Genesco Reports Second Quarter Sales Increase 16%, EPS of $0.26 Vs. $0.24 Last Year
NASHVILLE, Tenn., Aug. 28 /PRNewswire/ -- Genesco Inc. (NYSE: GCO) today reported earnings before discontinued operations of $6.2 million, or $0.26 per diluted share, for the second quarter ended August 4, 2001, compared with $5.5 million, or $0.24 per diluted share, for the second quarter last year. Net sales for the quarter increased 16% to $166.5 million from $143.2 million in the second quarter a year ago.
Genesco Chairman and Chief Executive Officer Ben T. Harris said, "Journeys' net sales increased by 36% during the second quarter to $81.0 million, and same store sales rose 1%. We ended the quarter with 462 Journeys stores. We have seen significant improvements in Journeys' business over the past five weeks, where same store sales are running up approximately 15% month to date. We're confident that Journeys' robust performance so far in August bodes well for the remainder of the year, as a strong back to school traditionally indicates that the product mix is appropriate for the Fall and Holiday seasons."
Harris continued, "Johnston & Murphy's net sales were $42.8 million for the second quarter, a 4% decrease from last year, and same stores sales declined 9%. While this business continues to be challenging in a highly promotional market, we believe it is stable, and we are working to increase sales, manage inventories and control expenses.
"Net sales in our Jarman group increased 12% to $23.0 million for the quarter. Same store sales declined 11% for the group, with Underground Station outperforming the Jarman stores. The new Jarman management team's efforts are beginning to be evident in the division's performance, with same store sales for the group running essentially flat so far this quarter. We are excited about the new management team's progress and we continue to view Underground Station as a significant opportunity for future growth.
"The Licensed Brands segment's net sales grew by 7% during the quarter, which marked the end of a successful shutdown of the Nautica Footwear business.
"Dockers Footwear continues to outperform our expectations, as net sales increased 23% to $17.9 million in the quarter. These results were particularly encouraging because they came on top of a 35% sales gain last year. We believe Dockers' continued success is a function of providing the marketplace with updated, traditional footwear at a great value with a powerful brand name."
For the six months ended August 4, 2001, earnings before discontinued operations were $14.5 million, or $0.60 per diluted share, compared with $11.7 million, or $0.50 per diluted share, last year. Net sales for the six months increased 17% to $338.5 million from $289.9 million for the same period a year ago.
Harris concluded, "We remain confident that by focusing on offering our customer the right products in the right shopping environments we will continue to lead our industry. The strong start to the third quarter reinforces our outlook for the balance of the year."
This release contains forward-looking statements, including those dealing with expectations for the Company's and each division's performance during the second half of the 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 further weakening 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, the inability to adjust inventory levels to sales and changes in business strategies by the Company's competitors. Any greater than expected weakness in demand or disruption in supply could have an especially pronounced effect on the Company's performance in the second half of the year, because of the importance of the Holiday selling season. 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 August 28, 2001, 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 second quarter and its current expectations for the third quarter and fiscal year ending February 2, 2002, 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 831 retail stores in the U.S., principally under the names Journeys, 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(A)
Three Months Ended Six Months Ended
August 4, July 29, August 4, July 29,
In Thousands 2001 2000 2001 2000
Net sales $166,543 $143,243 $338,461 $289,887
Cost of sales 88,242 74,277 178,063 152,615
Selling and administrative
expenses 66,804 58,093 134,016 114,527
Restructuring credit(B) (269) -- (269) --
Earnings from operations
before interest 11,766 10,873 26,651 22,745
Interest expense, net 1,888 1,832 3,423 3,514
Earnings before income taxes and
discontinued operations 9,878 9,041 23,228 19,231
Income tax expense 3,695 3,510 8,707 7,507
Earnings before discontinued
operations 6,183 5,531 14,521 11,724
Discontinued operations
(net of tax):
Operating income (loss) -- 6 -- (226)
Provision for discontinued
operations -- (2,975) -- (2,975)
Net Earnings $6,183 $2,562 $14,521 $8,523
(A) Certain reclassifications have been made to prior periods to account
for shipping and handling fees as revenue.
(B) Adjustment to Nautica closedown provision including a $0.1 million
reversal of inventory write-down.
