
|
37,910 |
|||
| Equity |
|
582,625 |
|
600,338 |
|||
| Total Liabilities and Equity | $ |
1,495,312 |
$ |
1,548,442 |
|||
| (1) Includes prepaid income taxes of |
|||||||
| GENESCO INC. | ||||||||||
| Store Count Activity | ||||||||||
| Balance | Balance | Balance | ||||||||
| 01/29/22 | Open | Close | 01/28/23 | Open | Close | 04/29/23 | ||||
| Journeys Group | 1,135 |
22 |
27 |
1,130 |
10 |
25 |
1,115 |
|||
| Schuh Group | 123 |
4 |
5 |
122 |
1 |
0 |
123 |
|||
| Johnston & Murphy Group | 167 |
2 |
11 |
158 |
1 |
1 |
158 |
|||
| Total Retail Stores | 1,425 |
28 |
43 |
1,410 |
12 |
26 |
1,396 |
|||
| GENESCO INC. | ||
| Comparable Sales | ||
| Quarter 1 | ||
| Apr. 29, | Apr. 30, | |
2023 |
2022(1) |
|
| Journeys Group |
- |
NA |
| Schuh Group |
|
NA |
| Johnston & Murphy Group |
|
NA |
| Total Comparable Sales |
- |
NA |
| Same Store Sales |
- |
NA |
| Comparable Direct Sales |
|
- |
| (1) As a result of store closures in response to the COVID-19 pandemic during the first quarter of Fiscal 2022, and the Company's policy of removing any store closed for seven consecutive days from comparable sales, the Company did not include comparable sales for the first quarter of Fiscal 2023, except for comparable direct sales, as it felt that overall sales was a more meaningful metric last year. | ||
Schedule B |
|||||||||||||||||||
| Genesco Inc. | |||||||||||||||||||
| Adjustments to Reported Earnings (Loss) from Continuing Operations | |||||||||||||||||||
| Three Months Ended April 29, 2023 and April 30, 2022 | |||||||||||||||||||
| The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) 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 1 | Quarter 1 | ||||||||||||||||||
| April 29, 2023 | April 30, 2022 | ||||||||||||||||||
| Net of | Per Share | Net of | Per Share | ||||||||||||||||
| In Thousands (except per share amounts) | Pretax | Tax | Amounts | Pretax | Tax | Amounts | |||||||||||||
| Earnings (loss) from continuing operations, as reported | $ |
(18,875 |
) |
($ |
1.60 |
) |
$ |
4,969 |
|
$ |
0.37 |
|
|||||||
| Asset impairments and other adjustments: | |||||||||||||||||||
| Asset impairment charges | $ |
308 |
|
233 |
|
|
0.02 |
|
$ |
412 |
|
|
359 |
|
|
0.03 |
|
||
| Gain on pension termination |
|
- |
|
- |
|
|
0.00 |
|
|
(695 |
) |
|
(511 |
) |
|
(0.04 |
) |
||
| Expenses related to new HQ building |
|
- |
|
- |
|
|
0.00 |
|
|
1,526 |
|
|
1,122 |
|
|
0.08 |
|
||
| Total asset impairments and other adjustments | $ |
308 |
|
233 |
|
|
0.02 |
|
$ |
1,243 |
|
|
970 |
|
|
0.07 |
|
||
| Income tax expense adjustments: | |||||||||||||||||||
| Tax impact share based awards |
|
(47 |
) |
|
0.00 |
|
|
- |
|
|
0.00 |
|
|||||||
| Other tax items |
|
(55 |
) |
|
(0.01 |
) |
|
(3 |
) |
|
0.00 |
|
|||||||
| Total income tax expense adjustments |
|
(102 |
) |
|
(0.01 |
) |
|
(3 |
) |
|
0.00 |
|
|||||||
| Adjusted earnings (loss) from continuing operations (1) and (2) | $ |
(18,744 |
) |
($ |
1.59 |
