Genesco Reports Increased Fourth Quarter and Fiscal 2002 Sales and Earnings
The unusual items in the fourth quarter of fiscal 2002 include charges and provisions primarily related to previously announced plans to close a manufacturing plant and reduce operating expenses as well as a reduction in the tax provision. The unusual items in the previous year were related to the cancellation of a footwear license by the Company. Including the unusual items in both quarters, earnings before discontinued operations were $15.8 million or $0.61 per diluted share in the fourth quarter of fiscal 2002, compared to $12.3 million or $0.49 per share in the same period the year before. Net sales for the fourth quarter of fiscal 2002 increased 4% to $223 million compared to $214 million for the fourth quarter of fiscal 2001.
For the year ended February 2, 2002, earnings before discontinued operations, excluding the unusual items, were $38.0 million or $1.52 per diluted share, up from $35.6 million or $1.45 per share for the previous year. Earnings before discontinued operations, including the unusual items, rose to $38.3 million or $1.54 per diluted share in fiscal 2002 from $32.8 million or $1.35 per share in fiscal 2001. Net sales for fiscal 2002 increased 10% to $747 million from $680 million the previous year.
Genesco Chairman and Chief Executive Officer Ben T. Harris, said, "We were pleased to report fourth quarter results at the high end of our previous range of guidance and above the First Call earnings consensus estimate of $0.58. This solid momentum continues into the first quarter and we remain encouraged about our prospects for this year and beyond.
"The strength of our business and the resolve of our management team were highly evident during fiscal 2002, as we achieved solid results in a year marked by unprecedented events. We grew total sales to $747 million and registered a 1% same store sales gain during the year, while opening 153 new stores and ending fiscal 2002 with 908 stores. We also took a number of decisive actions to improve our businesses and streamline operations.
"Journeys net sales increased 18% during the quarter and same store sales rose 3%. Journeys net sales for the year increased 27% to $382 million and same store sales rose 6%. We opened 19 Journeys stores during the quarter and 97 stores for the full year and ended fiscal 2002 with 519 stores in operation. Journeys remains the leading, mall-based footwear retailer for teenagers and young adults and we expect to double our store count in the next several years."
Harris continued, "The Jarman Group's performance for the quarter began to reflect its progress through the year and the positive impact of the new management team on that business. Overall sales increased 5% in the fourth quarter to $43 million and total same store sales fell 2%, continuing the sequential quarter over quarter improvements under the new management team, and ending the year with a same store sales gain of 14% in January. For the year, the Jarman Group's total sales increased 10% to $120 million and same store sales fell 4%. We are confident that we now have the right products in the stores and the right team to execute a successful business strategy.
"Johnston & Murphy's net sales were $42 million for quarter. Same store sales were down 4%, compared to a 16% decline in the third quarter. Net sales for the brand were $168 million and same store sales fell 9% for the full year. Johnston & Murphy's inventories were down 10% at year end, reflecting the management team's determination to start the new year with an improved inventory position. Given the strength of the brand and our confidence in the new Johnston & Murphy management team we announced last quarter, we expect to see improvement in this business this year.
"Dockers sales were flat for the quarter at $14 million, and increased 13% for the year to $71 million. Although the environment remains somewhat challenging, Dockers is well positioned in the market and it continues to make meaningful inroads in department stores and national footwear chains."
Harris concluded, "We feel good about our business as we enter the new year and expect fiscal 2003 sales to grow at 10% to 15% and earnings per share to grow at 5% to 10%. As we have said in the past, it is our diverse mix of businesses, our lifestyle focus and our management disciplines that combine to give Genesco a solid and stable baseline that may be unique in the industry."
This release contains forward-looking statements, including those dealing with expectations for the Company's and each division's performance for the current fiscal year and thereafter. Any statements that do not reflect historical information involve a number of risks and uncertainties. Actual results could be materially different. The factors that could cause materially different results include lower than expected consumer demand for the Company's products, whether caused by weakness in the overall economy or by changes in fashions or tastes that the Company fails to anticipate or respond appropriately to, changes in buying patterns by significant wholesale customers, disruptions in product supply or distribution, including the impact of plans to open a new distribution center, the inability to adjust inventory levels to sales and changes in business strategies by the Company's competitors. Other factors that could cause results to differ from expectations include the Company's ability to open, staff and support additional retail stores on schedule and at acceptable expense levels, and the outcome of litigation and environmental matters involving the Company. Forward-looking statements reflect the expectations of the Company at the time they are made, and investors should rely on them only as expressions of opinion about what may happen in the future and only at the time they are made. The Company undertakes no obligation to update any forward-looking statement.
