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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Genesco Inc | NYSE:GCO | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 3.60 | 11.39% | 35.20 | 35.75 | 32.45 | 32.70 | 257,597 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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(Address of Principal Executive Offices) |
(Zip Code) |
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(
Registrant's telephone number, including area code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of exchange on which registered |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On May 31, 2024, Genesco Inc. issued a press release announcing results of operations for the first fiscal quarter ended May 4, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
On May 31, 2024, the Company also posted on its website, www.genesco.com, a slide presentation with summary results. A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the press release furnished herewith contains non-GAAP financial measures, including adjusted gross margin, operating income (loss), pretax earnings (loss), earnings (loss) from continuing operations and earnings (loss) per share from continuing operations, as discussed in the text of the release and as detailed on the reconciliation schedule attached to the press release. For consistency and ease of comparison with the adjusted results for the prior period announced last year, the Company believes that disclosure of the non-GAAP measures will be useful to investors.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
The following exhibits are furnished herewith:
Exhibit Number |
|
Description |
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99.1 |
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|
|
|
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99.2 |
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Genesco Inc. First Fiscal Quarter ended May 4, 2024 Summary Results |
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104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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GENESCO INC. |
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||
Date: May 31, 2024 |
|
By: |
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/s/ Thomas A. George |
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Name: |
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Thomas A. George |
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Title: |
|
Senior Vice President and Chief Financial Officer |
Exhibit 99.1
GENESCO INC. REPORTS FISCAL 2025 FIRST QUARTER RESULTS
Top and Bottom-Line Results Exceed Expectations, Led by Journeys
Reaffirms Fiscal 2025 Outlook
NASHVILLE, Tenn., May 31, 2024 --- Genesco Inc. (NYSE: GCO) today reported first quarter results for the three months ended May 4, 2024.
First Quarter Fiscal 2025 Financial Summary
Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “Against continued headwinds in the operating environment, we executed to our strategic plan to deliver top and bottom-line results that were ahead of our expectations, led by our Journeys business. With new Journeys leadership in place, I am encouraged by the traction we are seeing thus far, as we work to dramatically accelerate the improvement, elevate our product assortments and enhance the experience for our consumers. In the meantime, our efforts to reduce costs and optimize our store portfolio are resulting in a leaner, more productive operating model, which will provide a nice profit tailwind as our sales improve.”
She continued, “While we have more work ahead of us, with an outstanding team in place, a strong track record of evolving and improving our businesses, and multiple initiatives already in progress, we are well positioned to unlock Journeys’ considerable earnings potential and drive value.”
_____________________
1Excludes a gross margin charge related to a distribution model transition in Genesco Brands Group, net of tax effect, and charges for severance and asset impairments, net of tax effect in the first quarter of Fiscal 2025 (“Excluded Items”). A reconciliation of loss and loss per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) with the adjusted loss and loss per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of loss and loss per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
First Quarter Review
Net sales for the first quarter of Fiscal 2025 of $458 million decreased 5% compared to $483 million in the first quarter of Fiscal 2024. The sales decrease was driven by a decline in store sales, decreased wholesale sales and the impact of net store closings, partially offset by a 3% increase in e-commerce comparable sales and a favorable foreign exchange impact. Excluding the impact of lower foreign exchange rates, net sales decreased 6% for the first quarter of Fiscal 2025 compared to the first quarter of Fiscal 2024.
Comparable Sales |
||
|
|
|
Comparable Same Store and E-commerce Sales: |
1QFY25 |
1QFY24 |
Journeys Group |
(5)% |
(14)% |
Schuh Group |
(7)% |
13% |
Johnston & Murphy Group |
(3)% |
18% |
Total Genesco Comparable Sales |
(5)% |
(5)% |
Same Store Sales |
(7)% |
(8)% |
Comparable E-commerce Sales |
3% |
7% |
The overall sales decrease of 5% for the first quarter of Fiscal 2025 compared to the first quarter of Fiscal 2024 was driven by a decrease of 5% at Journeys, a decrease of 1% at Schuh, a decrease of 4% at Johnston & Murphy and a 25% or $9 million decrease at Genesco Brands.
