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Genesco Inc. Reports Fiscal 2019 Third Quarter Results

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NASHVILLE, Tenn., Dec. 6, 2018 /PRNewswire/ --

Third Quarter Fiscal 2019 Financial Summary

  • Net sales were $713 million
  • Comparable sales increased 4%
  • GAAP EPS from continuing operations was $0.74
  • Non-GAAP EPS from continuing operations was $0.951

Genesco Inc. (NYSE:GCO) today reported GAAP earnings from continuing operations per diluted share of $0.74 for the three months ended November 3, 2018, compared to a loss per diluted share of $(8.55) in the third quarter last year.  Adjusted for the Excluded Items in both periods, the Company reported third quarter earnings from continuing operations per diluted share of $0.95, compared to earnings per diluted share of $1.02 last year.

Robert J. Dennis, Chairman, President and Chief Executive Officer, said:

"We achieved our highest quarterly comparable sales increase in more than two years driven by the ongoing strength of our U.S. footwear businesses. Journeys and Johnston & Murphy delivered strong performances both in-store and online, which fueled an acceleration in our combined consolidated store and digital comps on a sequential basis. While still negative, sales trends at both the Lids Sports Group and Schuh Group continued to improve following a very challenging start to the year. Even with the strong comp result, sales were down year-over-year due primarily to the calendar shift that moved an important back-to-school sales week out of the third quarter into the second quarter. At the same time, a change in timing of catalog expenses due to new revenue recognition standards contributed to an increase in operating costs. All of this resulted in earnings per share that were slightly ahead of our expectations but below last year's level.

"The fourth quarter has started well, highlighted by solid results during the Black Friday through Cyber Monday period. While we are optimistic about continued strength at Journeys and Johnston & Murphy, the persistent negative comps at Lids and Schuh keep us cautious for the balance of the year, with the greater part of holiday shopping ahead of us. Looking further ahead, we believe the many initiatives we've recently executed have the Company well positioned to generate increased profitability and deliver greater shareholder value in fiscal 2020."

Third Quarter Review

Net sales for the third quarter of Fiscal 2019 decreased 1% to $713 million from $717 million in the third quarter of Fiscal 2018. Comparable sales increased 4%, with stores up 4% and direct up 9%. Direct-to-consumer sales were 11% of total retail sales for the quarter, compared to 10% last year.

Comparable Sales




Comparable Same Store and Direct Sales:

3QFY19

3QFY18

Journeys Group

9%

4%

Schuh Group

(4)%

4%

Lids Sports Group

(2)%

(6)%

Johnston & Murphy Group

10%

(1)%

Total Genesco Comparable Sales

4%

1%

   

Same Store Sales

4%

(2)%

Comparable Direct Sales

9%

24%

Third quarter gross margin this year was 49.5% compared with 49.4% last year.

Selling and administrative expense for the third quarter this year was 45.9%, up 90 basis points, compared to 45.0% of sales for the same period last year.  The increase as a percentage of sales reflects higher bonus accruals and the shift in timing of catalog expenses, partially offset by the leveraging of rents and several other expense categories.

Genesco's GAAP operating income for the third quarter was $19.5 million this year compared with an operating loss of $152.4 million last year.  Adjusted for the Excluded Items in both periods, operating income for the third quarter was $26.0 million this year compared with operating income of $31.3 million last year.  Adjusted operating margin was 3.7% of sales in the third quarter of Fiscal 2019 and 4.4% last year.

The effective tax rate for the quarter was 22.1% in Fiscal 2019 compared to -7.1% last year.  The adjusted tax rate, reflecting Excluded Items, was 25.9% in Fiscal 2019 compared to 33.9% last year.  The lower adjusted tax rate for this year reflects the lower U.S. federal income tax rate following the passage of the Tax Cut and Jobs Act in December 2017, partially offset by the inability to recognize a tax benefit for certain overseas losses.

GAAP earnings from continuing operations were $14.5 million in the third quarter of Fiscal 2019, compared to a loss of $164.8 million in the third quarter last year.  Adjusted for the Excluded Items in both periods, third quarter earnings from continuing operations were $18.7 million in Fiscal 2019, compared to earnings from continuing operations of $19.7 million last year.          

Cash, Borrowings and Inventory

Cash and cash equivalents at November 3, 2018 were $53.4 million, compared with $50.7 million at October 28, 2017.   Total debt at the end of the third quarter of Fiscal 2019 was $81.8 million compared with $223.6 million at the end of last year's third quarter, a decrease of 63%. Inventories decreased 5% in the third quarter of Fiscal 2019 on a year-over-year basis.   

Capital Expenditures and Store Activity

For the third quarter, capital expenditures were $16 million, which consisted of $10 million related to store remodels and new stores and $6 million related to direct to consumer, omnichannel, information technology, distribution center and other projects.    Depreciation and amortization was $19 million.  During the quarter, the Company opened 15 new stores and closed 19 stores.  Excluding Locker Room by Lids in Macy's stores, the Company ended the quarter with 2,534 stores compared with 2,604 stores at the end of the third quarter last year, or a decrease of 3%.  Square footage was down 2% on a year-over-year basis, both including and excluding Lids Locker Room departments in Macy's stores. 

Fiscal 2019 Outlook

For Fiscal 2019, the Company is narrowing its previously announced guidance range for adjusted diluted earnings per share and reiterating its expectation that earnings for the year will be near the midpoint of the range.  The Company expects:

  • Comparable sales to be up 2% to 3%, and
  • Adjusted diluted earnings per share in the range of $3.10 to $3.40.2

Access the conference call below for details regarding guidance assumptions.