The Company's live conference call on March 6, 2002, at 10:00 a.m. (Central time) may be accessed through the Company's internet website, www.genesco.com. The Company expects to discuss results from the fourth quarter and fiscal year 2002, and its current expectations for the first quarter and fiscal year ending February 1, 2003, during the call. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software. A replay will be available shortly after the call for 14 days.
Genesco, based in Nashville, sells footwear and accessories in more than 900 retail stores in the U.S., principally under the names Journeys, Journeys Kidz, Johnston & Murphy, Jarman and Underground Station, and on internet websites www.journeys.com and www.johnstonmurphy.com . The Company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand. Additional information on Genesco and its operating divisions may be accessed at its website www.genesco.com.
GENESCO INC.
Consolidated Earnings Summary
Fourth Quarter Fiscal Year Ended
In Thousands 2002 2001 2002 2001
Net sales $222,588 $214,193 $746,821 $680,166
Cost of sales 119,014 110,614 396,891 356,653
Selling and administrative
expenses 76,429 78,124 281,376 258,893
Restructuring and other
charges(A) 5,395 4,433 5,126 4,433
Earnings from operations
before interest 21,750 21,022 63,428 60,187
Interest expense, net 1,982 1,606 7,564 7,200
Earnings before income taxes
and
discontinued operations 19,768 19,416 55,864 52,987
Income tax expense 3,957 7,094 17,541 20,156
Earnings before discontinued
operations 15,811 12,322 38,323 32,831
Discontinued operations (net
of tax):
Operating income (loss) -- -- -- (226)
Provision for
discontinued operations (545) (32) (1,253) (3,007)
Net Earnings $15,266 $12,290 $37,070 $29,598
(A) Restructuring and other charges includes $0.3 million and $1.0
million of inventory write-down in Fiscal 2002 and 2001,
respectively
Earnings Per Share
Information
Fourth Quarter Fiscal Year Ended
In Thousands (except per 2002 2001 2002 2001
share amounts)
Preferred dividend
requirements $74 $74 $294 $299
Average common shares -
Basic EPS 21,810 21,499 21,881 21,513
Basic earnings per share:
Before discontinued
operations $0.72 $0.57 $1.74 $1.51
Net earnings $0.70 $0.57 $1.68 $1.36
Average common and common
equivalent shares -
Diluted EPS 27,171 27,073 27,293 27,023
Diluted earnings per share:
Before discontinued
operations $0.61 $0.49 $1.54 $1.35
Net earnings $0.59 $0.49 $1.49 $1.23
GENESCO INC.
Consolidated Earnings Summary
Fourth Quarter Fiscal Year Ended
In Thousands 2002 2001 2002 2001
Sales:
Journeys $123,198 $104,100 $381,736 $300,758
Jarman 42,623 40,742 120,242 109,791
Johnston & Murphy 42,440 51,894 167,989 188,060
Licensed Brands(A) 14,327 17,457 76,854 81,557
Net Sales 222,588 214,193 746,821 680,166
Pretax Earnings (Loss):
Journeys $19,854 $17,902 $51,925 $41,869
Jarman 5,684 5,332 5,319 8,395
Johnston & Murphy 2,655 7,611 14,125 24,636
Licensed Brands(B) 1,005 553 8,001 4,695
Corporate and Other(C) (2,053) (5,943) (10,816) (14,975)
Restructuring and Other
Charges (5,395) (4,433) (5,126) (4,433)
Operating income 21,750 21,022 63,428 60,187
Interest, net 1,982 1,606 7,564 7,200
Total Pretax Earnings 19,768 19,416 55,864 52,987
Income tax expense 3,957 7,094 17,541 20,156
Earnings before discontinued
operations 15,811 12,322 38,323 32,831
Discontinued operations (net
of tax):
Operating income (loss) -- -- -- (226)
Provision for
discontinued operations (545) (32) (1,253) (3,007)
Net Earnings $15,266 $12,290 $37,070 $29,598
(A) Includes Nautica sales of $0.0 million, $3.2 million, $6.1 million
and $18.8 million for the fourth quarter and year of Fiscal 2002
and 2001, respectively.