On a constant currency basis, Schuh sales were down 4% for the first quarter this year.
First quarter gross margin this year was 47.3%, flat compared with last year. Adjusted gross margin for the first quarter this year increased 30 basis points as a percentage of sales compared to last year. The increase as a percentage of sales compared to Fiscal 2024 is due primarily to fewer markdowns at Journeys and a greater mix of direct to consumer sales, partially offset by brand mix shift at Schuh.
Selling and administrative expense for the first quarter this year increased 220 basis points as a percentage of sales compared with last year. The increase as a percentage of sales compared to Fiscal 2024 reflects the deleverage of expenses, especially occupancy expense, selling salaries, professional fees and depreciation expense as a result of decreased revenue in the first quarter of Fiscal 2025. In absolute dollars, selling and administrative expense declined in the first quarter this year compared to last year, reflecting the impact of our cost savings initiatives, including store closures.
Genesco’s GAAP operating loss for the first quarter was $32.1 million, or 7.0% of sales this year, compared with $23.0 million, or 4.8% of sales in the first quarter last year. Adjusted for the Excluded Items in all periods, the operating loss for the first quarter was $30.0 million this year compared to $22.7 million last year. Adjusted operating margin was a loss of 6.5% of sales in the first quarter of Fiscal 2025 compared to a loss of 4.7% in the first quarter last year.
The effective tax rate for the quarter was 26.7% in Fiscal 2025 compared to 23.7% in the first quarter last year. The adjusted tax rate, reflecting Excluded Items, was 26.0% in Fiscal 2025 compared to 23.3% in the first quarter last year. The higher adjusted tax rate for the first quarter this year compared to the first quarter last year reflects an increase in the applicable statutory tax rate in our U.K. jurisdiction from 24% to 25% and an increase in the amount of foreign losses for which we are unable to recognize a tax benefit.
GAAP loss from continuing operations was $24.3 million in the first quarter of Fiscal 2025 compared to $18.9 million in the first quarter last year. Adjusted for the Excluded Items in all periods, the first quarter loss from continuing operations was $22.9 million, or $2.10 per share, in Fiscal 2025, compared to $18.7 million, or $1.59 per share, in the first quarter last year.
Cash, Borrowings and Inventory
Cash as of May 4, 2024, was $19.2 million, compared with $31.8 million as of April 29, 2023. Total debt at the end of the first quarter of Fiscal 2025 was $59.4 million compared with $118.2 million at the end of last year’s first quarter. Inventories decreased 17% on a year-over-year basis, reflecting decreased inventory for Journeys and Johnston & Murphy, partially offset by small increases at Schuh and Genesco Brands.
Capital Expenditures and Store Activity
For the first quarter this year, capital expenditures were $6 million, related primarily to retail stores and digital and omnichannel initiatives. Depreciation and amortization was $13 million. During the quarter, the Company opened one store and closed 21 stores. The Company ended the quarter with 1,321 stores compared with 1,396 stores at the end of the first quarter last year, or a decrease of 5%. Square footage was down 4% on a year-over-year basis.
Share Repurchases
The Company did not repurchase any shares during the first quarter of Fiscal 2025. During the second quarter of Fiscal 2025, through May 30, 2024, the Company repurchased 7,700 shares for $0.2 million, or $24.90 per share. The Company currently has $51.9 million remaining on its expanded share repurchase authorization announced in June 2023.
Store Closing and Cost Savings Update
Fiscal 2025 Outlook
For Fiscal 2025, the Company:
__________________________
2A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to GAAP is included in Schedule B to this press release.
