Baird Downgrades Genesco To Neutral On 'Stunning' Fall-Off In Comps

Baird has downgraded specialty retailer Genesco Inc. GCO to Neutral citing that its thesis on the company has changed. Baird substantially reduced Genesco's price target to $53, down from its previous target of $80.

The company was disappointed to step aside from Genesco post Q2 earnings, which saw its stock fall off a cliff, down 32 percent on the week.

"We are highly disappointed to be stepping aside on GCO, particularly since our positive view related to the multi-year Lids recovery is intact. However, the stunning comps falloff at Journeys provides too many uncertainties related to the timing and shape of a recovery," Baird said in an analyst noted released Friday.

Related Link: James Harden's Shoe Gets The Steph Curry Treatment

What Went Wrong At Journeys?

The footwear retailer was able to correctly identify recent trends of casual/athletic footwear with adidas AG (ADR) ADDYY comeback along with PUMA SE NPV PMMAF, but was "unable to secure adequate allocations to offset declines elsewhere (likely Vans VF Corp VFC/Converse Nike Inc NKE/Sperry Wolverine World Wide, Inc. WWW), pressuring conversion despite reasonably solid traffic," Baird Analysts said. Comps were particularly troubling for Journeys, down 4 percent in the quarter.

Genesco stock was up 1 percent in midday trading Friday.

Full ratings data available on Benzinga Pro.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: Analyst ColorEarningsDowngradesPrice TargetAnalyst RatingsMoversBairdJourneysshoes
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!