(B) Includes Nautica operating losses of $0.1 million, $0.4 million,
$0.6 million and $2.5 million for the fourth quarter and year of
of Fiscal 2002 and 2001, respectively.
(C) Includes unusual credits of $0.1 million for litigation and
severance in the fourth quarter of Fiscal 2002 and 2001 and unusual
charges of $0.4 million and $0.1 million for litigation and
severance in Fiscal 2002 and 2001, respectively. In addition, the
fourth quarter and year of Fiscal 2002 includes an insurance credit
of $0.3 million.
GENESCO INC.
Consolidated Balance Sheet
February 2, February 3,
In Thousands 2002 2001
Assets
Cash and short-term
investments $46,384 $60,382
Accounts receivable 19,857 22,700
Inventories 142,856 134,236
Other current assets 20,659 26,069
Current assets of
discontinued operations* -- 359
Total current assets 229,756 243,746
Plant, equipment and capital
leases 112,550 87,747
Other non-current assets 20,749 20,040
Non-current assets of
discontinued operations* 499 630
Total Assets $363,554 $352,163
Liabilities and
Shareholders' Equity
Total current liabilities 74,226 98,820
Long-term debt and capital
leases 103,245 103,500
Other long-term liabilities 24,896 11,618
Shareholders' equity 161,187 138,225
Total Liabilities and
Shareholders' Equity $363,554 $352,163
*Current and non-current assets of discontinued operations include
Volunteer Leather.
GENESCO INC.
Retail Units Operated - Twelve Months Ended February 2, 2002
Balance Balance
02/03/01 Open Conversions Close 02/02/02
Journeys Group 425 111 (1) 2 533
Journeys 425 97 (1) 2 519
Journeys Kidz 0 14 0 0 14
Jarman Group 207 32 1 13 227
Jarman Retail 150 0 (8) 12 130
Underground Station 57 32 9 1 97
Johnston & Murphy 147 10 0 9 148
Shops 115 9 0 8 116
Factory Outlets 32 1 0 1 32
Total Retail Units 779 153 0 24 908
Retail Units Operated - Three Months Ended February 2, 2002
Balance Balance
11/03/01 Open Conversions Close 02/2/02
Journeys Group 513 21 (1) 0 533
Journeys 501 19 (1) 0 519
Journeys Kidz 12 2 0 0 14
Jarman 225 4 1 3 227
Jarman Retail 134 0 (1) 3 130
Underground Station 91 4 2 0 97
Johnston & Murphy 148 2 0 2 148
Shops 115 2 0 1 116
Factory Outlets 33 0 0 1 32
Total Retail Units 886 27 0 5 908
Constant Store Sales
Three Months Ended Twelve Months Ended
February 2, February 3, February 2, February 3,
2002 2001 2002 2001
Journeys 3% 7% 6% 12%
Jarman -2% 5% -4% 6%
Jarman Retail 0% 4% -4% 4%
Underground Station -5% 12% -3% 24%
Johnston & Murphy -4% -1% -9% 3%
Shops -7% 1% -10% 4%
Factory Outlets 9% -9% -4% -1%
Total Constant Store
Sales 1% 5% 1% 8%
GENESCO INC.
Earnings Per Share Information
Fourth Quarter - Fiscal 2002
In Thousands (except per share
amounts) Income Shares Amount
Basic earnings per share:
Earnings before discontinued
operations as reported $15,811 21,810 $ 0.72(A)
Unusual items:
Restructuring and other
charges (net of tax) 3,373 21,810 0.15
Insurance proceeds (326) 21,810 (0.01)
Other adjustments (net of
tax) (56) 21,810 0.00
Adjustment of tax
liability (3,452) 21,810 (0.16)
Adjusted totals $15,350 21,810 $ 0.70
(A) Includes adjustment of $74,000 for preferred dividends in the
fourth quarter of Fiscal 2002.