Conference Call, Management Commentary and Investor Presentation
The Company has posted detailed financial commentary and a supplemental financial presentation of first quarter results on its website, www.genesco.com, in the investor relations section. The Company's live conference call on May 31, 2024, at 7:30 a.m. (Central time), may be accessed through the Company's website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.
Safe Harbor Statement
This release contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “should,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events, including shipping disruptions in the Red Sea; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage
pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry;
competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address consumer demand; the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.
About Genesco Inc.
Genesco Inc. (NYSE: GCO) is a footwear focused company with distinctively positioned retail and lifestyle brands and proven omnichannel capabilities offering customers the footwear they desire in engaging shopping environments, including approximately 1,320 retail stores and branded e-commerce websites. Its Journeys, Little Burgundy and Schuh brands serve teens, kids and young adults with on-trend fashion footwear that inspires youth culture in the U.S., Canada and the U.K. Johnston & Murphy serves the successful, affluent man and woman with premium footwear, apparel and accessories in the U.S. and Canada, and Genesco Brands Group sells branded lifestyle footwear to leading retailers under licensed brands including Levi’s, Dockers and G.H. Bass. Founded in 1924, Genesco is based in Nashville, Tennessee. For more information on Genesco and its operating divisions, please visit www.genesco.com.
Genesco Financial Contact Genesco Media Contact
Thomas A. George Claire S. McCall
(615) 367-7465 (615) 367-8283
tgeorge@genesco.com cmccall@genesco.com
GENESCO INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
|
|
Quarter 1 |
|
|
Quarter 1 |
|
||||||||||
|
|
May 4, |
|
|
% of |
|
|
April 29, |
|
|
% of |
|
||||
Net sales |
|
$ |
457,597 |
|
|
|
100.0 |
% |
|
$ |
483,332 |
|
|
|
100.0 |
% |
Cost of sales |
|
|
241,316 |
|
|
|
52.7 |
% |
|
|
254,524 |
|
|
|
52.7 |
% |
Gross margin(1) |
|
|
216,281 |
|
|
|
47.3 |
% |
|
|
228,808 |
|
|
|
47.3 |
% |
Selling and administrative expenses |
|
|
247,831 |
|
|
|
54.2 |
% |
|
|
251,497 |
|
|
|
52.0 |
% |
Asset impairments and other, net(2) |
|
|
578 |
|
|
|
0.1 |
% |
|
|
308 |
|
|
|
0.1 |
% |
Operating loss |
|
|
(32,128 |
) |
|
|
-7.0 |
% |
|
|
(22,997 |
) |
|
|
-4.8 |
% |
Other components of net periodic benefit cost |
|
|
109 |
|
|
|
0.0 |
% |
|
|
92 |
|
|
|
0.0 |
% |
Interest expense, net |
|
|
890 |
|
|
|
0.2 |
% |
|
|
1,651 |
|
|
|
0.3 |
% |
Loss from continuing operations before income taxes |
|
|
(33,127 |
) |
|
|
-7.2 |
% |
|
|
(24,740 |
) |
|
|
-5.1 |
% |
Income tax benefit |
|
|
(8,839 |
) |
|
|
-1.9 |
% |
|
|
(5,865 |
) |
|
|
-1.2 |
% |
Loss from continuing operations |
|
|
(24,288 |
) |
|
|
-5.3 |
% |
|
|
(18,875 |
) |
|
|
-3.9 |
% |
Loss from discontinued operations, net of tax |
|
|
(59 |
) |
|
|
0.0 |
% |
|
|
(15 |
) |
|
|
0.0 |
% |
Net Loss |
|
$ |
(24,347 |
) |
|
|
-5.3 |
% |
|
$ |
(18,890 |
) |
|
|
-3.9 |
% |
Basic loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Before discontinued operations |
|
$ |
(2.22 |
) |
|
|
|
|
$ |
(1.60 |
) |
|
|
|
||
Net loss |
|
$ |
(2.23 |
) |
|
|
|
|
$ |
(1.60 |
) |
|
|
|
||
Diluted loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Before discontinued operations |
|
$ |
(2.22 |
) |
|
|
|
|
$ |
(1.60 |
) |
|
|
|
||
Net loss |
|
$ |
(2.23 |
) |
|
|
|
|
$ |
(1.60 |
) |
|
|
|
||
Weighted-average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
10,930 |
|
|
|
|
|
|
11,818 |
|
|
|
|
||
Diluted |
|
|
10,930 |
|
|
|
|
|
|
11,818 |
|
|
|
|
||
GENESCO INC.
