UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 12, 2015 (March 12, 2015)
GENESCO INC.
(Exact Name of Registrant as Specified in Charter)
Tennessee | 1-3083 | 62-0211340 | ||||||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
1415 Murfreesboro Road Nashville, Tennessee | 37217-2895 | |||||
(Address of Principal Executive Offices) | (Zip Code) | |||||
(615) 367-7000
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On March 12, 2015, Genesco Inc. issued a press release announcing results of operations for the fiscal fourth quarter and fiscal year ended January 31, 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
On March 12, 2015, Genesco Inc. also posted on its website, www.genesco.com, commentary by its chief financial officer on the quarterly and annual results. A copy of the commentary is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the press release and commentary furnished herewith contain non-GAAP financial measures, including adjusted selling, general and administrative expense, operating earnings, pretax earnings, earnings from continuing operations and earnings per share from continuing operations, as discussed in the text of the release and commentary and as detailed on the reconciliation schedule attached to the press release and commentary. For consistency and ease of comparison with Fiscal 2015’s previously announced earnings expectations and the adjusted results for the prior period announced last year, the Company believes that disclosure of the non-GAAP measures will be useful to investors.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
The following exhibits are furnished herewith:
Exhibit Number | Description | ||
99.1 | Press Release dated March 12, 2015, issued by Genesco Inc. | ||
99.2 | Genesco Inc. Fourth Fiscal Quarter Ended January 31, 2015 Chief Financial Officer’s Commentary | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
GENESCO INC. | ||||
Date: March 12, 2015 | By: | /s/ Roger G. Sisson | ||
Name: | Roger G. Sisson | |||
Title: | Senior Vice President, Secretary and General Counsel | |||
EXHIBIT INDEX
No. | Exhibit | |||
99.1 | Press Release dated March 12, 2015 | |||
99.2 | Genesco Inc. Fourth Fiscal Quarter Ended January 31, 2015 Chief Financial Officer’s Commentary | |||
Exhibit 99.1
Financial Contact: Mimi E. Vaughn (615) 367-7386
Media Contact: Claire S. McCall (615) 367-8283
GENESCO REPORTS FOURTH QUARTER AND
FISCAL 2015 RESULTS
NASHVILLE, Tenn., March 12, 2015 --- Genesco Inc. (NYSE:GCO) today reported earnings from continuing operations for the fourth quarter ended January 31, 2015, of $51.8 million, or $2.18 per diluted share, compared to earnings from continuing operations of $42.2 million, or $1.79 per diluted share, for the fourth quarter ended February 1, 2014. Fiscal 2015 fourth quarter results reflect pretax items of $1.9 million, or $0.12 per share after tax, including $1.0 million of expenses related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited, which are required to be expensed as compensation because the payment is contingent upon the payees’ continued employment; and $0.9 million for network intrusion expenses and asset impairment charges. Fiscal 2014 fourth quarter results reflect pretax items of $7.2 million, or $0.37 per share after tax, including $3.0 million of expenses related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited, and $5.7 million for network intrusion expenses, other legal matters, a lease termination, and asset impairment charges, partially offset by a $1.5 million gain related to the change in accounting for deferred bonuses under the Company’s EVA incentive plan announced by the Company in September 2013.
Adjusted for the items described above in both periods, earnings from continuing operations were $54.7 million, or $2.30 per diluted share, for the fourth quarter of Fiscal 2015, compared to earnings from continuing operations of $51.0 million, or $2.16 per diluted share, for the fourth quarter of Fiscal 2014. For consistency with Fiscal 2015's previously announced earnings expectations and with previously reported adjusted results for the prior year period, the Company believes that the disclosure of the results from continuing operations adjusted for these items will be useful to investors. A reconciliation of earnings and earnings per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles with the adjusted earnings and earnings per share numbers presented in this paragraph is set forth on Schedule B to this press release.
Net sales for the fourth quarter of Fiscal 2015 increased 12.6% to $893 million from $793 million in the fourth quarter of Fiscal 2014. Comparable sales in the fourth quarter 2015 increased 10% for the Company with a 16% increase in the Journeys Group, a 7% increase in the Lids Sports Group, a 3% increase in the Schuh Group, and a 2% increase in the Johnston & Murphy Group.
The Company also reported net sales for the year ended January 31, 2015, of $2.86 billion, an increase of 8.9% from net sales of $2.62 billion for the year ended February 1, 2014. Earnings from continuing operations for Fiscal 2015 were $99.4 million, or $4.19 per diluted share, compared to earnings from continuing operations of $93.0 million, or $3.94 per diluted share, for Fiscal 2014. Fiscal 2015 earnings reflect after-tax charges of $0.55 per diluted share, including, an indemnification asset write-off, network intrusion-related expenses, compensation expense associated with the Schuh deferred purchase price, effects of the change in accounting for deferred bonuses under the EVA incentive plan, asset impairments, other legal matters, partially offset by a gain on a lease termination. Fiscal 2014 earnings reflect after-tax charges of $1.15 per diluted share, including the effects of the change in
Exhibit 99.1
accounting for deferred bonuses under the EVA incentive plan, network intrusion-related expenses, compensation expense associated with the Schuh deferred purchase price, asset impairments, other legal matters, and a lease termination, partially offset by a gain on another lease termination.
Adjusted for the listed items in both years, earnings from continuing operations were $112.3 million, or $4.74 per diluted share, for Fiscal 2015, compared to earnings from continuing operations of $120.3 million, or $5.09 per diluted share, for Fiscal 2014. For consistency with previously announced earnings expectations, which did not reflect the listed items, the Company believes that disclosure of earnings from continuing operations adjusted for those items will be useful to investors. A reconciliation of the adjusted financial measures to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “Fourth quarter sales were strong, exceeding our expectations. However, gross margin pressure, lower than planned contribution from new stores and acquisitions in the Lids Sports Group and unfavorable trends in foreign exchange rates resulted in disappointing earnings.
“Comparable sales for the first quarter through Saturday, March 7, 2015, were up a solid 5% from the same period last year, despite the effects of severe winter storms in several of our key markets in February and early March.
