Financial Performance Exceeds Expectations,
Driven by Journeys
Reaffirms Fiscal 2025 EPS Outlook
Genesco Inc. (NYSE: GCO) today reported second quarter results
for the three months ended August 3, 2024.
Second Quarter Fiscal 2025 Financial Summary
- Total net sales increased to $525 million; comparable sales
decreased 2%
- Comparable e-commerce sales increased 8%; comparable store
sales decreased 4%
- E-commerce sales represented 22% of retail sales compared to
21% last year
- GAAP EPS was ($0.91) and Non-GAAP EPS was ($0.83)1
- Inventory decreased 8% year-over-year
- Repurchased $9.3 million of stock with $42.8 million remaining
on the expanded share repurchase authorization announced in June
2023
- Increases fiscal 2025 sales and reaffirms EPS outlook
Mimi E. Vaughn, Genesco’s Board Chair, President and Chief
Executive Officer, said, “We delivered another quarter that
surpassed our top- and bottom-line expectations, as the improvement
in our Journeys business continues to gain traction. Armed with a
more elevated and diversified product assortment, Journeys
capitalized on the early Back-to-School demand, which drove a
positive inflection in comparable sales as the quarter progressed.
Thus far in the third quarter, Journeys’ store traffic and sales
trends have accelerated further, bolstering our confidence in the
product pipeline for the back half and the initiatives underway to
enhance the Journeys brand and experience for our consumers.”
Vaughn continued, “I am pleased with the momentum building at
Journeys and the progress we’re making to meet the evolving needs
of our consumers. That said, the operating environment remains
choppy, and our outlook reflects this, as well as a more
conservative near-term view for our other businesses. Looking
ahead, I feel confident that our strategic initiatives and efforts
to improve the efficiency of our operating model will enable us to
unlock our full earnings potential and create value for our
shareholders.”
__________________________
1
Excludes a gross margin charge related to
a distribution model transition in Genesco Brands Group, net of tax
effect, and charges for severance and asset impairments, net of tax
effect in the second quarter of Fiscal 2025 (“Excluded Items”). A
reconciliation of loss and loss per share from continuing
operations in accordance with U.S. Generally Accepted Accounting
Principles (“GAAP”) with the adjusted loss and loss per share
numbers is set forth on Schedule B to this press release. The
Company believes that disclosure of loss and loss 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.
Second Quarter Review
Net sales for the second quarter of Fiscal 2025 of $525 million
were up compared to $523 million in the second quarter of Fiscal
2024. The sales increase includes approximately $20 to $25 million
due to the move of a strong week of back-to-school sales from the
third quarter last year to the second quarter this year related to
the 53-week calendar shift along with an 8% increase in e-commerce
comparable sales, partially offset by a decline in store sales, the
impact of net store closings and decreased wholesale sales.
Comparable Sales
Comparable Same Store and E-commerce
Sales:
2QFY25
2QFY24
Journeys Group
(1)%
(11)%
Schuh Group
(2)%
17%
Johnston & Murphy Group
(5)%
12%
Total Genesco Comparable Sales
(2)%
(2)%
Same Store Sales
(4)%
(6)%
Comparable E-commerce Sales
8%
14%
The overall sales increase for the second quarter of Fiscal 2025
compared to the second quarter of Fiscal 2024 was driven by an
increase of 4% at Journeys and an increase of 1% at Schuh,
partially offset by a decrease of 9% at Johnston & Murphy and a
13% or $4 million decrease at Genesco Brands. On a constant
currency basis, Schuh sales were also up 1% for the second quarter
this year.
Second quarter gross margin this year was 46.8% compared with
47.7% last year. Adjusted gross margin for the second quarter this
year decreased 90 basis points as a percentage of sales compared to
last year. The decrease as a percentage of sales compared to Fiscal
2024 is due primarily to a higher mix of sale product at Schuh and
changes in product mix at Journeys.