Sales/Earnings Summary by Segment
(in thousands)
(Unaudited)
|
|
Quarter 1 |
|
|
Quarter 1 |
|
||||||||||
|
|
May 4, |
|
|
% of |
|
|
April 29, |
|
|
% of |
|
||||
Sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Journeys Group |
|
$ |
259,445 |
|
|
|
56.7 |
% |
|
$ |
272,190 |
|
|
|
56.3 |
% |
Schuh Group |
|
|
92,349 |
|
|
|
20.2 |
% |
|
|
93,105 |
|
|
|
19.3 |
% |
Johnston & Murphy Group |
|
|
79,207 |
|
|
|
17.3 |
% |
|
|
82,627 |
|
|
|
17.1 |
% |
Genesco Brands Group |
|
|
26,596 |
|
|
|
5.8 |
% |
|
|
35,410 |
|
|
|
7.3 |
% |
Net Sales |
|
$ |
457,597 |
|
|
|
100.0 |
% |
|
$ |
483,332 |
|
|
|
100.0 |
% |
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Journeys Group |
|
$ |
(18,822 |
) |
|
|
-7.3 |
% |
|
$ |
(18,362 |
) |
|
|
-6.7 |
% |
Schuh Group |
|
|
(5,896 |
) |
|
|
-6.4 |
% |
|
|
(1,790 |
) |
|
|
-1.9 |
% |
Johnston & Murphy Group |
|
|
2,355 |
|
|
|
3.0 |
% |
|
|
4,806 |
|
|
|
5.8 |
% |
Genesco Brands Group(1) |
|
|
(986 |
) |
|
|
-3.7 |
% |
|
|
(32 |
) |
|
|
-0.1 |
% |
Corporate and Other(2) |
|
|
(8,779 |
) |
|
|
-1.9 |
% |
|
|
(7,619 |
) |
|
|
-1.6 |
% |
Operating loss |
|
|
(32,128 |
) |
|
|
-7.0 |
% |
|
|
(22,997 |
) |
|
|
-4.8 |
% |
Other components of net periodic benefit cost |
|
|
109 |
|
|
|
0.0 |
% |
|
|
92 |
|
|
|
0.0 |
% |
Interest expense, net |
|
|
890 |
|
|
|
0.2 |
% |
|
|
1,651 |
|
|
|
0.3 |
% |
Loss from continuing operations before income taxes |
|
|
(33,127 |
) |
|
|
-7.2 |
% |
|
|
(24,740 |
) |
|
|
-5.1 |
% |
Income tax benefit |
|
|
(8,839 |
) |
|
|
-1.9 |
% |
|
|
(5,865 |
) |
|
|
-1.2 |
% |
Loss from continuing operations |
|
|
(24,288 |
) |
|
|
-5.3 |
% |
|
|
(18,875 |
) |
|
|
-3.9 |
% |
Loss from discontinued operations, net of tax |
|
|
(59 |
) |
|
|
0.0 |
% |
|
|
(15 |
) |
|
|
0.0 |
% |
Net Loss |
|
$ |
(24,347 |
) |
|
|
-5.3 |
% |
|
$ |
(18,890 |
) |
|
|
-3.9 |
% |
GENESCO INC.