“Based on the continued challenges in the Lids Sports Group combined with foreign exchange headwinds and supply chain uncertainties from the backlog related to recent West Coast port delays, we believe it is prudent to adopt a more conservative outlook for Fiscal 2016. We now expect adjusted Fiscal 2016 diluted earnings per share to be in the range of $5.10 to $5.20, which represents an 8% to 10% increase over Fiscal 2015’s adjusted earnings per share of $4.74. Consistent with previous guidance, these expectations do not include expected non-cash asset impairments and other charges, which are estimated in the range of $5.8 million to $6.3 million pretax, or $0.16 to $0.17 per share, after tax, in Fiscal 2016. This guidance assumes comparable sales increases in the 3% to 4% range for the full fiscal 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 our bottom line results for Fiscal 2015 were lower than we planned, we are pleased with the health of our footwear businesses, and especially with Journeys’ continuing strength. At the same time, we are confident that the Lids Sports Group’s strategic potential remains considerable despite current competitive and operational issues and are focused on improving the Group’s long-term profitability.”
Conference Call and Management Commentary
The Company has posted detailed financial commentary in writing on its website, www.genesco.com, in the investor relations section. The Company's live conference call on March 12, 2015 at 7:30 a.m. (Central time), may be accessed through the Company's internet website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.
Exhibit 99.1
Cautionary Note Concerning Forward-Looking Statements
This release contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses (including, without limitation, sales, expenses, margins and earnings) and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to estimates reflected in forward-looking statements, including the timing and amount of non-cash asset impairments related to retail store fixed assets or to intangible assets of acquired businesses; the effectiveness of our omnichannel initiatives; the timing and effectiveness of plans to improve the performance of Lids Sports Group; weakness in the consumer economy; competition in the Company's markets; inability of customers to obtain credit; fashion trends that affect the sales or product margins of the Company's retail product offerings; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons; the effects of storms and other weather-related disruptions; and the performance of athletic teams, the participants in major sporting events such as the Super Bowl and World Series, developments with respect to certain individual athletes, and other sports-related events or changes that may affect period-to-period comparisons in the Company’s Lids Sports Group retail business. Additional factors that could affect the Company's prospects and cause differences from expectations include the ability to build, open, staff and support additional retail stores and to renew leases in existing stores and control occupancy costs, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences; unexpected changes to the market for the Company's shares; variations from expected pension-related charges caused by conditions in the financial markets; and the cost and outcome of litigation, investigations and environmental matters involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, our SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via our website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.
About Genesco Inc.
Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel and accessories in more than 2,820 retail stores and leased departments throughout the U.S., Canada, the United Kingdom and the Republic of Ireland, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Schuh Kids, Lids, Locker Room by Lids, Lids Clubhouse, Johnston & Murphy, and on internet websites www.journeys.com, www.journeyskidz.com, www.shibyjourneys.com, www.schuh.co.uk, www.johnstonmurphy.com, www.lids.com, www.lids.ca, www.lidslockerroom.com, www.lidsteamsports.com, www.lidsclubhouse.com, www.trask.com, www.suregripfootwear.com and www.dockersshoes.com. The Company's Lids Sports Group division operates the Lids headwear stores,
Exhibit 99.1
the Locker Room by Lids and other team sports fan shops and single team clubhouse stores, and the Lids Team Sports team dealer business. In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the Trask brand, the licensed Dockers brand, SureGrip, and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.
Exhibit 99.1
GENESCO INC. | |||||||||||||||
Consolidated Earnings Summary | |||||||||||||||
Fourth Quarter | Fiscal Year Ended | ||||||||||||||
Jan. 31, | Feb. 1, | Jan. 31, | Feb. 1, | ||||||||||||
In Thousands | 2015 | 2014 | 2015 | 2014 | |||||||||||
Net sales | $ | 892,630 | $ | 792,506 | $ | 2,859,844 | $ | 2,624,972 | |||||||
Cost of sales | 468,397 | 406,862 | 1,459,433 | 1,325,922 | |||||||||||
Selling and administrative expenses* | 336,395 | 304,768 | 1,230,864 | 1,134,274 | |||||||||||
Asset impairments and other, net | 934 | 5,672 | 2,281 | 1,341 | |||||||||||
Earnings from operations | 86,904 | 75,204 | 167,266 | 163,435 | |||||||||||
Indemnification asset write-off | — | — | 7,050 | — | |||||||||||
Interest expense, net | 853 | 1,206 | 3,227 | 4,575 | |||||||||||
Earnings from continuing operations | |||||||||||||||
before income taxes | 86,051 | 73,998 | 156,989 | 158,860 | |||||||||||
Income tax expense | 34,294 | 31,786 | 57,616 | 65,878 | |||||||||||
Earnings from continuing operations | 51,757 | 42,212 | 99,373 | 92,982 | |||||||||||
Provision for discontinued operations | (1,361 | ) | (59 | ) | (1,648 | ) | (329 | ) | |||||||
Net Earnings | $ | 50,396 | $ | 42,153 | $ | 97,725 | $ | 92,653 | |||||||
*Includes $1.0 million and $7.3 million in deferred payments related to the Schuh acquisition in the fourth quarter and fiscal year ended January 31, 2015, respectively, and $3.0 million and $11.7 million for the fourth quarter and fiscal year ended February 1, 2014, respectively.
