Genesco (GCO) Tops Q2 EPS by 7c, Revenues Beat; Offers FY19 EPS Outlook

Genesco (NYSE: GCO) reported Q2 EPS of $0.04, $0.07 better than the analyst estimate of ($0.03). Revenue for the quarter came in at $654 million versus the consensus estimate of $641.07 million.

• Net sales increased 6% to $654 million
• Comparable sales increased 3%
• GAAP EPS from continuing operations was $0.01
• Non-GAAP EPS from continuing operations was $0.04

"Our second quarter performance was highlighted by our strongest quarterly comparable sales increase in more than two years. Sales trends at Journeys and Johnston & Murphy accelerated compared with solid first quarter results driven by positive store comps at both businesses, leading to our first overall positive store comp in eight quarters. This positive store comp allowed us to leverage expenses, which along with the move of an important back-to-school sales week into the second quarter due to the calendar shift, led to a significant improvement in overall profitability versus the prior year period. Comparable sales at the Lids Sports Group remained negative, although trends once again improved on a sequential basis. Similarly, Schuh's comp result was meaningfully better versus the first quarter, however, it was still negative as several factors in the U.K. combined to create a challenging selling environment during the second quarter.

"The third quarter so far has seen an acceleration in comparable sales over the second quarter driven by the continued strength of our U.S. footwear businesses during the heart of the important back-to-school season. We are encouraged by the momentum at Journeys and Johnston & Murphy but remain cautious in our outlook for Lids and Schuh over the remainder of the fiscal year due to the lack of visibility into improving trends. Longer-term, we continue to believe that the work we are doing to transform our operating model in response to changing consumer behavior and the evolving retail environment will lead to enhanced profitability and greater shareholder value."

GUIDANCE:

Genesco sees FY2019 EPS of $3.05-$3.45, versus the consensus of $3.20.

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

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