Journeys Underperformance Hampered Genesco (GCO) in Q2; Piper Affirms at 'Neutral'

September 1, 2016 7:55 AM EDT
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Price: $61.40 +0.66%

Rating Summary:
    3 Buy, 11 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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Piper Jaffray reaffirms its Neutral rating and $62 price target on Genesco (NYSE: GCO) after the company posted Q2 results and lowered FY17 outlook.

Analyst Erinn Murphy commented today, While EPS was in line with our estimate at $0.34 (albeit ahead of the Street), sales underwhelmed during the quarter. Q2 sales were $626M--below the Street's $642M and our $636M estimate. Q2 comps were down 1% vs. the 1+% QTD trend through May 21st. That said, Journeys underperformed at -4%. Comps at Lids were flat, down 1% at Schuh and up 3% at J&M. QTD trends have started off slow with comps down 5% tied to softness in the UK as well as a fashion shift impacting Journeys.

We hope to glean more about the latter driver and the company's ability to fuel key trends from vendors in the Holiday season. With trends starting off soft during BTS, mgmt. lowered its FY17 guidance from $4.80 - $4.90 to $3.80 - $4.00. This compares to our already below-the-Street estimate of $4.70.

For an analyst ratings summary and ratings history on Genesco click here. For more ratings news on Genesco click here.

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