Earnings Per Share Information | |||||||||||||||
Fourth Quarter | Fiscal Year Ended | ||||||||||||||
Jan. 31, | Feb. 1, | Jan. 31, | Feb. 1, | ||||||||||||
In Thousands (except per share amounts) | 2015 | 2014 | 2015 | 2014 | |||||||||||
Preferred dividend requirements | $ | — | $ | — | $ | — | $ | 33 | |||||||
Average common shares - Basic EPS | 23,563 | 23,291 | 23,507 | 23,297 | |||||||||||
Basic earnings per share: | |||||||||||||||
From continuing operations | $ | 2.20 | $ | 1.81 | $ | 4.23 | $ | 3.99 | |||||||
Net earnings | $ | 2.14 | $ | 1.81 | $ | 4.16 | $ | 3.98 | |||||||
Average common and common | |||||||||||||||
equivalent shares - Diluted EPS | 23,759 | 23,600 | 23,708 | 23,615 | |||||||||||
Diluted earnings per share: | |||||||||||||||
From continuing operations | $ | 2.18 | $ | 1.79 | $ | 4.19 | $ | 3.94 | |||||||
Net earnings | $ | 2.12 | $ | 1.79 | $ | 4.12 | $ | 3.92 | |||||||
Exhibit 99.1
GENESCO INC. | |||||||||||||||
Consolidated Earnings Summary | |||||||||||||||
Fourth Quarter | Fiscal Year Ended | ||||||||||||||
Jan. 31, | Feb. 1, | Jan. 31, | Feb. 1, | ||||||||||||
In Thousands | 2015 | 2014 | 2015 | 2014 | |||||||||||
Sales: | |||||||||||||||
Journeys Group | $ | 376,734 | $ | 321,534 | $ | 1,179,476 | $ | 1,082,241 | |||||||
Schuh Group | 123,942 | 121,744 | 406,947 | 364,732 | |||||||||||
Lids Sports Group | 294,040 | 251,481 | 902,661 | 820,996 | |||||||||||
Johnston & Murphy Group | 75,318 | 72,569 | 259,675 | 245,941 | |||||||||||
Licensed Brands | 22,380 | 24,926 | 110,115 | 109,780 | |||||||||||
Corporate and Other | 216 | 252 | 970 | 1,282 | |||||||||||
Net Sales | $ | 892,630 | $ | 792,506 | $ | 2,859,844 | $ | 2,624,972 | |||||||
Operating Income (Loss): | |||||||||||||||
Journeys Group | $ | 53,240 | $ | 41,179 | $ | 114,784 | $ | 97,377 | |||||||
Schuh Group (1) | 11,499 | 7,194 | 10,110 | 3,063 | |||||||||||
Lids Sports Group | 23,753 | 28,231 | 48,970 | 63,748 | |||||||||||
Johnston & Murphy Group | 6,279 | 7,206 | 14,856 | 17,638 | |||||||||||
Licensed Brands | 1,983 | 2,110 | 10,459 | 10,614 | |||||||||||
Corporate and Other (2) | (9,850 | ) | (10,716 | ) | (31,913 | ) | (29,005 | ) | |||||||
Earnings from operations | 86,904 | 75,204 | 167,266 | 163,435 | |||||||||||
Indemnification asset write-off | — | — | 7,050 | — | |||||||||||
Interest, net | 853 | 1,206 | 3,227 | 4,575 | |||||||||||
Earnings from continuing operations | |||||||||||||||
before income taxes | 86,051 | 73,998 | 156,989 | 158,860 | |||||||||||
Income tax expense | 34,294 | 31,786 | 57,616 | 65,878 | |||||||||||
Earnings from continuing operations | 51,757 | 42,212 | 99,373 | 92,982 | |||||||||||
Provision for discontinued operations | (1,361 | ) | (59 | ) | (1,648 | ) | (329 | ) | |||||||
Net Earnings | $ | 50,396 | $ | 42,153 | $ | 97,725 | $ | 92,653 | |||||||
(1)Includes $1.0 million and $7.3 million in deferred payments related to the Schuh acquisition in the fourth quarter and fiscal year ended January 31, 2015, respectively, and $3.0 million and $11.7 million for the fourth quarter and fiscal year ended February 1, 2014, respectively.
(2)Includes a $1.0 million charge in the fourth quarter of Fiscal 2015 which includes $0.7 million for network intrusion expenses and $0.3 million for asset impairments. Includes a $2.3 million charge for Fiscal 2015 which includes $3.1 million for network intrusion expenses, $1.9 million for asset impairments and $0.6 million for other legal matters, partially offset by a $3.3 million gain on a lease termination. Includes a $5.7 million charge in the fourth quarter of Fiscal 2014 which includes $1.9 million for network intrusion expenses, $1.6 million for a lease termination, $1.6 million for other legal matters and $0.6 million for asset impairments. Includes a $1.3 million charge in Fiscal 2014 which includes $3.3 million for network intrusion expenses, $2.3 million for asset impairments, $2.4 million for other legal matters and $1.6 million for a lease termination, partially offset by an $8.3 million gain on a lease termination.
Exhibit 99.1
GENESCO INC. | |||||||
Consolidated Balance Sheet | |||||||
Jan. 31, | Feb. 1, | ||||||
In Thousands | 2015 | 2014 | |||||
Assets | |||||||
Cash and cash equivalents | $ | 112,867 | $ | 59,447 | |||
Accounts receivable | 55,263 | 52,646 | |||||
Inventories | 598,145 | 567,261 | |||||
Other current assets | 82,305 | 77,521 | |||||
Total current assets | 848,580 | 756,875 | |||||
Property and equipment | 305,752 | 280,037 | |||||
Other non-current assets | 429,677 | 402,372 | |||||
Total Assets | $ | 1,584,009 | $ | 1,439,284 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 176,307 | $ | 145,483 | |||
Current portion long-term debt | 13,152 | 6,793 | |||||
Other current liabilities | 217,702 | 153,302 | |||||
Total current liabilities | 407,161 | 305,578 | |||||
Long-term debt | 16,003 | 26,937 | |||||
Other long-term liabilities | 163,593 | 188,646 | |||||
Equity | 997,252 | 918,123 | |||||
Total Liabilities and Equity | $ | 1,584,009 | $ | 1,439,284 | |||
Exhibit 99.1
GENESCO INC. | ||||||||||||||||||||||||||
Retail Units Operated - Twelve Months Ended January 31, 2015 | ||||||||||||||||||||||||||
Balance | Acquisi- | Balance | Acquisi- | Balance | ||||||||||||||||||||||