Selling and administrative expense for the second quarter this
year decreased 100 basis points as a percentage of sales to 48.6%
compared to 49.6% last year. The decrease as a percentage of sales
compared to Fiscal 2024 reflects a decrease in occupancy expense, a
favorable change in certain non-income taxes, decreased royalty
expense and decreased performance-based compensation expense,
partially offset by increased selling salaries and depreciation
expense.
Genesco’s GAAP operating loss for the second quarter was $10.3
million, or 2.0% of sales this year, compared with $38.6 million,
or 7.4% of sales in the second quarter last year. Adjusted for the
Excluded Items in all periods, the operating loss for the second
quarter was $9.3 million this year compared to $10.0 million last
year. Adjusted operating margin was a loss of 1.8% of sales in the
second quarter of Fiscal 2025 compared to a loss of 1.9% in the
second quarter last year.
The effective tax rate for the quarter was 15.2% in Fiscal 2025
compared to 23.1% in the second quarter last year. The adjusted tax
rate, reflecting Excluded Items, was 15.1% in Fiscal 2025 compared
to 23.4% in the second quarter last year. The lower adjusted tax
rate for the second quarter this year compared to the second
quarter last year reflects a reduction in the tax benefit recorded
year to date due to lower projected earnings and taxes from our
foreign jurisdictions.
GAAP loss from continuing operations was $9.9 million in the
second quarter of Fiscal 2025 compared to $31.6 million in the
second quarter last year. Adjusted for the Excluded Items in all
periods, the second quarter loss from continuing operations was
$9.1 million, or $0.83 per share, in Fiscal 2025, compared to $9.6
million, or $0.85 per share, in the second quarter last year.
Cash, Borrowings and Inventory Cash as of August 3, 2024,
was $45.9 million, compared with $37.4 million as of July 29, 2023.
Total debt at the end of the second quarter of Fiscal 2025 was
$77.8 million compared with $131.5 million at the end of last
year’s second quarter. Inventories decreased 8% on a year-over-year
basis, reflecting decreased inventory for Journeys, Schuh and
Johnston & Murphy, partially offset by an increase at Genesco
Brands.
Capital Expenditures and Store Activity For the second
quarter this year, capital expenditures were $8 million, related
primarily to retail stores and digital and omnichannel initiatives.
Depreciation and amortization was $13 million. During the quarter,
the Company opened five stores and closed 12 stores. The Company
ended the quarter with 1,314 stores compared with 1,375 stores at
the end of the second quarter last year, or a decrease of 4%.
Square footage was down 3% on a year-over-year basis.
Share Repurchases The Company repurchased 381,711 shares
during the second quarter of Fiscal 2025 for $9.3 million, or
$24.49 per share. The Company currently has $42.8 million remaining
on its expanded share repurchase authorization announced in June
2023.
Store Closing and Cost Savings Update
- The Company closed 12 Journeys stores in the second quarter of
Fiscal 2025 (for a total of 29 Journeys stores closed to date in
Fiscal 2025) and continues to evaluate up to 50 Journeys store
closures in Fiscal 2025
- The Company's cost savings program remains on track to achieve
a reduction in the annualized run rate of $45 to $50 million by the
end of Fiscal 2025
Fiscal 2025 Outlook For Fiscal 2025, the Company:
- Now expects total sales to decrease 1% to 2% compared to Fiscal
2024, or flat to down 1% excluding the 53rd week in Fiscal 2024
versus prior expectations for a total sales decrease of 2% to 3%,
or down 1% to 2% excluding the 53rd week in Fiscal 2024
- Continues to expect adjusted diluted earnings per share from
continuing operations in the range of $0.60 to $1.00 2
- Guidance assumes no further share repurchases and a tax rate of
27%
__________________________
2
A 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 second
quarter results on its website, www.genesco.com, in the investor
relations section. The Company's live conference call on September
6, 2024, 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, operating income, gross margins, expenses, capital
expenditures, depreciation and amortization, tax rates, store
openings and closures, cost reductions, 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,”
“should,” “believe,” “anticipate,” “optimistic,” “confident” 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, including shipping disruptions
in the Red Sea; unfavorable trends in fuel costs, foreign exchange
rates, foreign labor and material costs, and other factors
affecting the cost of products; our ability to renew our license
agreements; 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 secure allocations to refine product assortments to address
consumer demand; the ability to renew leases in existing stores and
control or lower occupancy costs, to open or close stores in the
number and on the planned schedule, 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, environmental matters and other disputes 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. (NYSE: GCO) is a footwear
focused company with distinctively positioned retail and lifestyle
brands and proven omnichannel capabilities offering customers the
footwear they desire in engaging shopping environments, including
approximately 1,314 retail stores and branded e-commerce websites.