) |
$ |
5,936 |
|
$ |
0.44 |
|
|||||||
| (1) The adjusted tax rate for the first quarter of Fiscal 2024 and 2023 is |
|||||||||||||||||||
| (2) EPS reflects 11.8 million and 13.4 million share count for the first quarter of Fiscal 2024 and 2023, respectively, which includes common stock equivalents in the first quarter last year but not in this year due to the loss from continuing operations. | |||||||||||||||||||
| Genesco Inc. | ||||||||||
| Adjustments to Reported Operating Income (Loss) and Selling and Administrative Expenses | ||||||||||
| Three Months Ended April 29, 2023 and April 30, 2022 | ||||||||||
| Quarter 1 - April 29, 2023 | ||||||||||
| Operating | Asset Impair | Adj Operating | ||||||||
| In Thousands | Income (Loss) | & Other Adj | Income (Loss) | |||||||
| Journeys Group | $ |
(18,362 |
) |
$ |
- |
|
$ |
(18,362 |
) |
|
| Schuh Group |
|
(1,790 |
) |
|
- |
|
|
(1,790 |
) |
|
| Johnston & Murphy Group |
|
4,806 |
|
|
- |
|
|
4,806 |
|
|
| Genesco Brands Group |
|
(32 |
) |
|
- |
|
|
(32 |
) |
|
| Corporate and Other |
|
(7,619 |
) |
|
308 |
|
|
(7,311 |
) |
|
| Total Operating Loss | $ |
(22,997 |
) |
$ |
308 |
|
$ |
(22,689 |
) |
|
| % of sales |
|
-4.8 |
% |
|
-4.7 |
% |
||||
| Quarter 1 - April 30, 2022 | ||||||||||
| Operating | Asset Impair | Adj Operating | ||||||||
| In Thousands | Income (Loss) | & Other Adj | Income (Loss) | |||||||
| Journeys Group | $ |
14,930 |
|
$ |
- |
|
$ |
14,930 |
|
|
| Schuh Group |
|
(2,746 |
) |
|
- |
|
|
(2,746 |
) |
|
| Johnston & Murphy Group |
|
550 |
|
|
- |
|
|
550 |
|
|
| Genesco Brands Group |
|
3,793 |
|
|
- |
|
|
3,793 |
|
|
| Corporate and Other |
|
(8,281 |
) |
|
1,243 |
|
|
(7,038 |
) |
|
| Total Operating Income | $ |
8,246 |
|
$ |
1,243 |
|
$ |
9,489 |
|
|
| % of sales |
|
1.6 |
% |
|
1.8 |
% |
||||
| Quarter 1 | ||||||||||
| In Thousands | April 29, 2023 | April 30, 2022 | ||||||||
| Selling and administrative expenses, as reported | $ |
251,497 |
|
$ |
243,481 |
|
||||
| Expenses related to new HQ building |
|
- |
|
|
(1,526 |
) |
||||
| Total adjustments |
|
- |
|
|
(1,526 |
) |
||||
| Adjusted selling and administrative expenses | $ |
251,497 |
|
$ |
241,955 |
|
||||
| % of sales |
|
52.0 |
% |
|
46.5 |
% |
||||
| 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 | $ |
29.0 |
$ |
2.42 |
$ |
22.7 |
$ |
1.89 |
|
| 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) | $ |
30.0 |
$ |
2.50 |
$ |
24.1 |
$ |
2.00 |
|
| (1) All adjustments are net of tax where applicable. The forecasted tax rate for Fiscal 2024 is approximately |
|||||||||
| (2) EPS reflects 12.0 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. | |||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230524005869/en/
Genesco Financial Contacts
Thomas A. George
(615) 367-7465
tgeorge@genesco.com
Darryl MacQuarrie
(615) 367-7672
dmacquarrie@genesco.com
Genesco Media Contact
Claire S. McCall
(615) 367-8283
cmccall@genesco.com
Source: Genesco Inc.