2/2/2013 | tions | Open | Close | 2/1/2014 | tions | Open | Close | 1/31/2015 | ||||||||||||||||||
Journeys Group | 1,157 | — | 39 | 28 | 1,168 | — | 34 | 20 | 1,182 | |||||||||||||||||
Journeys | 820 | — | 20 | 13 | 827 | — | 16 | 9 | 834 | |||||||||||||||||
Underground by Journeys | 130 | — | — | 13 | 117 | — | — | 7 | 110 | |||||||||||||||||
Journeys Kidz | 156 | — | 19 | 1 | 174 | — | 18 | 3 | 189 | |||||||||||||||||
Shi by Journeys | 51 | — | — | 1 | 50 | — | — | 1 | 49 | |||||||||||||||||
Schuh Group | 92 | — | 29 | 22 | 99 | — | 13 | 4 | 108 | |||||||||||||||||
Schuh UK* | 70 | — | 29 | 9 | 90 | — | 12 | 4 | 98 | |||||||||||||||||
Schuh ROI | 9 | — | — | — | 9 | — | 1 | — | 10 | |||||||||||||||||
Schuh Concessions* | 13 | — | — | 13 | — | — | — | — | — | |||||||||||||||||
Lids Sports Group** | 1,053 | 15 | 102 | 37 | 1,133 | 56 | 218 | 43 | 1,364 | |||||||||||||||||
Johnston & Murphy Group | 157 | — | 13 | 2 | 168 | — | 8 | 6 | 170 | |||||||||||||||||
Shops | 102 | — | 6 | 2 | 106 | — | 3 | 4 | 105 | |||||||||||||||||
Factory Outlets | 55 | — | 7 | — | 62 | — | 5 | 2 | 65 | |||||||||||||||||
Total Retail Units | 2,459 | 15 | 183 | 89 | 2,568 | 56 | 273 | 73 | 2,824 | |||||||||||||||||
Permanent Units* | 2,446 | 15 | 173 | 69 | 2,565 | 56 | 273 | 70 | 2,824 | |||||||||||||||||
Retail Units Operated - Three Months Ended January 31, 2015 | ||||||||||||||
Balance | Acquisi- | Balance | ||||||||||||
11/1/2014 | tions | Open | Close | 1/31/2015 | ||||||||||
Journeys Group | 1,183 | — | 8 | 9 | 1,182 | |||||||||
Journeys | 837 | — | 2 | 5 | 834 | |||||||||
Underground by Journeys | 113 | — | — | 3 | 110 | |||||||||
Journeys Kidz | 184 | — | 6 | 1 | 189 | |||||||||
Shi by Journeys | 49 | — | — | — | 49 | |||||||||
Schuh Group | 106 | — | 2 | — | 108 | |||||||||
Schuh UK* | 96 | — | 2 | — | 98 | |||||||||
Schuh ROI | 10 | — | — | — | 10 | |||||||||
Lids Sports Group** | 1,377 | — | 3 | 16 | 1,364 | |||||||||
Johnston & Murphy Group | 171 | — | — | 1 | 170 | |||||||||
Shops | 106 | — | — | 1 | 105 | |||||||||
Factory Outlets | 65 | — | — | — | 65 | |||||||||
Total Retail Units | 2,837 | — | 13 | 26 | 2,824 | |||||||||
Permanent Units* | 2,837 | — | 13 | 26 | 2,824 | |||||||||
*Excludes Schuh Concessions and temporary "pop-up" locations.
**Includes 190 Locker Room by Lids in Macy's stores as of January 31, 2015.
Exhibit 99.1
Genesco Inc. | |||||||||||
Comparable Sales (including same store and comparable direct sales) | |||||||||||
Fourth Quarter Ended | Fiscal Year Ended | ||||||||||
Jan. 31, | Feb. 1, | Jan. 31, | Feb. 1, | ||||||||
2015 | 2014 | 2015 | 2014 | ||||||||
Journeys Group | 16 | % | 0 | % | 8 | % | (1 | )% | |||
Schuh Group | 3 | % | (7 | )% | 1 | % | (8 | )% | |||
Lids Sports Group | 7 | % | 4 | % | 2 | % | 0 | % | |||
Johnston & Murphy Group | 2 | % | 11 | % | 1 | % | 8 | % | |||
Total Comparable Sales | 10 | % | 1 | % | 4 | % | (1 | )% | |||
Exhibit 99.1
Schedule B
Genesco Inc. | ||||||||||||
Adjustments to Reported Earnings from Continuing Operations | ||||||||||||
Fourth Quarter Ended January 31, 2015 and February 1, 2014 | ||||||||||||
Fourth | Impact on | Fourth | Impact on | |||||||||
Quarter | Diluted | Quarter | Diluted | |||||||||
In Thousands (except per share amounts) | Jan 2015 | EPS | Jan 2014 | EPS | ||||||||
Earnings from continuing operations, as reported | $ | 51,757 | $ | 2.18 | $ | 42,212 | $ | 1.79 | ||||
Adjustments: (1) | ||||||||||||
Impairment charges | 162 | — | 365 | 0.02 | ||||||||
Deferred payment - Schuh acquisition | 965 | 0.04 | 3,042 | 0.13 | ||||||||
Gain on lease termination | (14 | ) | — | — | — | |||||||
Lease termination expense | — | — | 986 | 0.04 | ||||||||
Change in accounting for bonus awards | — | — | (935 | ) | (0.04 | ) | ||||||
Other legal matters | — | — | 1,017 | 0.04 | ||||||||
Network intrusion expenses | 420 | 0.02 | 1,196 | 0.05 | ||||||||
Higher (lower) effective tax rate | 1,434 | 0.06 | 3,128 | 0.13 | ||||||||
Adjusted earnings from continuing operations (2) | $ | 54,724 | $ | 2.30 | $ | 51,011 | $ | 2.16 | ||||
(1) All adjustments are net of tax where applicable. The tax rate for the fourth quarter of Fiscal 2015 is 37.7% excluding a FIN 48 discrete item of less than $0.1 million. The tax rate for the fourth quarter of Fiscal 2014 is 37.1% excluding a FIN 48 discrete item of $0.1 million.
(2) EPS reflects 23.8 million and 23.6 million share counts for Fiscal 2015 and 2014, respectively, which includes common stock equivalents in both years.
The Company believes that disclosure of earnings and earnings per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income | |||||||||
Fourth Quarter Ended January 31, 2015 | |||||||||
Three Months ended January 31, 2015 | |||||||||
Operating | Bonus Adj | Adj Operating | |||||||
In Thousands | Income | and Other | Income | ||||||
Journeys Group | $ | 53,240 | $ | — | $ | 53,240 | |||
Schuh Group* | 11,499 | 965 | 12,464 | ||||||
Lids Sports Group | 23,753 | — | 23,753 | ||||||
Johnston & Murphy Group | 6,279 | — | 6,279 | ||||||
Licensed Brands | 1,983 | — | 1,983 | ||||||
Corporate and Other | (9,850 | ) | 934 | (8,916 | ) | ||||
Total Operating Income | $ | 86,904 | $ | 1,899 | $ | 88,803 | |||
*Schuh Group adjustments include $1.0 million in deferred purchase price payments.
