Genesco (GCO) Misses Q2 EPS by 2c, Miss on Revenues; Lowers FY18 EPS Guidance Below Consensus

Genesco (NYSE: GCO) reported Q2 EPS of ($0.10), $0.02 worse than the analyst estimate of ($0.08). Revenue for the quarter came in at $617 million versus the consensus estimate of $626.89 million.

"The positive sales trends we experienced at Journeys and Schuh during the second quarter accelerated nicely during August in the important back-to-school selling period, and we believe that both businesses are in stronger merchandise positions heading into the holiday season compared with a year ago. Unfortunately, current trends at Lids continue to run well below our expectations which will make it more difficult to lap the tough comparisons we face beginning in October from last year\'s Cubs World Series win. In addition, we have adopted a more conservative outlook for store-based sales given the anemic level of mall traffic year-to-date and the more pronounced shift in consumer spending away from stores to online. Therefore, we now expect adjusted diluted earnings per share for the year in the range of $3.35 to $3.65, compared to our previously issued guidance range of $3.90 to $4.05, a wider range than usual given some of the opportunities and challenges in our business." These expectations do not include expected non-cash asset impairments and other charges, estimated in the range of $4.7 million to $5.8 million pretax, or $0.16 to $0.20 per share after tax, for the full fiscal year. They also do not include certain tax effects related to equity grants pursuant to the newly effective ASU 2016-09, estimated at $0.11 per share after tax. This guidance assumes comparable sales in the range of -1% to 1% for the full year. A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.

Dennis concluded, "While we are disappointed with our reduced outlook, we believe we have established new ranges for sales and earnings that better reflect the current operating environment. I believe that our approach to managing the business strikes the right balance between protecting near-term profitability and executing our long range plans, and we expect our concepts to emerge from the ongoing retail transformation in even stronger strategic positions."

GUIDANCE:

Genesco sees FY2018 EPS of $3.35-$3.65, versus the consensus of $3.73.

For earnings history and earnings-related data on Genesco (GCO) click here.

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