Its Journeys, Little Burgundy and Schuh brands serve teens, kids
and young adults with on-trend fashion footwear inspired by youth
culture in the U.S., Canada and the U.K. Johnston & Murphy
serves the successful, affluent man and woman with premium
footwear, apparel and accessories in the U.S. and Canada, and
Genesco Brands Group sells branded lifestyle footwear to leading
retailers under licensed brands including Levi’s, Dockers and G.H.
Bass. Founded in 1924, Genesco is based in Nashville, Tennessee.
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 2
Quarter 2
Aug. 3,
% of
July 29,
% of
2024
Net Sales
2023
Net Sales
Net sales
$
525,188
100.0
%
$
523,027
100.0
%
Cost of sales
279,549
53.2
%
273,507
52.3
%
Gross margin(1)
245,639
46.8
%
249,520
47.7
%
Selling and administrative expenses
255,135
48.6
%
259,520
49.6
%
Goodwill impairment
-
0.0
%
28,453
5.4
%
Asset impairments and other, net(2)
778
0.1
%
174
0.0
%
Operating loss
(10,274
)
-2.0
%
(38,627
)
-7.4
%
Other components of net periodic benefit cost
86
0.0
%
148
0.0
%
Interest expense, net
1,345
0.3
%
2,383
0.5
%
Loss from continuing operations before income taxes
(11,705
)
-2.2
%
(41,158
)
-7.9
%
Income tax benefit
(1,776
)
-0.3
%
(9,526
)
-1.8
%
Loss from continuing operations
(9,929
)
-1.9
%
(31,632
)
-6.0
%
Loss from discontinued operations, net of tax
(63
)
0.0
%
(33
)
0.0
%
Net Loss
$
(9,992
)
-1.9
%
$
(31,665
)
-6.1
%
Basic loss per share: Before discontinued operations
$
(0.91
)
$
(2.79
)
Net loss
$
(0.91
)
$
(2.79
)
Diluted loss per share: Before discontinued operations
$
(0.91
)
$
(2.79
)
Net loss
$
(0.91
)
$
(2.79
)
Weighted-average shares outstanding: Basic
10,942
11,344
Diluted
10,942
11,344
(1) Includes a $0.2 million gross margin charge in the second
quarter of Fiscal 2025 related to a distribution model transition
in Genesco Brands Group. (2) Includes a $0.8 million charge in the
second quarter of Fiscal 2025 which includes $0.7 million for
severance and $0.1 million for asset impairments. Includes a $0.2
million charge in the second quarter of Fiscal 2024 for asset
impairments.
GENESCO INC.