Exhibit 99.1
Schedule B
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income | |||||||||
Fourth Quarter Ended February 1, 2014 | |||||||||
Three Months ended February 1, 2014 | |||||||||
Operating | Bonus Adj | Adj Operating | |||||||
In Thousands | Income | and Other | Income | ||||||
Journeys Group | $ | 41,179 | $ | 1,068 | $ | 42,247 | |||
Schuh Group* | 7,194 | 2,433 | 9,627 | ||||||
Lids Sports Group | 28,231 | — | 28,231 | ||||||
Johnston & Murphy Group | 7,206 | 11 | 7,217 | ||||||
Licensed Brands | 2,110 | 13 | 2,123 | ||||||
Corporate and Other | (10,716 | ) | 3,676 | (7,040 | ) | ||||
Total Operating Income | $ | 75,204 | $ | 7,201 | $ | 82,405 | |||
*Schuh Group adjustments include $3.0 million in deferred purchase price payments.
Genesco Inc. | ||||||||||||
Adjustments to Reported Earnings from Continuing Operations | ||||||||||||
Twelve Months Ended January 31, 2015 and February 1, 2014 | ||||||||||||
Impact on | Impact on | |||||||||||
12 mos | Diluted | 12 mos | Diluted | |||||||||
In Thousands (except per share amounts) | Jan 2015 | EPS | Jan 2014 | EPS | ||||||||
Earnings from continuing operations, as reported | $ | 99,373 | $ | 4.19 | $ | 92,982 | $ | 3.94 | ||||
Adjustments: (1) | ||||||||||||
Impairment charges | 1,185 | 0.05 | 1,473 | 0.06 | ||||||||
Deferred payment - Schuh acquisition | 7,311 | 0.31 | 11,693 | 0.50 | ||||||||
Gain on lease termination | (2,118 | ) | (0.09 | ) | (2,077 | ) | (0.09 | ) | ||||
Lease termination expense | — | — | 986 | 0.04 | ||||||||
Indemnification asset write-off | 7,050 | 0.30 | — | — | ||||||||
Change in accounting for bonus awards | 3,575 | 0.15 | 9,384 | 0.40 | ||||||||
Other legal matters | 437 | 0.02 | 1,488 | 0.06 | ||||||||
Network intrusion expenses | 1,929 | 0.08 | 2,092 | 0.09 | ||||||||
Higher (lower) effective tax rate | (6,404 | ) | (0.27 | ) | 2,251 | 0.09 | ||||||
Adjusted earnings from continuing operations (2) | $ | 112,338 | $ | 4.74 | $ | 120,272 | $ | 5.09 | ||||
(1) All adjustments are net of tax where applicable. The tax rate for Fiscal 2015 is 37.3% excluding a FIN 48 discrete item of $0.1 million. The tax rate for Fiscal 2014 is 37.2% excluding a FIN 48 discrete item of $0.2 million.
(2) EPS reflects 23.7 million and 23.6 million share counts for Fiscal 2015 and 2014, respectively, which includes common stock equivalents in both years.
The Company believes that disclosure of earnings and earnings per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
Exhibit 99.1
Schedule B
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income | |||||||||
Twelve Months Ended January 31, 2015 | |||||||||
Twelve Months ended January 31, 2015 | |||||||||
Operating | Bonus Adj | Adj Operating | |||||||
In Thousands | Income | and Other | Income | ||||||
Journeys Group | $ | 114,784 | $ | 4,919 | $ | 119,703 | |||
Schuh Group* | 10,110 | 7,311 | 17,421 | ||||||
Lids Sports Group | 48,970 | — | 48,970 | ||||||
Johnston & Murphy Group | 14,856 | 25 | 14,881 | ||||||
Licensed Brands | 10,459 | — | 10,459 | ||||||
Corporate and Other | (31,913 | ) | 3,016 | (28,897 | ) | ||||
Total Operating Income | $ | 167,266 | $ | 15,271 | $ | 182,537 | |||
*Schuh Group adjustments include $7.3 million in deferred purchase price payments.
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income | |||||||||
Twelve Months Ended February 1, 2014 | |||||||||
Twelve Months ended February 1, 2014 | |||||||||
Operating | Bonus Adj | Adj Operating | |||||||
In Thousands | Income | and Other | Income | ||||||
Journeys Group* | $ | 97,377 | $ | 8,096 | $ | 105,473 | |||
Schuh Group** | 3,063 | 15,028 | 18,091 | ||||||
Lids Sports Group | 63,748 | 1,676 | 65,424 | ||||||
Johnston & Murphy Group | 17,638 | 34 | 17,672 | ||||||
Licensed Brands | 10,614 | 13 | 10,627 | ||||||
Corporate and Other* | (29,005 | ) | 8,117 | (20,888 | ) | ||||
Total Operating Income | $ | 163,435 | $ | 32,964 | $ | 196,399 | |||
*Journeys Group and Corporate adjustments include $3.5 million and $1.5 million, respectively, in bonus adjustments
resulting from the gain on a lease termination for a Journeys store in the second quarter of Fiscal 2014.
**Schuh Group adjustments include $11.7 million in deferred purchase price payments.
Exhibit 99.1
Schedule B
Genesco Inc. | ||||||||||||
Adjustments to Forecasted Earnings from Continuing Operations | ||||||||||||
Fiscal Year Ending January 30, 2016 | ||||||||||||
In Thousands (except per share amounts) | High Guidance | Low Guidance | ||||||||||
Fiscal 2016 | Fiscal 2016 | |||||||||||
Forecasted earnings from continuing operations | $ | 118,664 | $ | 4.98 | $ | 116,177 | $ | 4.87 | ||||
Adjustments: (1) | ||||||||||||
Asset impairment and other charges | 3,710 | 0.16 | 4,028 | 0.17 | ||||||||
Deferred payment - Schuh acquisition | 1,526 | 0.06 | 1,526 | 0.06 | ||||||||
Adjusted forecasted earnings from continuing operations (2) | $ | 123,900 | $ | 5.20 | $ | 121,731 | $ | 5.10 | ||||
(1) All adjustments are net of tax where applicable. The forecasted tax rate for Fiscal 2016 is approximately 36.4% excluding a FIN 48 discrete item of $0.1 million.
(2) EPS reflects 23.8 million share count for Fiscal 2016 which includes common stock equivalents.
This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.
Exhibit 99.2
GENESCO INC.