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
|
May 4, 2024 |
|
|
April 29, 2023 |
|
||
Assets |
|
|
|
|
|
||
Cash |
$ |
19,247 |
|
|
$ |
31,786 |
|
Accounts receivable |
|
50,119 |
|
|
|
54,068 |
|
Inventories |
|
392,671 |
|
|
|
470,763 |
|
Other current assets |
|
46,003 |
|
|
|
42,325 |
|
Total current assets |
|
508,040 |
|
|
|
598,942 |
|
Property and equipment |
|
233,601 |
|
|
|
239,120 |
|
Operating lease right of use assets |
|
420,133 |
|
|
|
477,962 |
|
Goodwill and other intangibles |
|
36,331 |
|
|
|
65,466 |
|
Non-current prepaid income taxes |
|
57,441 |
|
|
|
54,567 |
|
Other non-current assets |
|
51,871 |
|
|
|
59,255 |
|
Total Assets |
$ |
1,307,417 |
|
|
$ |
1,495,312 |
|
|
|
|
|
|
|
||
Liabilities and Equity |
|
|
|
|
|
||
Accounts payable |
$ |
108,847 |
|
|
$ |
143,814 |
|
Current portion operating lease liabilities |
|
125,450 |
|
|
|
131,830 |
|
Other current liabilities |
|
73,888 |
|
|
|
75,992 |
|
Total current liabilities |
|
308,185 |
|
|
|
351,636 |
|
Long-term debt |
|
59,444 |
|
|
|
118,151 |
|
Long-term operating lease liabilities |
|
345,670 |
|
|
|
399,374 |
|
Other long-term liabilities |
|
45,665 |
|
|
|
43,526 |
|
Equity |
|
548,453 |
|
|
|
582,625 |
|
Total Liabilities and Equity |
$ |
1,307,417 |
|
|
$ |
1,495,312 |
|
GENESCO INC.
Store Count Activity
|
Balance |
|
Open |
|
Close |
|
Balance |
|
Open |
|
Close |
|
Balance |
|
|||||||
Journeys Group |
|
1,130 |
|
|
27 |
|
|
94 |
|
|
1,063 |
|
|
1 |
|
|
17 |
|
|
1,047 |
|
Schuh Group |
|
122 |
|
|
3 |
|
|
3 |
|
|
122 |
|
|
0 |
|
|
0 |
|
|
122 |
|
Johnston & Murphy Group |
|
158 |
|
|
2 |
|
|
4 |
|
|
156 |
|
|
0 |
|
|
4 |
|
|
152 |
|
Total Retail Stores |
|
1,410 |
|
|
32 |
|
|
101 |
|
|
1,341 |
|
|
1 |
|
|
21 |
|
|
1,321 |
|
GENESCO INC.
Comparable Sales
|
Quarter 1 |
|
||||
|
May 4, |
|
April 29, |
|
||
Journeys Group |
|
-5 |
% |
|
-14 |
% |
Schuh Group |
|
-7 |
% |
|
13 |
% |
Johnston & Murphy Group |
|
-3 |
% |
|
18 |
% |
Total Comparable Sales |
|
-5 |
% |
|
-5 |
% |
Same Store Sales |
|
-7 |
% |
|
-8 |
% |
Comparable E-commerce Sales |
|
3 |
% |
|
7 |
% |
Schedule B
Genesco Inc.