Condensed Consolidated
Statements of Operations
(in thousands, except per
share data)
(Unaudited)
Six Months Ended
Six Months Ended
Aug. 3,
% of
July 29,
% of
2024
Net Sales
2023
Net Sales
Net sales
$
982,785
100.0
%
$
1,006,359
100.0
%
Cost of sales
520,865
53.0
%
528,031
52.5
%
Gross margin(1)
461,920
47.0
%
478,328
47.5
%
Selling and administrative expenses
502,966
51.2
%
511,017
50.8
%
Goodwill impairment
-
0.0
%
28,453
2.8
%
Asset impairments and other, net(2)
1,356
0.1
%
482
0.0
%
Operating loss
(42,402
)
-4.3
%
(61,624
)
-6.1
%
Other components of net periodic benefit cost
195
0.0
%
240
0.0
%
Interest expense, net
2,235
0.2
%
4,034
0.4
%
Loss from continuing operations before income taxes
(44,832
)
-4.6
%
(65,898
)
-6.5
%
Income tax benefit
(10,615
)
-1.1
%
(15,391
)
-1.5
%
Loss from continuing operations
(34,217
)
-3.5
%
(50,507
)
-5.0
%
Loss from discontinued operations, net of tax
(122
)
0.0
%
(48
)
0.0
%
Net Loss
$
(34,339
)
-3.5
%
$
(50,555
)
-5.0
%
Basic loss per share: Before discontinued operations
$
(3.13
)
$
(4.36
)
Net loss
$
(3.14
)
$
(4.37
)
Diluted loss per share: Before discontinued operations
$
(3.13
)
$
(4.36
)
Net loss
$
(3.14
)
$
(4.37
)
Weighted-average shares outstanding: Basic
10,936
11,581
Diluted
10,936
11,581
(1) Includes a $1.8 million gross margin charge in the first six
months of Fiscal 2025 related to a distribution model transition in
Genesco Brands Group. (2) Includes a $1.4 million charge in the
first six months of Fiscal 2024 which includes $1.0 million for
severance and $0.4 million for asset impairments. Includes a $0.5
million charge in the first six months of Fiscal 2024 for asset
impairments.
GENESCO INC.
Sales/Earnings Summary by
Segment
(in thousands)
(Unaudited)
Quarter 2
Quarter 2
Aug. 3,
% of
July 29,
% of
2024
Net Sales
2023
Net Sales
Sales: Journeys Group
$
298,846
56.9
%
$
287,275
54.9
%
Schuh Group
124,561
23.7
%
122,799
23.5
%
Johnston & Murphy Group
71,037
13.5
%
77,785
14.9
%
Genesco Brands Group
30,744
5.9
%
35,168
6.7
%
Net Sales
$
525,188
100.0
%
$
523,027
100.0
%
Operating Income (Loss): Journeys Group
$
(11,151
)
-3.7
%
$
(14,878
)
-5.2
%
Schuh Group
7,339
5.9
%
8,416
6.9
%
Johnston & Murphy Group
(403
)
-0.6
%
2,666
3.4
%
Genesco Brands Group(1)
2,672
8.7
%
1,851
5.3
%
Corporate and Other(2)
(8,731
)
-1.7
%
(8,229
)
-1.6
%
Goodwill Impairment
-
0.0
%
(28,453
)
-5.4
%
Operating loss
(10,274
)
-2.0
%
(38,627
)
-7.4
%
Other components of net periodic benefit cost
86
0.0
%
148
0.0
%
Interest, net
1,345
0.3
%
2,383
0.5
%
Loss from continuing operations before income taxes
(11,705
)
-2.2
%
(41,158
)
-7.9
%
Income tax benefit
(1,776
)
-0.3
%
(9,526
)
-1.8
%
Loss from continuing operations
(9,929
)
-1.9
%
(31,632
)
-6.0
%
Loss from discontinued operations, net of tax
(63
)
0.0
%
(33
)
0.0
%
Net Loss
$
(9,992
)
-1.9
%
$
(31,665
)
-6.1
%
(1) Includes a $0.2 million gross margin charge in the second
quarter of Fiscal 2025 related to a distribution model transition
in Genesco Brands Group. (2) Includes a $0.8 million charge in the
second quarter of Fiscal 2025 which includes $0.7 million for
severance and $0.1 million for asset impairments. Includes a $0.2
million charge in the second quarter of Fiscal 2024 for asset
impairments.
GENESCO INC.