CHIEF FINANCIAL OFFICER’S COMMENTARY
FISCAL YEAR 2015
FOURTH QUARTER ENDED JANUARY 31, 2015
Consolidated Results
Fourth Quarter
Sales
Fourth quarter net sales increased 12.6% to $893 million in Fiscal 2015 from $793 million in Fiscal 2014. Comparable sales for Genesco and each of its business segments, including both same store sales and comparable sales from the Company’s direct (e-commerce and catalog) businesses for the quarter, were as follows:
Comparable Sales | ||||||
4th Qtr | 4th Qtr | 12 mos | 12 mos | |||
Same Store Sales: | FY15 | FY14 | FY15 | FY14 | ||
Journeys Group | 14% | (1)% | 7% | (2)% | ||
Schuh Group | (1 | )% | (7)% | (1 | )% | (9)% |
Lids Sports Group | 5% | 3% | 1% | (1)% | ||
Johnston & Murphy Group | 2% | 7% | 1% | 7% | ||
Total Genesco | 9% | 0% | 4% | (2)% | ||
4th Qtr | 4th Qtr | 12 mos | 12 mos | |||
Comparable Direct Sales: | FY15 | FY14 | FY15 | FY14 | ||
Journeys Group | 40% | 20% | 30% | 18% | ||
Schuh Group | 25% | (7)% | 12% | (4)% | ||
Lids Sports Group | 27% | 18% | 14% | 26% | ||
Johnston & Murphy Group | 3% | 26% | (1)% | 15% | ||
Total Genesco | 25% | 10% | 14% | 11% | ||
4th Qtr | 4th Qtr | 12 mos | 12 mos | |||
Same Store and Comparable Direct Sales: | FY15 | FY14 | FY15 | FY14 | ||
Journeys Group | 16% | 0% | 8% | (1)% | ||
Schuh Group | 3% | (7)% | 1% | (8)% | ||
Lids Sports Group | 7% | 4% | 2% | 0% | ||
Johnston & Murphy Group | 2% | 11% | 1% | 8% | ||
Total Genesco | 10% | 1% | 4% | (1)% | ||
Through March 7, 2015, first quarter same store sales increased 3% and direct sales increased 36% on a comparable basis; and combined comparable sales increased 5%.
Gross Margin
Fourth quarter gross margin was 47.5% this year compared with 48.7% last year, primarily reflecting lower gross margins in Schuh, Lids, and Johnston & Murphy.
Exhibit 99.2
SG&A
Selling and administrative expense for the fourth quarter decreased to 37.7% of sales from 38.5% for the same period last year. Included in expenses this quarter is $1.0 million, or $0.04 per diluted share, in expense related to deferred purchase price in the Schuh acquisition. A deferred purchase price cash payment of £15 million was paid in June 2014. The remaining deferred purchase price cash payment of £10 million is due in June 2015 if the payees remain employed until the payment date. As we have discussed before, because of the retention feature, U.S. GAAP requires deferred purchase price payments to be expensed as compensation. Last year, expenses in the quarter included $3.0 million, or $0.13 per diluted share, of deferred purchase price. Last year’s expenses also included a gain of $1.5 million, or $0.04 per diluted share, recognized in connection with a change to the accounting treatment of “banked” bonuses under the Company’s EVA Incentive Plan. During the first quarter of this year, an amendment to the EVA Incentive Plan had the result of restoring the accounting treatment of banked bonuses that had been in effect prior to the accounting change last year. With the Plan amendment, the Company recorded a one-time charge of $5.7 million in the first quarter this year, representing the total of all “banked” bonuses as of the date of the amendment. Consequently, SG&A expense for the fourth quarter this year does not include any amortization of banked bonuses. Excluding the deferred purchase price expense from both periods and the effects of the bonus-related accounting change from last year, SG&A as a percent of sales decreased to 37.6% from 38.3% last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document. The 70 basis points of the year-over-year decrease in SG&A expense as a percent of sales reflects a 50 basis point increase in bonus expense due to the effect of a positive accrual for EVA bonuses in the quarter this year compared to a reversal of previous EVA bonus accruals in the fourth quarter last year that was more than offset by the reduction in the Schuh contingent bonus payment accrual, discussed below, and leverage in rent, other professional fees and other items.
Also included in fourth quarter SG&A expense, but not eliminated from the adjusted expense, is $3.0 million, or $0.10 per diluted share, this year, and $6.0 million, or $0.20 per diluted share, last year, related to a contingent bonus payment provided for in the Schuh acquisition. The purchase agreement calls for a total payment of up to £28 million including payroll taxes to members of the Schuh management group payable in Fiscal 2016 if they have achieved certain earnings targets above the planned earnings on which we based our acquisition valuation. As we have discussed previously, there have been quarterly accruals for a portion of this payment, reflecting an estimate of the probability, based on Schuh’s performance, that it will be earned. The final contingent bonus accrual was made in the fourth quarter of the current fiscal year.
Asset Impairment and Other Items
The asset impairment and other charge of $1.0 million for the fourth quarter of Fiscal 2015 included network intrusion expenses of $0.7 million and asset impairments of $0.3 million. Last year’s fourth quarter asset impairment and other charge of $5.7 million included a $1.9 million charge for network intrusion expenses, a $1.6 million charge for a lease termination, a $1.6 million charge for other legal matters and a $0.6 million charge for asset impairments.
The asset impairment and other charge, the deferred purchase price expense, and the effects of the bonus-related accounting change referenced above are collectively referred to as “Excluded Items” in the discussion below.
Exhibit 99.2
Operating Income
Genesco’s operating income for the fourth quarter was $86.9 million this year compared with $75.2 million last year. Adjusted for the Excluded Items in both periods, operating income for the fourth quarter was $88.8 million this year compared with $82.4 million last year. Adjusted operating margin was 9.9% of sales in the fourth quarter this year and 10.4% last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document.
Interest Expense
Net interest expense for the quarter was $0.9 million, compared with $1.2 million for the same period last year.
Pretax Earnings
Pretax earnings for the quarter were $85.1 million this year and $74.0 million last year. Adjusted for the Excluded Items in both years, pretax earnings for the quarter were $88.0 million this year compared to $81.2 million last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document.
Taxes
The effective tax rate for the quarter was 39.9% this year compared to 43.0% last year. The adjusted tax rate, reflecting the exclusion of the Excluded Items, was 37.7% this year compared to 37.1% last year. The increase this year was due to a valuation allowance on certain deferred tax assets in the U.K.