Adjustments to Reported Loss from Continuing Operations
Three Months Ended May 4, 2024 and April 29, 2023
The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
|
Quarter 1 |
|
Quarter 1 |
|
||||||||||||||
|
May 4, 2024 |
|
April 29, 2023 |
|
||||||||||||||
In Thousands (except per share amounts) |
Pretax |
|
Net of |
|
Per Share |
|
Pretax |
|
Net of |
|
Per Share |
|
||||||
Loss from continuing operations, as reported |
|
|
$ |
(24,288 |
) |
$ |
(2.22 |
) |
|
|
$ |
(18,875 |
) |
$ |
(1.60 |
) |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross margin adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Charges related to distribution model transition |
$ |
1,581 |
|
|
1,151 |
|
|
0.10 |
|
$ |
— |
|
|
— |
|
|
0.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asset impairments and other adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Asset impairment charges |
$ |
244 |
|
|
178 |
|
|
0.02 |
|
$ |
308 |
|
|
233 |
|
|
0.02 |
|
Severance |
|
334 |
|
|
243 |
|
|
0.02 |
|
|
— |
|
|
— |
|
|
0.00 |
|
Total asset impairments and other adjustments |
$ |
578 |
|
|
421 |
|
|
0.04 |
|
$ |
308 |
|
|
233 |
|
|
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income tax expense adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tax impact share based awards |
|
|
|
130 |
|
|
0.01 |
|
|
|
|
(47 |
) |
|
0.00 |
|
||
Other tax items |
|
|
|
(345 |
) |
|
(0.03 |
) |
|
|
|
(55 |
) |
|
(0.01 |
) |
||
Total income tax expense adjustments |
|
|
|
(215 |
) |
|
(0.02 |
) |
|
|
|
(102 |
) |
|
(0.01 |
) |
||
Adjusted loss from continuing operations (1) and (2) |
|
|
$ |
(22,931 |
) |
|
(2.10 |
) |
|
|
$ |
(18,744 |
) |
|
(1.59 |
) |
||
Schedule B
Genesco Inc.
Adjustments to Reported Operating Income (Loss) and Gross Margin
Three Months Ended May 4, 2024 and April 29, 2023
|
Quarter 1 - May 4, 2024 |
|
|||||||
In Thousands |
Operating |
|
Asset Impair |
|
Adj Operating |
|
|||
Journeys Group |
$ |
(18,822 |
) |
$ |
— |
|
$ |
(18,822 |
) |
Schuh Group |
|
(5,896 |
) |
|
— |
|
|
(5,896 |
) |
Johnston & Murphy Group |
|
2,355 |
|
|
— |
|
|
2,355 |
|
Genesco Brands Group |
|
(986 |
) |
|
1,581 |
|
|
595 |
|
Corporate and Other |
|
(8,779 |
) |
|
578 |
|
|
(8,201 |
) |
Total Operating Loss |
$ |
(32,128 |
) |
$ |
2,159 |
|
$ |
(29,969 |
) |
% of sales |
|
-7.0 |
% |
|
|
|
-6.5 |
% |
|
|
Quarter 1 - April 29, 2023 |
|
|||||||
In Thousands |
Operating |
|
Asset Impair |
|
Adj Operating |
|
|||
Journeys Group |
$ |
(18,362 |
) |
$ |
— |
|
$ |
(18,362 |
) |
Schuh Group |
|
(1,790 |
) |
|
— |
|
|
(1,790 |
) |
Johnston & Murphy Group |
|
4,806 |
|
|
— |
|
|
4,806 |
|
Genesco Brands Group |
|
(32 |
) |
|
— |
|
|
(32 |
) |
Corporate and Other |
|
(7,619 |
) |
|
308 |
|
|
(7,311 |
) |
Total Operating Loss |
$ |
(22,997 |
) |
$ |
308 |
|
$ |
(22,689 |
) |
% of sales |
|
-4.8 |
% |
|
|
|
-4.7 |
% |
|
|
Quarter 1 |
|
||||
In Thousands |
May 4, 2024 |
|
April 29, 2023 |
|
||
Gross margin, as reported |
$ |
216,281 |
|
$ |
228,808 |
|
% of sales |
|
47.3 |
% |
|
47.3 |
% |
|
|
|
|
|
||
Charges related to distribution model transition |
|
1,581 |
|
|
— |
|
Total adjustments |
|
1,581 |
|
|
— |
|
|
|
|
|
|
||
Adjusted gross margin |
$ |
217,862 |
|
$ |
228,808 |
|
% of sales |
|
47.6 |
% |
|
47.3 |
% |
Schedule B
Genesco Inc.