Sales/Earnings Summary by
Segment
(in thousands)
(Unaudited)
Six Months Ended
Six Months Ended
Aug. 3,
% of
July 29,
% of
2024
Net Sales
2023
Net Sales
Sales: Journeys Group
$
558,291
56.8
%
$
559,465
55.6
%
Schuh Group
216,910
22.1
%
215,904
21.5
%
Johnston & Murphy Group
150,244
15.3
%
160,412
15.9
%
Genesco Brands Group
57,340
5.8
%
70,578
7.0
%
Net Sales
$
982,785
100.0
%
$
1,006,359
100.0
%
Operating Income (Loss): Journeys Group
$
(29,973
)
-5.4
%
$
(33,240
)
-5.9
%
Schuh Group
1,443
0.7
%
6,626
3.1
%
Johnston & Murphy Group
1,952
1.3
%
7,472
4.7
%
Genesco Brands Group(1)
1,686
2.9
%
1,819
2.6
%
Corporate and Other(2)
(17,510
)
-1.8
%
(15,848
)
-1.6
%
Goodwill Impairment
-
0.0
%
(28,453
)
-2.8
%
Operating loss
(42,402
)
-4.3
%
(61,624
)
-6.1
%
Other components of net periodic benefit cost
195
0.0
%
240
0.0
%
Interest, net
2,235
0.2
%
4,034
0.4
%
Loss from continuing operations before income taxes
(44,832
)
-4.6
%
(65,898
)
-6.5
%
Income tax benefit
(10,615
)
-1.1
%
(15,391
)
-1.5
%
Loss from continuing operations
(34,217
)
-3.5
%
(50,507
)
-5.0
%
Loss from discontinued operations, net of tax
(122
)
0.0
%
(48
)
0.0
%
Net Loss
$
(34,339
)
-3.5
%
$
(50,555
)
-5.0
%
(1) Includes a $1.8 million gross margin charge in the first six
months of Fiscal 2025 related to a distribution model transition in
Genesco Brands Group. (2) Includes a $1.4 million charge in the
first six months of Fiscal 2024 which includes $1.0 million for
severance and $0.4 million for asset impairments. Includes a $0.5
million charge in the first six months of Fiscal 2024 for asset
impairments.
GENESCO INC.
Condensed Consolidated Balance
Sheets
(in thousands)
(Unaudited)
Aug. 3, 2024
July 29, 2023
Assets Cash
$
45,855
$
37,416
Accounts receivable
57,497
50,351
Inventories
450,187
491,118
Other current assets
53,181
45,983
Total current assets
606,720
624,868
Property and equipment
229,116
244,090
Operating lease right of use assets
402,715
476,715
Goodwill and other intangibles
36,446
37,669
Non-current prepaid income taxes
58,051
55,028
Other non-current assets
50,703
56,389
Total Assets
$
1,383,751
$
1,494,759
Liabilities and Equity Accounts payable
$
187,439
$
166,504
Current portion operating lease liabilities
122,527
137,369
Other current liabilities
85,697
78,707
Total current liabilities
395,663
382,580
Long-term debt
77,839
131,544
Long-term operating lease liabilities
329,773
403,413
Other long-term liabilities
47,854
44,203
Equity
532,622
533,019
Total Liabilities and Equity
$
1,383,751
$
1,494,759
GENESCO INC.
Store Count Activity
Balance
Balance
Balance
01/28/23
Open
Close
02/03/24
Open
Close
08/03/24
Journeys Group
1,130
27
94
1,063
5
29
1,039
Schuh Group
122
3
3
122
1
0
123
Johnston & Murphy Group
158
2
4
156
0
4
152
Total Retail Stores
1,410
32
101
1,341
6
33
1,314
GENESCO INC.
Store Count Activity
Balance
Balance
05/04/24
Open
Close
08/03/24
Journeys Group
1,047
4
12
1,039
Schuh Group
122
1
0
123
Johnston & Murphy Group
152
0
0
152
Total Retail Stores
1,321
5
12
1,314
GENESCO INC.
