Genesco (NYSE: GCO) reported Q3 EPS of $1.28, $1.19 better than the analyst estimate of $0.09. Revenue for the quarter came in at $711 million versus the consensus estimate of $716.89 million.

Net sales for the third quarter of Fiscal 2017 decreased 8% to $711 million from $774 million in the third quarter of Fiscal 2016, reflecting the sale of the Lids Team Sports business in the fourth quarter of last year and a decrease of approximately 3% in sales from businesses operated during both periods. Consolidated third quarter 2017 comparable sales, including same store sales and comparable e-commerce and catalog sales, decreased 3%, with an 8% decrease in the Journeys Group, a 2% increase in the Lids Sports Group, flat comparable sales in the Schuh Group, and a 1% increase in the Johnston & Murphy Group. Comparable sales for the Company reflected a 4% decrease in same store sales and a 7% increase in e-commerce sales.

GUIDANCE:

Genesco sees FY2017 EPS of $3.80-$4.00, versus the consensus of $3.91.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, "Consolidated comparable sales for the third quarter came in ahead of our expectations, thanks to better than expected sales at the Lids Sports Group and Schuh Group. Our top-line performance, effective management of selling costs, and share repurchases made during the quarter allowed us to deliver earnings per share ahead of expectations. We were able to offset some of the bottom line pressure caused by negative expense leverage on lower sales versus last year through gross margin expansion, primarily a significant increase in the Lids Sports Group.

"Fourth quarter consolidated comparable sales were -2% through November 29, 2016. The strong positive impact of the World Series on the Lids Sports Group's sales has offset weaker comps in the rest of our businesses so far during the quarter. While we expect the Cubs' victory to continue to drive sales through the balance of the quarter, it will have less impact than the gains immediately following the Series.

"Our outlook going forward takes into account the better than expected third quarter performance and positive effect of the World Series win. This is offset, primarily by expectations for a more challenging fourth quarter at Journeys due to unseasonably warmer weather that has hurt sales and the continued impact of the fashion shift that began to affect Journeys' sales in the second quarter. Thus, we are reiterating expectations for adjusted diluted earnings per share for the fiscal year ending January 28, 2017, in the range of $3.80 to $4.00." Consistent with previous guidance, these expectations do not include expected non-cash asset impairments and other charges, net of the gain on a litigation settlement and gain on the sale of Lids Team Sports, estimated in the range of a $1.8 million pretax gain to a $0.8 million pretax charge, or $(0.06) to $0.03 per share after tax, for the full fiscal year. This guidance assumes a comparable sales decrease in the 2% to 3% range 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 the headwinds for Journeys are likely to continue in the near term, we have made purchase commitments for spring product that reflect the shift in fashion, which we believe should reverse the negative trend. Beyond that, we remain confident in the strategic positioning of all our retail businesses and believe that the Company's long-term competitive advantages will drive improved profitability and greater shareholder value."

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