Journeys performs well at Genesco

26 Nov '08

3 min read

Genesco Inc reported earnings from continuing operations of $9.5 million, or $0.43 per diluted share, for the third quarter ended November 1, 2008. These results include $2.5 million of restructuring charges and merger-related expenses, offset by an approximately equivalent after-tax amount of favorable adjustment to the Company's provision for income taxes.

In the third quarter last year, the Company reported earnings from continuing operations of $5.6 million, or $0.23 per diluted share. Last year's results included $6.2 million of merger-related and restructuring expenses. Adjusting for these items, earnings from continuing operations would have been $10.0 million, or $0.39 per diluted share, in the third quarter last year.

Because of the magnitude of the merger-related expenses in last year's results and for consistency with this year's previously announced results and earnings expectations, which excluded the listed items, the Company believes that disclosure of earnings from continuing operations adjusted for these 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 on Schedule B to this press release.

Net sales for the third quarter of fiscal 2009 increased by 5% to $390 million, compared to net sales for the third quarter of the previous year of $372 million. Comparable store sales for the Company increased 2%.

Genesco President and Chief Executive Officer Robert J. Dennis said, "Our third quarter results reflect solid performances at Journeys, Hat World and Dockers, partially offset by challenges at Johnston & Murphy."

"Net sales in the Journeys Group grew 10% from the prior year period to $201 million. Same store sales for the Journeys Group were up 5% for the quarter and same store sales in the Journeys stores were up 4%, compared to a 3% decline last year. Footwear unit comps in Journeys rose 2% and average selling price increased 4% in the quarter. The solid results were driven by continued strength in Journeys' skate and women's boot business.

"Net sales in the Hat World Group increased 6% from the prior year period to approximately $93 million and same store sales increased 2% in the third quarter, with urban stores up 4% and non-urban stores up 2%. Core and fashion Major League Baseball performed well and action brands were also very strong. Hat World once again generated significant operating margin expansion in the quarter.

"Net sales for the Underground Station Group were $24 million for the third quarter. Same store sales increased 1% from the prior year period and footwear unit comps rose 10%. Despite the modest comp gain, Underground Station essentially met its profit expectations due to better than expected gross margins driven by changes in product mix.

"Johnston & Murphy Group's net sales were approximately $42 million, with wholesale sales down 2% from the third quarter last year. Same store sales for the Johnston & Murphy shops declined 16% from the prior year period. Johnston & Murphy's business continues to be negatively affected by the economic climate.

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