Genesco delivered third-quarter earnings that beat analyst expectations, but the retailer lowered its full-year outlook.
Genesco, which operates Lids and Journeys and sells wholesale footwear under the Johnston & Murphy brand, reported earnings per share of $1.40, which topped the FactSet estimate of $1.30. Net sales for the third quarter were $774 million, 2 percent better than the estimate of $759 million.
Net earnings for the third quarter were $32 million, better than last year’s $28 million for the same time period. Comparable sales increased 7 percent with a jump of 12 percent from the Lids Sports Group and a 6 percent increase from The Journeys Group.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “We are very pleased with the comparable-sales increase we delivered in the third quarter. Our results were driven by strong full-price selling combined with higher promotional activity in line with our strategy to right-size the Lids Sports Group’s inventory levels.”
Dennis said that the fourth quarter started slowly, but accelerated over the Black Friday weekend and that fourth quarter comp sales were up 6 percent through December 1.
But the promotional nature of the holiday season this year pushed the company to reduce its full-year outlook. Genesco now expects diluted earnings per share to be in the range of $4.50 to $4.60, lower than the previously issued guidance of $4.70 to $4.80.
Dennis said, “While we are disappointed with our reduced outlook, we believe that the steps we are taking now will allow the company to realize greater earnings power next year and beyond.”
Gensco stock has fallen 31 percent year-to-date to trade lately near $52.24.