Genesco Posts Downbeat Q1 Earnings, Lowers FY16 Forecast

Shares of

declined more than 4 percent in pre-market trading after the company reported weaker-than-expected earnings for the fiscal first quarter and lowered its earnings forecast for the year. The Nashville, Tennessee-based company posted quarterly earnings from continuing operations of $9.9 million, or $0.42 per share, down from $14.1 million, or $0.60 per share, in the year-ago quarter. Excluding one-time items, the company's earnings from continuing operations slipped to $0.51 per share from $0.81 per share. Its revenue rose 5 percent year-over-year to $660.6 million. However, analysts were expecting earnings of $0.67 per share on revenue of $665.9 million. The average estimate among 7 Estimize users was for earnings of $0.72 per share and revenue of $666.78 million. Comparable sales for the first quarter climbed 4 percent. Comparable sales gained 5 percent in the Journeys Group, while comparable sales in the Lids Sports Group surged 3 percent. Its comparable sales jumped 4 percent in the Schuh Group, while Comparable sales in the Johnston & Murphy Group rose 3 percent. "Our first quarter results were generally in line with our expectations," said Robert J. Dennis, chairman, president and chief executive officer of Genesco. "Our recent performance reflects solid top-line growth, with positive comparable sales in all our retail businesses, led by Journeys, where comparable sales would have been even stronger if not for product delivery delays related to the West Coast port challenges. The year-over-year decrease in earnings reflects expected gross margin pressure from planned actions to reduce inventories in the Lids Sports Group, the growth of businesses that are primarily second-half contributors, and expenses related to the growth of our e-commerce business." For the full year, Genesco now projects earnings of $4.70 to $4.80 per share, versus earlier forecast of $5.10 to $5.20 per share. Genesco shares fell 4.12 percent to $65.00 in pre-market trading.