Analysts Issue Mixed Outlook for Genesco

Skate downturn could impact retailer, insiders said.

LOS ANGELES — Analysts said troubles in the economy and uncertainty in the skate market could hinder Genesco Inc.’s earnings prospects until late in the year, even after the company beat expectations during its second quarter.

“We worry about the skate shoe category in general, which is a big part of Journeys’ mix,” Robert W. Baird & Co. analyst Mitch Kummetz wrote in an earnings note. “[Genesco’s] performance is now being adversely affected by the difficult economic environment, and although the company is performing relatively well, we don’t expect [it] to exhibit quarterly earnings growth until the fourth quarter at the earliest.”

For his part, Robert Dennis, Genesco’s president and CEO, said during an earnings call last week that he was encouraged by the company’s ability to narrow its loss in the second quarter. “We were pleased with our bottom line performance ... given that sales remain choppy,” he said.

For the three months ended Aug. 1, the Nashville, Tenn.-based company reported a net loss of $2.7 million, or 13 cents a diluted share. Adjusted for impairments in both periods, Genesco’s net loss for the quarter totaled $400,000, or 2 cents a share.

Sales dropped 5 percent to $334.7 million. The company’s total comparable-store sales fell 8 percent, which included a 9 percent decrease for the Journeys Group. Footwear unit comps fell 9.4 percent in Journeys stores, but the average selling price increased 1.8 percent.

Dennis said the chain had adopted a more promotional position heading into fall, citing the wider distribution plans of some vendors, which is increasing competition. Nevertheless, he said he felt positive about the retailer’s product assortment. “We believe Journeys [is heading] into back-to-school with a compelling merchandise position,” he said.

Same-store sales at Underground Station, the Hat World Group and the Johnston & Murphy Group, dropped 19 percent, 2 percent and 16 percent, respectively.

load comments


Sign in using your Facebook or Twitter account, or simply type your comment below as a guest by entering your email and name. Your email address will not be shared. Please note that WWD reserves the right to remove profane, distasteful or otherwise inappropriate language.
News from WWD

Sign upSign up for WWD and FN newsletters to receive daily headlines, breaking news alerts and weekly industry wrap-ups.

getIsArchiveOnly= hasAccess=false hasArchiveAccess=false