Revenues up 33% at Genesco in Q3
Genesco Inc. reported earnings from continuing operations for the third quarter ended October 29, 2011, of $26.2 million, or $1.09 per diluted share, compared to earnings from continuing operations of $17.0 million, or $0.72 per diluted share, for the third quarter ended October 30, 2010.
Fiscal 2012 third quarter results reflect pretax items of $3.4 million, or $0.12 per diluted share after tax, including compensation expense related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited in June 2011, acquisition expenses and other legal matters.
As previously announced, because the obligation to pay the deferred purchase price for Schuh is contingent upon the continued employment of the payees, U.S. Generally Accepted Accounting Principles require that it be treated as compensation expense. Fiscal 2011 third quarter results were reduced by pretax items totaling $3.1 million, or $0.05 per diluted share, after tax, primarily related to fixed asset impairments and purchase price accounting adjustments.
Adjusted for the items described above in both periods, earnings from continuing operations were $29.1 million, or $1.21 per diluted share, for the third quarter of Fiscal 2012, compared to earnings from continuing operations of $18.1 million, or $0.77 per diluted share, for the third quarter of Fiscal 2011.
For consistency with Fiscal 2012'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.
Additionally, the Company believes that the presentation of earnings from continuing operations before the compensation expense associated with the Schuh deferred purchase price will enable investors to understand the effect attributable to incorporating a continuing employment condition into the obligation to pay deferred purchase price.
Since the compensation expense is a non-cash charge until the deferred purchase price is actually paid, earnings including such expense may not be fully reflective of the Company's ongoing results or indicative of its prospects.
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 third quarter of Fiscal 2012 increased 33% to $616.5 million from $464.8 million in the third quarter of Fiscal 2011.Comparable store sales in the third quarter of Fiscal 2012 increased by 12%. The Lids Sports Group's comparable store sales increased by 8%, the Journeys Group increased by 15%, Johnston & Murphy Retail increased by 7%, and Underground Station increased by 14%.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, "Our third quarter operating performance was exceptionally strong, highlighted by significant gains in sales and profitability.