Adjustments to Forecasted Earnings from Continuing Operations
Fiscal Year Ending February 1, 2025
In millions (except per share amounts) |
High Guidance Fiscal 2025 |
|
Low Guidance Fiscal 2025 |
|
||||||||
|
Net of Tax |
|
Per Share |
|
Net of Tax |
|
Per Share |
|
||||
Forecasted earnings from continuing operations |
$ |
9.0 |
|
$ |
0.80 |
|
$ |
4.0 |
|
$ |
0.36 |
|
|
|
|
|
|
|
|
|
|
||||
Charges related to distribution model transition |
|
1.2 |
|
|
0.10 |
|
|
1.2 |
|
|
0.10 |
|
|
|
|
|
|
|
|
|
|
||||
Asset impairments and other adjustments: |
|
|
|
|
|
|
|
|
||||
Asset impairments and other matters |
|
1.1 |
|
|
0.10 |
|
|
1.5 |
|
|
0.14 |
|
Total asset impairments and other adjustments (1) |
|
1.1 |
|
|
0.10 |
|
|
1.5 |
|
|
0.14 |
|
Adjusted forecasted earnings from continuing operations (2) |
$ |
11.3 |
|
$ |
1.00 |
|
$ |
6.7 |
|
$ |
0.60 |
|
This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.
Summary Results May 31, 2024 FY25 Q1 GENESCO Exhibit 99.2
This presentation contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “should,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events, including shipping disruptions in the Red Sea; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address consumer demand; the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements. Safe Harbor Statement
Non-GAAP Financial Measures We report consolidated financial results in accordance with generally accepted accounting principles (“GAAP”). However, to supplement these consolidated financial results our presentation includes certain non-GAAP financial measures such as earnings (loss) and earnings (loss) per share and operating income (loss). This supplemental information should not be considered in isolation as a substitute for related GAAP measures. We believe that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results. Reconciliations of the non-GAAP supplemental information to the comparable GAAP measures can be found in the Appendix.
Our Aspiration Create and curate leading footwear brands that represent style, innovation and self-expression; be the destination for our consumers’ favorite fashion footwear How We Will Achieve It Build enduring relationships with our target customers, grounded in unparalleled consumer and market insights Deliver exciting, distinctive experiences and products across digital and physical Our Footwear Focused Vision & Strategy
Genesco’s strategy spans six strategic growth pillars People, Values, Organization, Culture and ESG Stewardship ACCELERATE digital to grow direct-to-consumer PURSUE synergistic acquisitions to add to growth MAXIMIZE the relationship between physical and digital INTENSIFY product innovation and trend insight efforts RESHAPE the cost base to reinvest for future growth DEEPEN consumer insights to strengthen customer relationships and brand equity 1 5 6 2 3 4 Attract, Develop and Retain Consumer-Obsessed Talent Genesco’s six strategic growth pillars are designed to accelerate our evolution, while leveraging digital and systems synergies to drive sustainable growth and enhanced profitability Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars
Strong Strategic Positioning Retail Platform Branded Platform The destination for young adult and teen fashion footwear and partner of choice for leading global brands Portfolio of leading owned and licensed brands #1 omnichannel retailer of teen fashion footwear #1 omnichannel retailer of youth fashion footwear Deep brand heritage and reputation for quality product Deep brand heritage across portfolio Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars
We delivered better sales, EPS, gross margin and expenses relative to expectations, led by Journeys, which continues to make progress on its turnaround With new Journeys leadership in place since the beginning of the year, we are working to dramatically accelerate the pace of improvement; good progress in Q1 with the bottom line close to last year’s level Comparable e-commerce sales increased by 3%, representing 23% of retail sales compared to 21% last year Building on success of loyalty programs with growing membership and higher purchase rates Inventory remained well controlled, with total company inventory down 17%, and Journeys inventory down 20%, enabling us to keep markdowns lower and expand adjusted gross margins versus last year We ended the quarter with 75 fewer stores versus a year ago as we continued to optimize our store footprint and drive productivity in our remaining store fleet We are making substantial progress realigning our cost base, and our cost savings program is on track to achieve a reduction in the annualized run rate of $45 to $50 million by the end of Fiscal 2025 Q1 FY25 • Highlights
Drive Product Leadership and Create Marketplace Differentiation Diversify and add new key styles with our existing brand partners Increase our leadership position with all our key brands Enhance in-store, social, and digital exposure for brands Work to add new brands Build the Journeys Brand and Enhance the Omni-Experience Intensify efforts to build and promote Journeys as an industry leading retail brand Improve Journeys’ brand presence and upgrade the customer experience in stores and online Personalize and improve the timeliness and relevancy of marketing communications Evolve the All Access loyalty program Leverage the Power of Our People Leverage the expertise of our store employees for excellent service as a differentiator Maximize mobile POS and BOPIS, to improve efficiency and customer engagement Use data to improve training and execution Optimize to Drive Operational and Cost Efficiencies Optimize the store footprint; close unproductive stores Strategically open mall and off-mall stores in data-informed sites Drive efficiencies in selling salaries, rent expense, and inventory management Journeys Consumer-Centric Growth Strategy
$458 MILLION IN SALES +3% GROWTH IN COMPARABLE E-COMMERCE SALES vs. Q1 FY2024 $(2.22) GAAP EPS $(2.10) NON-GAAP EPS 23% DIGITAL PENETRATION vs. 21% Q1 FY2024 Q1 FY25 Key Earnings Highlights
Q1 FY25 • Key Earnings Highlights
(1) 53-week period for trailing twelve months ended May 4, 2024 and 52-week period for trailing twelve months ended April 29,2023. (2) Retail sales represent combined store sales and e-commerce sales % of Retail Sales (2) 31% 25% 21% 23% 21% 23% 5% 10% Q1 FY25 • E-Commerce Sales Highlights
Q1 FY25 • Comparable Sales
FY25 Net Sales $457.6 Million Q1 FY25 Sales by Segment FY24 Net Sales $483.3 Million Journeys Group Schuh Group Johnston & Murphy Group Genesco Brands Group
Q1 FY25 • Adjusted Operating Income Statement (1)
Q1 FY25 Inventory/Sales Change by Segment
Q1 FY25 • Retail Store Summary
For Q1 FY25 Retail Square Footage
(1) FY25 Outlook Additional color on anticipated sales growth by business: Journeys Group: Mid-single digit percentage decline Schuh Group: Low-single digit percentage decline Johnston & Murphy Group: Flat Genesco Brands Group: High-single digit percentage decline (1) On a Non-GAAP basis Note: See earnings call transcript for important details regarding guidance assumptions.
FY25 Projected Retail Store Count
Omni-channel, IT, DC & Other New Stores & Remodels Projected FY25 CapEx approx. $52 - 57 Million FY25 Projected Depreciation & Amortization = $50 Million FY25 Projected Capital Spending
Appendix
Q1 FY25 • Non-GAAP Reconciliation
Q1 FY25 • Adjusted Gross Margin
Summary Results May 31, 2024 FY25 Q1 GENESCO
Document And Entity Information |
May 31, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | May 31, 2024 |
| Entity Registrant Name | GENESCO INC. |
| Entity Central Index Key | 0000018498 |
| Entity Emerging Growth Company | false |
| Entity File Number | 1-3083 |
| Entity Incorporation, State or Country Code | TN |
| Entity Tax Identification Number | 62-0211340 |
| Entity Address, Address Line One | 535 Marriott Drive |
| Entity Address, City or Town | Nashville |
| Entity Address, State or Province | TN |
| Entity Address, Postal Zip Code | 37214 |
| City Area Code | 615 |
| Local Phone Number | 367-7000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, $1.00 par value |
| Trading Symbol | GCO |
| Security Exchange Name | NYSE |
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