Comparable Sales
Quarter 2
Six Months
Aug. 3,
July 29,
Aug. 3,
July 29,
2024
2023
2024
2023
Journeys Group
-1
%
-11
%
-3
%
-12
%
Schuh Group
-2
%
17
%
-4
%
15
%
Johnston & Murphy Group
-5
%
12
%
-4
%
15
%
Total Comparable Sales
-2
%
-2
%
-3
%
-4
%
Same Store Sales
-4
%
-6
%
-6
%
-7
%
Comparable E-commerce Sales
8
%
14
%
6
%
11
%
Schedule B Genesco Inc. Adjustments to
Reported Loss from Continuing Operations Three Months Ended August
3, 2024 and July 29, 2023 The Company believes that
disclosure of loss and loss per share from continuing operations
and operating 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 2
Quarter 2
August 3,
2024
July 29, 2023
Net of
Per Share
Net of
Per Share
In Thousands (except per share amounts)
Pretax
Tax
Amounts
Pretax
Tax
Amounts
Loss from continuing operations, as reported
$
(9,929
)
($
0.91
)
$
(31,632
)
($
2.79
)
Gross
margin adjustment:
Charges related to distribution model
transition
$
169
176
0.02
$
-
-
0.00
Asset
impairments and other adjustments:
Asset impairment charges
$
116
95
0.01
$
174
134
0.01
Severance
662
512
0.05
-
-
0.00
Goodwill impairment
-
-
0.00
28,453
21,858
1.93
Total asset impairments and other adjustments
$
778
607
0.06
$
28,627
21,992
1.94
Income tax
expense adjustments:
Tax impact share based awards
592
0.05
1,058
0.09
Other tax items
(577
)
(0.05
)
(1,014
)
(0.09
)
Total income tax expense adjustments
15
0.00
44
0.00
Adjusted
loss from continuing operations (1) and (2)
$
(9,131
)
($
0.83
)
$
(9,596
)
($
0.85
)
(1) The adjusted tax rate for the second quarter of Fiscal
2025 and 2024 is 15.1% and 23.4%, respectively. (2)
EPS reflects 10.9 million and 11.3 million share count for the
second quarter of Fiscal 2025 and 2024, respectively, which
excludes common stock equivalents in the second quarter of each
year due to the loss from continuing operations.
Genesco Inc.
Adjustments to Reported Operating
Income (Loss) and Gross Margin
Three Months Ended August 3, 2024
and July 29, 2023
Quarter 2 - August 3,
2024
Operating
Asset
Impair
Adj Operating
In Thousands
Income
(Loss)
& Other Adj
Income
(Loss)
Journeys Group
$
(11,151
)
$
-
$
(11,151
)
Schuh Group
7,339
-
7,339
Johnston & Murphy Group
(403
)
-
(403
)
Genesco Brands Group
2,672
169
2,841
Corporate and Other
(8,731
)
778
(7,953
)
Total Operating Loss
$
(10,274
)
$
947
$
(9,327
)
% of sales
-2.0
%
-1.8
%
Quarter 2 - July 29, 2023
Operating Asset Impair Adj Operating In
Thousands Income (Loss) & Other Adj
Income (Loss) Journeys Group
$
(14,878
)
$
-
$
(14,878
)
Schuh Group
8,416
-
8,416
Johnston & Murphy Group
2,666
-
2,666
Genesco Brands Group
1,851
-
1,851
Goodwill Impairment
(28,453
)
28,453
-
Corporate and Other
(8,229
)
174
(8,055
)
Total Operating Loss
$
(38,627
)
$
28,627
$
(10,000
)
% of sales
-7.4
%
-1.9
%
Quarter 2 In Thousands
Aug. 3,
2024 July 29, 2023 Gross margin, as reported
$
245,639
$
249,520
% of sales
46.8
%
47.7
%
Charges related to distribution model
transition
169
-
Total adjustments
169
-
Adjusted gross margin
$
245,808
$
249,520
% of sales
46.8
%
47.7
%
Schedule B Genesco Inc. Adjustments to
Reported Loss from Continuing Operations Six Months Ended August 3,
2024 and July 29, 2023 The Company believes that disclosure
of loss and loss per share from continuing operations and operating
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.