Earnings From Continuing Operations After Taxes
Earnings from continuing operations were $51.8 million, or $2.18 per diluted share, in the fourth quarter this year, compared to earnings of $42.2 million, or $1.79 per diluted share, in the fourth quarter last year. Adjusted for the Excluded Items in both periods, fourth quarter earnings from continuing operations were $54.7 million, or $2.30 per diluted share this year, compared with $51.0 million, or $2.16 per diluted share, last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document.
Fiscal Year 2015
Consolidated net sales increased 8.9% for Fiscal 2015.
Same store sales for the year increased 4% and comparable direct sales increased 14%. Comparable sales, including both same store sales and comparable direct sales, increased 4%.
For the full year, operating income was $167.3 million compared to $163.4 million last year. Excluding the items discussed above, adjusted operating income was $182.5 million, compared to $196.4 million last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document.
Exhibit 99.2
Diluted earnings per share from continuing operations for Fiscal 2015 increased to $4.19 from $3.94 for Fiscal 2014. Excluding the items discussed above, adjusted earnings per share were $4.74 compared with $5.09 last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measure is provided in the schedule at the end of this document.
Segment Results
Lids Sports Group
Lids Sports Group’s sales for the fourth quarter increased 16.9% to $294 million from $251 million last year.
Same store sales for the quarter increased 5% this year compared to 3% last year. Comparable direct sales increased 27% compared to 18% last year. Comparable sales, including both same store and comparable direct sales, increased 7% this year compared to 4% last year. Through March 7, 2015, same store sales for the first quarter decreased 4%; e-commerce sales increased 86%; and combined comparable sales increased 2%.
The Group’s gross margin as a percent of sales decreased 330 basis points due primarily to increased promotional activity, increased shipping and warehouse expense, and changes in sales mix. SG&A expense as a percent of sales decreased 10 basis points from 39.1% to 39.0%, due primarily to positive leverage from positive comparable sales.
The Group’s fourth quarter operating income was $23.8 million, or 8.1% of sales, down from $28.2 million, or 11.2% of sales, last year.
For Fiscal 2015, the Group’s sales increased 10% to $903 million from last year. Adjusted operating income was $49.0 million, or 5.4% of sales, down from $65.4 million, or 8.0% of sales, last year.
Journeys Group
Journeys Group’s sales for the quarter increased 17.2% to $377 million from $322 million last year.
Same store sales for the Group were up 14%, compared with a 1% decrease last year; comparable direct sales increased 40% this year and 20% last year. Combined comparable sales increased 16% this year compared with break-even comparable sales last year. Through March 7, 2015, same store sales for the first quarter increased 7%; comparable direct sales increased 25%; and combined comparable sales increased 7%.
Gross margin for the Journeys Group increased 30 basis points in the quarter due primarily to lower markdowns.
The Journeys Group’s adjusted SG&A expense decreased 70 basis points as a percent of sales for the fourth quarter, reflecting positive leverage from positive comparable sales.
The Journeys Group’s adjusted operating income for the quarter was $53.2 million, or 14.1% of sales, compared to $42.2 million, or 13.1% of sales, last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is posted on the Company’s website in conjunction with this document.
Exhibit 99.2
For Fiscal 2015, the Group’s sales increased 9% to $1.2 billion. Adjusted operating income was $119.7 million, or 10.1% sales, compared to $105.5 million, or 9.7% of sales, last year.
Schuh Group
Schuh Group’s sales in the fourth quarter were $124 million, compared to $122 million last year, an increase of 1.8%. Same store sales decreased 1% in the quarter compared to a 7% decrease last year; direct sales increased 25% compared to a 7% decrease last year; and total comparable sales increased 3% compared to a 7% decrease last year. Through March 7, 2015, same store sales for the first quarter were flat; comparable direct sales increased 22%; and total comparable sales increased 4%.
Schuh Group’s gross margin was down 260 basis points in the quarter due primarily to increased shipping and warehouse expenses and increased markdowns. Schuh Group’s adjusted SG&A expense decreased 470 basis points due primarily to a lower contingent bonus accrual in the fourth quarter this year compared to the same period last year.
Schuh Group’s adjusted operating income for the quarter was $12.5 million, or 10.1% of sales compared with $9.6 million, or 7.9% of sales last year.
For Fiscal 2015, the Group’s sales increased 12% to $407 million. Adjusted operating income was $17.4 million, or 4.3% of sales, compared to $18.1 million, or 5.0% of sales, last year. Adjusting for the contingent bonus accrual, the operating margin would have been 7.2% of sales this year and 8.6% of sales last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is posted on the Company’s website in conjunction with this document.
Johnston & Murphy Group
Johnston & Murphy Group’s fourth quarter sales increased 3.8%, to $75 million, compared to $73 million in the fourth quarter last year.
Same store sales increased 2% compared to 7% last year; direct sales increased 3% compared to 26% last year; and combined comparable sales increased 2% on top of an 11% increase last year. Direct sales represented about 15% of Johnston & Murphy Group’s sales this quarter. Through March 7, 2015, same store sales for the first quarter increased 1%; e-commerce and catalog sales decreased 7%; and combined comparable sales decreased 1%.
Johnston & Murphy’s gross margin for the Group decreased 80 basis points in the quarter primarily due to increased markdowns. SG&A expense as a percent of sales increased by 80 basis points, due primarily to increased advertising expenses, occupancy costs and selling salaries. The Group’s adjusted operating income was $6.3 million or 8.3% of sales, compared to operating income of $7.2 million, or 9.9% of sales last year.
For Fiscal 2015, the Group’s sales increased 6% to $260 million. Adjusted operating income was $14.9 million, or 5.7% of sales, compared to $17.7 million, or 7.2% of sales, last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is posted on the Company’s website in conjunction with this document.
Licensed Brands
Licensed Brands’ sales decreased 10.2% to $22 million in the fourth quarter this year, compared to $25 million in the fourth quarter last year. Gross margin was up 280 basis points, due primarily to changes in product mix.
Exhibit 99.2
SG&A expense as a percent of sales was up 250 basis points primarily due to license agreement expense and increased advertising and selling expenses.
Adjusted operating income for the quarter was $2.0 million or 8.9% of sales, compared with $2.1 million, or 8.5% of sales, last year.
For Fiscal 2015, Licensed Brands’ sales increased 0.3% to $110 million. Adjusted operating income was $10.5 million, or 9.5% of sales, compared to $10.6 million, or 9.7% of sales, last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is posted on the Company’s website in conjunction with this document.