Earnings Per Share Information
Three Months Ended Six Months Ended
August 4, July 29, August 4, July 29,
In Thousands (except per 2001 2000 2001 2000
share amounts)
Preferred dividend
requirements $73 $75 $147 $150
Average common shares -
Basic EPS 21,962 21,496 21,904 21,542
Basic earnings per share:
Before discontinued
operations $0.28 $0.25 $0.66 $0.54
Net earnings $0.28 $0.12 $0.66 $0.39
Average common and common
equivalent shares -
Diluted EPS 27,455 27,014 27,383 27,004
Diluted earnings per share:
Before discontinued
operations $0.26 $0.24 $0.60 $0.50
Net earnings $0.26 $0.13 $0.60 $0.38
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended Six Months Ended
August 4, July 29, August 4, July 29,
In Thousands 2001 2000 2001 2000
Sales:
Journeys $81,047 $59,796 $161,395 $117,892
Jarman 22,956 20,498 48,027 41,518
Johnston & Murphy 42,774 44,519 84,587 88,987
Licensed Brands(A) 19,766 18,430 44,452 41,490
Net Sales 166,543 143,243 338,461 289,887
Pretax Earnings (Loss):
Journeys $9,330 $6,569 $19,405 $13,081
Jarman (1,032) 450 (101) 1,193
Johnston & Murphy 4,532 5,632 8,658 11,305
Licensed Brands(B) 2,055 974 4,990 2,607
Corporate and Other (2,938) (2,752) (6,120) (5,271)
Nonrecurring charges(C) (181) -- (181) (170)
Operating income 11,766 10,873 26,651 22,745
Interest, net 1,888 1,832 3,423 3,514
Total Pretax Earnings 9,878 9,041 23,228 19,231
Income tax expense 3,695 3,510 8,707 7,507
Earnings before
discontinued operations 6,183 5,531 14,521 11,724
Discontinued operations
(net of tax):
Operating income (loss) -- 6 -- (226)
Provision for discontinued
operations -- (2,975) -- (2,975)
Net Earnings $6,183 $2,562 $14,521 $8,523
(A) Includes Nautica sales of $1.8 million, $3.8 million, $6.0 million and
$11.6 million for the second quarter and six months of Fiscal 2002 and
2001, respectively.
(B) Includes Nautica operating losses of $0.3 million, $0.8 million,
$0.6 million and $1.2 million for the second quarter and six months of
Fiscal 2002 and 2001, respectively.
(C) Includes litigation and severance charges in the second quarter of
Fiscal 2002 and the six months of Fiscal 2002 and 2001 offset by an
adjustment to the Nautica closedown provision of $0.3 million in the
second quarter and six months of Fiscal 2002.
GENESCO INC.
Consolidated Balance Sheet
August 4, July 29,
In Thousands 2001 2000
Assets
Cash and short-term investments $24,513 $38,275
Accounts receivable 27,053 23,957
Inventories 182,216 140,562
Other current assets 26,665 23,980
Current assets of discontinued operations* -- 6,232
Total current assets 260,447 233,006
Plant, equipment and capital leases 95,971 79,609
Other non-current assets 19,987 16,893
Non-current assets of discontinued operations* 605 669
Total Assets $377,010 $330,177
Liabilities and Shareholders' Equity
Total current liabilities 103,899 98,989
Long-term debt and capital leases 103,272 103,530
Other long-term liabilities 11,198 11,525
Shareholders' equity 158,641 116,133
Total Liabilities and Shareholders' Equity $377,010 $330,177
-
Current and non-current assets of discontinued operations include Volunteer Leather.
GENESCO INC.
Retail Units Operated - Six Months Ended August 4, 2001
Balance Balance
2/3/01 Open Conversions Close 8/4/01
Journeys 425 38 1 462
Journeys Kidz 0 8 8
Jarman Group 207 17 0 7 217
Jarman Retail 150 (6) 6 138
Underground
Station 57 17 6 1 79
Johnston &
Murphy 147 2 0 5 144
Shops 115 2 5 112
Factory
Outlets 32 32
Total Retail
Units 779 65 0 13 831
Retail Units Operated - Three Months Ended August 4, 2001
Balance Balance
5/5/01 Open Conversions Close 8/4/01
Journeys 447 16 1 462
Journeys Kidz 5 3 8
Jarman Group 213 7 0 3 217
Jarman Retail 143 (3) 2 138
Underground
Station 70 7 3 1 79
Johnston &
Murphy 145 2 0 3 144
Shops 113 2 3 112
Factory
Outlets 32 32
Total Retail
Units 810 28 0 7 831
Constant Store Sales
Three Months Ended Six Months Ended
August 4, July 29, August 4, July 29,
2001 2000 2001 2000
Journeys 1% 8% 6% 14%
Jarman Group -11% 2% -7% 5%
Jarman Retail -12% -1% -9% 2%
Underground Station -4% 29% 1% 34%
Johnston & Murphy -9% 5% -9% 5%
Shops -9% 7% -9% 6%
Factory Outlets -6% 0% -10% 2%
Total Constant Store Sales -3% 6% 0% 10%
SOURCE Genesco Inc.
CONTACT: James S. Gulmi, +1-615-367-8325, or Claire S. McCall, +1-615-367-8283, both of Genesco Inc./