Six Months Six Months
August 3,
2024 July 29, 2023
Net of Per
Share Net of Per Share In Thousands (except
per share amounts)
Pretax Tax
Amounts Pretax Tax
Amounts Loss from continuing operations, as reported
$
(34,217
)
($
3.13
)
$
(50,507
)
($
4.36
)
Gross
margin adjustment:
Charges related to distribution model
transition
$
1,750
1,327
0.12
$
-
-
0.00
Asset
impairments and other adjustments:
Asset impairment charges
$
360
273
0.02
$
482
367
0.03
Severance
996
755
0.07
-
-
0.00
Goodwill impairment
-
-
0.00
28,453
21,858
1.89
Total asset impairments and other adjustments
$
1,356
1,028
0.09
$
28,935
22,225
1.92
Income tax
expense adjustments:
Tax impact share based awards
722
0.07
1,011
0.09
Other tax items
(922
)
(0.08
)
(1,069
)
(0.10
)
Total income tax expense adjustments
(200
)
(0.01
)
(58
)
(0.01
)
Adjusted
loss from continuing operations (1) and (2)
$
(32,062
)
($
2.93
)
$
(28,340
)
($
2.45
)
(1) The adjusted tax rate for the first six months of Fiscal
2025 and 2024 is 23.2% and 23.3%, respectively. (2)
EPS reflects 10.9 million and 11.6 million share count for the
first six months of Fiscal 2025 and 2024, respectively, which
excludes common stock equivalents in the first six months of each
period due to the loss from continuing operations each year.
Genesco Inc.
Adjustments to Reported Operating
Income (Loss) and Gross Margin
Six Months Ended August 3, 2024
and July 29, 2023
Six Months August 3,
2024
Operating
Asset
Impair
Adj Operating
In Thousands
Income
(Loss)
& Other Adj
Income
(Loss)
Journeys Group
$
(29,973
)
$
-
$
(29,973
)
Schuh Group
1,443
-
1,443
Johnston & Murphy Group
1,952
-
1,952
Genesco Brands Group
1,686
1,750
3,436
Corporate and Other
(17,510
)
1,356
(16,154
)
Total Operating Loss
$
(42,402
)
$
3,106
$
(39,296
)
% of sales
-4.3
%
-4.0
%
Six Months July 29,
2023
Operating
Asset Impair
Adj Operating
In Thousands
Income (Loss)
& Other Adj
Income (Loss)
Journeys Group
$
(33,240
)
$
-
$
(33,240
)
Schuh Group
6,626
-
6,626
Johnston & Murphy Group
7,472
-
7,472
Genesco Brands Group
1,819
-
1,819
Goodwill Impairment
(28,453
)
28,453
-
Corporate and Other
(15,848
)
482
(15,366
)
Total Operating Loss
$
(61,624
)
$
28,935
$
(32,689
)
% of sales
-6.1
%
-3.2
%
Six Months
In Thousands
Aug. 3,
2024
July 29, 2023
Gross margin, as reported
$
461,920
$
478,328
% of sales
47.0
%
47.5
%
Charges related to distribution model
transition
1,750
-
Total adjustments
1,750
-
Adjusted gross margin
$
463,670
$
478,328
% of sales
47.2
%
47.5
%
Schedule B
Genesco Inc.
Adjustments to Forecasted
Earnings from Continuing Operations
Fiscal Year Ending February 1,
2025
In millions (except per share amounts)
High Guidance
Low Guidance
Fiscal 2025
Fiscal 2025
Net of Tax
Per Share
Net of Tax
Per Share
Forecasted earnings from continuing operations
$
8.2
$
0.75
$
3.5
$
0.32
Charges related to distribution model
transition
1.3
0.12
1.3
0.12
Asset impairments and other adjustments:
Asset impairments and other matters
1.4
0.13
1.8
0.16
Total asset impairments and other adjustments (1)
1.4
0.13
1.8
0.16
Adjusted forecasted earnings from continuing
operations (2)
$
10.9
$
1.00
$
6.6
$
0.60
(1) All adjustments are net of tax where
applicable. The forecasted tax rate for Fiscal 2025 is
approximately 27%. (2) EPS reflects 11.0 million share count
for Fiscal 2025 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/20240905936347/en/
Genesco Financial Contact
Thomas A. George (615) 367-7465 tgeorge@genesco.com
Genesco Media Contact Claire
S. McCall (615) 367-8283 cmccall@genesco.com
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