Corporate
Corporate expenses were $9.9 million or 1.1% of sales, compared with $10.7 million or 1.4% of sales last year. Adjusted for the applicable Excluded Items, corporate expenses were $8.9 million this year compared to $7.0 million last year, primarily due to increased bonus expense as a result of the reversal of bonus accruals last year. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is posted on the Company’s website in conjunction with this document.
Balance Sheet
Cash
Cash at the end of the fourth quarter was $113 million compared with $59 million last year. We ended the quarter with $29 million in U.K. debt, compared with $34 million in U.K. debt last year. Revolver borrowings were zero at the end of Fiscal 2015 and 2014.
We repurchased 51,550 shares in the fourth quarter this year. During Fiscal 2015, we repurchased 64,709 shares at a cost of about $5 million, or $71.63 per share. Over the past two years, we have spent about $25 million repurchasing 403,000 shares at an average price of $62.90 per share. We currently have $61 million remaining in the most recent buyback authorization.
Inventory
Inventories increased 5% in the fourth quarter on a year-over-year basis. Retail inventory per square foot decreased 3%.
Equity
Equity was $997 million at quarter-end, compared with $918 million last year.
Capital Expenditures and Store Count
For the fourth quarter, capital expenditures were $17 million and depreciation and amortization was $20 million. For Fiscal 2015, capital expenditures were $104 million and depreciation and amortization was $74 million. During the quarter, we opened 13 new stores and closed 26 stores. Excluding Locker Room by Lids in Macy’s stores, we ended the quarter with 2,634 stores compared with 2,542 stores at the end of the fourth quarter last year, or an increase of 4%. Square footage increased 8% on a year-over-year basis,
Exhibit 99.2
including the Macy’s locations. During the year, we opened 165 Macy’s locations. The store count as of January 31, 2015 included:
Lids stores (including 117 stores in Canada) | 932 |
Lids Locker Room Stores (including 37 stores in Canada) | 209 |
Lids Clubhouse stores | 33 |
Journeys stores (including 35 stores in Canada) | 834 |
Journeys Kidz stores | 189 |
Shï by Journeys stores | 49 |
Underground by Journeys stores | 110 |
Schuh Stores (including 6 Kids stores) | 108 |
Johnston & Murphy Stores and Factory stores (including 7 stores in Canada) | 170 |
Total Stores | 2,634 |
Locker Room by Lids in Macy’s stores | 190 |
Total Stores and Macy’s Locations | 2,824 |
For Fiscal 2016, we are forecasting capital expenditures in the range of $115 to $130 million and depreciation and amortization of about $83 million. Our current store openings and closing plans by chain are as follows:
Actual | Projected | Projected | Projected | Projected | |||
Jan 2015 | New | Conversions | Closings | Jan 2016 | |||
Journeys Group | 1,182 | 58 | (22) | 1,218 | |||
Journeys stores (U.S.) | 799 | 20 | (6) | 813 | |||
Journeys stores (Canada) | 35 | 8 | 0 | 43 | |||
Journeys Kidz stores | 189 | 30 | (4) | 215 | |||
Shï by Journeys | 49 | 0 | (2) | 47 | |||
Underground by Journeys | 110 | 0 | (10) | 100 | |||
Johnston & Murphy Group | 170 | 11 | (3) | 178 | |||
Schuh Group | 108 | 22 | (1) | 129 | |||
Schuh Stores | 102 | 18 | (1) | 119 | |||
Schuh Kids | 6 | 4 | 0 | 10 | |||
Lids Sports Group | 1,364 | 25 | 0 | (8) | 1,381 | ||
Lids hat stores (U.S.) | 815 | 15 | (3) | 827 | |||
Lids hat stores (Canada) | 117 | 5 | (3) | 0 | 119 | ||
Lids Locker Room, Locker Room by Lids in Macy’s stores & Lids Clubhouse | 432 | 5 | 3 | (5) | 435 | ||
Total Permanent Stores | 2,824 | 116 | 0 | (34) | 2,906 | ||
Schuh “pop-up” stores | 0 | 0 | 0 | 0 | 0 | ||
Total Stores | 2,824 | 116 | 0 | (34) | 2,906 | ||
Exhibit 99.2
Comparable Sales Assumptions in Fiscal 2016 Guidance
Our guidance for Fiscal 2016 assumes comparable sales (including both same store sales and comparable direct sales) for the fourth quarter for each retail segment by quarter as follows:
Guidance | Guidance | Guidance | Guidance | ||
Q1 | Q2 | Q3 | Q4 | FY16 | |
Journeys Group | 5 - 6% | 5 - 6% | 4 - 5% | 4 - 5% | 4 - 5% |
Lids Sports Group | 2 - 3% | 4 - 5% | 3 - 4% | 3 - 4% | 3 - 4% |
Schuh Group | 4 - 5% | 3 - 4% | 2 - 3% | 2 - 3% | 3 - 4% |
Johnston & Murphy Group | 0 - 1% | 2 - 3% | 2 - 3% | 2 - 3% | 2 - 3% |
Total Genesco | 3 - 4% | 4 - 5% | 4 - 5% | 3 - 4% | 3 - 4% |
Cautionary Note Concerning Forward-Looking Statements
This presentation contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses (including, without limitation, sales, expenses, margins and earnings) and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to estimates reflected in forward-looking statements, including the timing and amount of non-cash asset impairments related to retail store fixed assets or to intangible assets of acquired businesses; the effectiveness of our omnichannel initiatives; the timing and effectiveness of plans to improve the performance of Lids Sports Group; weakness in the consumer economy; competition in the Company's markets; inability of customers to obtain credit; fashion trends that affect the sales or product margins of the Company's retail product offerings; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons; the effects of storms and other weather-related disruptions; and the performance of athletic teams, the participants in major sporting events such as the Super Bowl and World Series, developments with respect to certain individual athletes, and other sports-related events or changes that may affect period-to-period comparisons in the Company’s Lids Sports Group retail business. Additional factors that could affect the Company's prospects and cause differences from expectations include the ability to build, open, staff and support additional retail stores and to renew leases in existing stores and control occupancy costs, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences; unexpected changes to the market for the Company's shares; variations from expected pension-related charges caused by conditions in the financial markets; and the cost and outcome of litigation, investigations and environmental matters involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, our SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting
Exhibit 99.2
the investor relations department of Genesco via our website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this presentation are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.