Diluted earnings per share:
Earnings before discontinued
operations as reported $15,811 27,171 $ 0.61(B)
Unusual items:
Restructuring and other
charges (net of tax) 3,373 27,171 0.13
Insurance proceeds (326) 27,171 (0.01)
Other adjustments (net of
tax) (56) 27,171 0.00
Adjustment of tax
liability (3,452) 27,171 (0.13)
Adjusted totals $15,350 27,171 $ 0.60
(B) Includes adjustments of $74,000 for preferred dividends and
$968,000 for interest add back in the fourth quarter of
Fiscal 2002.
Fourth Quarter - Fiscal 2001
In Thousands (except per share
amounts) Income Shares Amount
Basic earnings per share:
Earnings before discontinued
operations as reported $12,322 21,499 $ 0.57(C)
Unusual items:
Restructuring and other
charges (net of tax) 2,748 21,499 0.13
Other adjustments (net of
tax) (46) 21,499 0.00
Adjusted totals $15,024 21,499 $ 0.70
(C) Includes adjustment of $74,000 for preferred dividends in the
fourth quarter of Fiscal 2001.
Diluted earnings per share:
Earnings before discontinued
operations as reported $12,322 27,073 $ 0.49(D)
Unusual items:
Restructuring and other
charges (net of tax) 2,748 27,073 0.10
Other adjustments (net of
tax) (46) 27,073 0.00
Adjusted totals $15,024 27,073 $ 0.59
(D) Includes adjustments of $74,000 for preferred dividends and
$970,000 for interest add back in the fourth quarter of
Fiscal 2001.
GENESCO INC.
Earnings Per Share Information
Fiscal 2002
In Thousands (except per share
amounts) Income Shares Amount
Basic earnings per share:
Earnings before discontinued
operations as reported $38,323 21,881 $ 1.74(A)
Unusual items:
Restructuring and other
charges (net of tax) 3,200 21,881 0.15
Insurance proceeds (326) 21,881 (0.02)
Other adjustments (net of
tax) 225 21,881 0.01
Adjustment of tax
liability (3,452) 21,881 (0.16)
Adjusted totals $37,970 21,881 $ 1.72
(A) Includes adjustment of $294,000 for preferred dividends in
Fiscal 2002.
Diluted earnings per share:
Earnings before discontinued
operations as reported $38,323 27,293 $ 1.54(B)
Unusual items:
Restructuring and other
charges (net of tax) 3,200 27,293 0.12
Insurance proceeds (326) 27,293 (0.01)
Other adjustments (net of
tax) 225 27,293 0.01
Adjustment of tax
liability (3,452) 27,293 (0.13)
Adjusted totals $37,970 27,293 $ 1.52
(B) Includes adjustments of $294,000 for preferred dividends and
$3,875,000 for interest add back in Fiscal 2002.
Fiscal 2001
In Thousands (except per share
amounts) Income Shares Amount
Basic earnings per share:
Earnings before discontinued
operations as reported $32,831 21,513 $ 1.51(C)
Unusual items:
Restructuring and other
charges (net of tax) 2,748 21,513 0.13
Other adjustments (net of
tax) 33 21,513 0.00
Adjusted totals $35,612 21,513 $ 1.64
(C) Includes adjustment of $299,000 for preferred dividends in
Fiscal 2001
Diluted earnings per share:
Earnings before discontinued
operations as reported $32,831 27,023 $ 1.35(D)
Unusual items:
Restructuring and other
charges (net of tax) 2,748 27,023 0.10
Other adjustments (net of
tax) 33 27,023 0.00
Adjusted totals $35,612 27,023 $ 1.45
(D) Includes adjustments of $299,000 for preferred dividends and
$3,881,000 for interest add back in Fiscal 2001.
SOURCE Genesco Inc.
CONTACT: financial, James S. Gulmi, +1-615-367-8325, or media, Claire S.
McCall, +1-615-367-8283, both of Genesco Inc.
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URL: http://www.johnstonmurphy.com
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