Tuesday August 19 8:12 AM EDT
Company Press Release
Source: Genesco Inc.
Genesco Reports Second Quarter Earnings
EPS Climbs 88% On 17% Sales Increase
NASHVILLE, Tenn., Aug. 19 /PRNewswire/ -- Genesco Inc. (NYSE:GCO) today reported results for the second quarter
ended August 2, 1997, with sales up 17%, pretax earnings up 86%, and net earnings up 99% over last year's second quarter.
Earnings per share were $0.15 per share, up 88% from $0.08 per share in the same quarter last year.
Net sales for the quarter ended August 2, 1997, increased 17% to $120.0 million from $103.0 million a year ago. Pretax
earnings for the second period increased to $4.2 million from $2.3 million a year ago. Net earnings for the second quarter rose
to $4.1 million, or $0.15 per share, compared with $2.1 million, or $0.08 per share, in the second quarter last year.
For the six months ended August 2, 1997, net sales increased 15% to $234.2 million from $203.2 million in the comparable
period last year. Pretax earnings for the first half of the fiscal year increased 132% to $6.4 million, from $2.8 million for the six
months ended August 3, 1996. Net earnings for the period rose 108% to $6.3 million, or $0.23 per share, compared with
$3.0 million, or $0.11 per share in the prior year.
Ben T. Harris, president and chief executive officer of Genesco, said, ``We are pleased to report another excellent quarter. The
strength of our retail operations, particularly our Journeys and Johnston & Murphy retail divisions, continues to drive our overall
sales and earnings gains. Total retail sales increased 29% in the second quarter, boosted by same store sales gains of 21% in
Journeys and 17% in Johnston & Murphy stores. Same store sales for the Company's overall retail operations rose 13% in the
quarter.
``In the wholesale division, sales in the quarter decreased 2%. This decline reflected the continuing weakness of the western
boot business, where we have taken further steps to reduce fixed costs. The decline also reflects the generally conservative
inventory positions taken by our wholesale customers relative to last year. We have received positive customer response to our
Johnston & Murphy and Dockers Footwear lines in the form of strong sell-through and we expect that this will translate into
increased reorders as retail inventory positions improve, assuming a healthy retail climate through the second half. Finally,
wholesale results were also impacted by lower tanned leather sales.
``There was a lot of excitement in our Nautica division in the second quarter. Nautica sales were particularly strong, more than
doubling this year versus last year. We launched our second generation of Nautica Competition athletic footwear in early
August and initial reception in the market has been encouraging.''
Harris continued, ``We are ahead of schedule on store openings. In the second quarter we opened 24 new Journeys stores and
two Johnston & Murphy stores. Over the last 12 months, we have opened a net of 81 new retail stores, bringing our total retail
store count to 556, including 160 Journeys stores. The overall solid performance of the new stores and our continued growth in
same store sales in all our chains show that our approach to retail merchandising has worked well.''
The forward looking statements in this release involve a number of risks and uncertainties. Actual results could be materially
different. The factors that could cause materially different results include the general retail environment affecting our stores and
those of our wholesale customers, our ability to open, staff and support additional retail stores on schedule, the cost and
availability of externally sourced products, the Company's ability to implement strategies to deal successfully with continuing
weakness in the western boot and military leather markets and with any adverse changes in the other markets which it operates,
and the outcome of litigation and environmental matters involving the Company.
Genesco, based in Nashville, markets and distributes branded shoes and boots. The Company also operates the Volunteer
Leather Company. Genesco's owned and licensed footwear brands, sold through both wholesale and retail channels of
distribution, include Johnston & Murphy, Dockers Footwear and Nautica Footwear, and Laredo, Code West and Larry
Mahan boots. Genesco's products are sold at wholesale to more than 4,000 retailers, including the Company's own network of
556 footwear retail stores in the U.S., operated principally under the names Jarman, Journeys and Johnston & Murphy.
GENESCO INC.
Consolidated Earnings Summary
Three Months Ended Six Months Ended
August 2, August 3, August 2, August 3,
In Thousands 1997 1996 1997 1996
Net sales $120,024 $102,955 $234,209 $203,174
Cost of sales 70,896 62,142 137,209 121,773
Selling and administrative
expenses 43,108 36,389 86,539 74,195
Restructuring income and
other charges, net (275) 0 (275) 0
Earnings from operations
before other income
and expenses 6,295 4,424 10,736 7,206
Other expenses (income):
Interest expense, net 2,167 2,109 4,296 4,311
Other expense (income) (49) 64 64 143
Total other expenses, net 2,118 2,173 4,360 4,454
Earnings before income taxes
and discontinued operations 4,177 2,251 6,376 2,752
Income tax expense (benefit) 44 28 61 (437)
Earnings before discontinued
operations 4,133 2,223 6,315 3,189
Discontinued operations 0 (150) 0 (150)
Net Earnings 4,133 2,073 6,315 3,039
Earnings Per Share Information
Three Months Ended Six Months Ended
August 2, August 3, August 2, August 3,
In Thousands 1997 1996 1997 1996
(except per share amounts)
Preferred dividend requirements $75 $76 $150 $151
Average common and common
equivalent shares 27,149 25,599 26,791 25,348
Earnings per share:
Earnings before discontinued
operations $ .15 $ .08 $ .23 $ .12
Discontinued operations $ .00 $ .00 $ .00 $ (.01)
Net earnings $ .15 $ .08 $ .23 $ .11
Consolidated Earnings Summary
Three Months Ended Six Months Ended
August 2, August 3, August 2, August 3,
In Thousands 1997 1996 1997 1996
Sales:
Footwear retail $79,918 $61,847 $149,942 $120,882
Footwear wholesale and
manufacturing 40,106 41,108 84,267 82,292
Total Sales $120,024 $102,955 $234,209 $203,174
Pretax Earnings:
Footwear retail $7,498 $4,244 $13,256 $7,428
Footwear wholesale and
manufacturing 1,428* 2,299 2,581* 3,791
Corporate and other expenses (2,582) (2,183) (5,165) (4,156)
Operating income 6,344 4,360 10,672 7,063
Interest, net 2,167 2,109 4,296 4,311
Total Pretax Earnings 4,177 2,251 6,376 2,752
Income tax expense (benefit) 44 28 61 (437)
Earnings before discontinued
operations 4,133 2,223 6,315 3,189
Discontinued operations 0 (150) 0 (150)
Net Earnings 4,133 2,073 6,315 3,039
* Includes restructuring gains of $1.1 million partially offset by an impairment loss of $.8 million. In addition, the second quarter
includes $.5 million of severance.
Consolidated Balance Sheet
August 2, August 3,
In Thousands 1997 1996
Assets
Cash and short-term investments $17,624 $30,560
Accounts receivable 31,738 35,389
Inventories 123,466 94,456
Other current assets 3,817 3,697
Total current assets 176,645 164,102
Plant, equipment and capital leases 41,378 30,285
Other non-current assets 9,483 12,102
Total Assets $227,506 $206,489
Liabilities and Shareholders' Equity
Total current liabilities 58,826 53,541
Long-term debt and capital leases 75,082 76,063
Other long-term liabilities 23,023 39,357
Shareholders' equity 70,575 37,528
Total Liabilities and
Shareholders' Equity $227,506 $206,489
SOURCE: Genesco Inc. |