Conference Call, Management Commentary and Investor Presentation

The Company has posted detailed financial commentary and a supplemental financial presentation of third quarter results on its website, www.genesco.com, in the investor relations section.  The Company's live conference call on December 6, 2018, 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 the performance outlook for the Company and its individual businesses (including, without limitation, sales, expenses, margins and earnings) and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences.  These include adjustments to estimates and projections reflected in forward-looking statements, including the level and timing of promotional activity necessary to maintain inventories at appropriate levels; the Company's ability to complete the sale of the Lids Sports Group business on acceptable terms and the timing of any sale transaction; the imposition of tariffs on imported products or the disallowance of tax deductions on imported products; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the effects of the British decision to exit the European Union, including potential effects on consumer demand, currency exchange rates, and the supply chain; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements;  cost associated with wage pressure associated with a full employment environment in the U.S. and the U.K.; weakness in the consumer economy and retail industry for the products we sell; competition in the Company's markets, including online and including competition from some of the Company's vendors in both the licensed sports and branded footwear markets; fashion trends, including the lack of new fashion trends or products, that affect the sales or product margins of the Company's retail product offerings; weakness in shopping mall traffic and challenges to the viability of malls where the Company operates stores, related to planned closings of department stores or other factors and the extent and pace of growth of online shopping; the effects of the implementation of federal tax reform on the estimated tax rate reflected in certain forward-looking statements; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers or the inability of wholesale customers or consumers to obtain credit; the Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons; and the performance of athletic teams, the participants in major sporting events such as the NBA finals, Super Bowl, World Series, and College Football Playoffs, developments with respect to certain individual athletes, and other sports-related events or changes that may affect period-to-period comparisons in the Company's Lids Sports Group retail businesses. Additional factors that could affect the Company's prospects and cause differences from expectations include the ability to build, open, staff and support additional retail stores and to renew leases in existing stores and control or lower occupancy costs, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; 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 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; 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; and the cost and outcome of litigation, investigations and environmental matters 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, our 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 our 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., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel and accessories in more than 2,650 retail stores and leased departments throughout the U.S., Canada, the United Kingdom, the Republic of Ireland and Germany, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Schuh Kids, Little Burgundy, Lids, Locker Room by Lids, Johnston & Murphy, and on internet websites www.journeys.com, www.journeyskidz.com, www.journeys.ca, www.shibyjourneys.com, www.schuh.co.uk, www.littleburgundyshoes.com, www.johnstonmurphy.com, www.lids.com, www.lids.ca, www.lidslockerroom.com, www.trask.com, and www.dockersshoes.com.  The Company's Lids Sports Group division operates the Lids headwear stores, the Locker Room by Lids and other team sports fan shops and single team clubhouse stores.   In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the Trask brand, the licensed Dockers brand, and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.

1 Excludes trademark and asset impairment charges, hurricane losses, and a gain related to Hurricane Maria, net of tax effect and other tax items ("Excluded Items"). A reconciliation of earnings/loss and earnings/loss per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") with the adjusted earnings/loss and earnings/loss per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of earnings and earnings 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.

2 A 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.

GENESCO INC.


Condensed Consolidated Statements of Operations


(in thousands, except per share data)


(Unaudited)
















Three Months Ended


Three Months Ended






Nov. 3,

% of


Oct 28,

% of






2018

Net Sales


2017

Net Sales



Net sales



$ 713,069

100.0%


$  716,759

100.0%



Cost of sales


359,941

50.5%


362,761

50.6%



Gross margin


353,128

49.5%


353,998

49.4%



Selling and administrative expenses

327,099

45.9%


322,719

45.0%



Goodwill impairment


-

0.0%


182,211

25.4%



Asset impairments and other, net

6,558

0.9%


1,446

0.2%



   Earnings (loss) from operations 

19,471

2.7%


(152,378)

-21.3%



Other components of net periodic benefit cost

(2)

0.0%


21

0.0%



Interest expense, net


837

0.1%


1,457

0.2%



   Earnings (loss) from continuing operations before 








     income taxes


18,636

2.6%


(153,856)

-21.5%



Income tax expense 


4,117

0.6%


10,950

1.5%



   Earnings (loss) from continuing operations

14,519

2.0%


(164,806)

-23.0%



Provision for discontinued operations, net

(132)

0.0%


(15)

0.0%



   Net Earnings (Loss)


$   14,387

2.0%


$(164,821)

-23.0%













Basic earnings (loss) per share:








    Before discontinued operations

$       0.75



$       (8.55)




    Net earnings (loss)


$       0.74



$       (8.56)














Weighted-average shares outstanding - Basic

19,462



19,265














Diluted earnings (loss) per share:








    Before discontinued operations

$       0.74



$       (8.55)




    Net earnings (loss)


$       0.73



$       (8.56)














Weighted-average shares outstanding - Diluted

19,637



19,265













 

 

GENESCO INC.


Condensed Consolidated Statements of Operations


(in thousands, except per share data)


(Unaudited)
















Nine Months Ended


Nine Months Ended






Nov. 3,

% of


Oct 28,

% of






2018

Net Sales


2017

Net Sales



Net sales



$ 2,011,920

100.0%


$ 1,976,633

100.0%



Cost of sales


1,015,522

50.5%


997,215

50.5%



   Gross margin


996,398

49.5%


979,418

49.5%



Selling and administrative expenses

968,265

48.1%


947,122

47.9%



Goodwill impairment


-

0.0%


182,211

9.2%



Asset impairments and other, net

9,149

0.5%


1,623

0.1%



   Earnings (loss) from operations 

18,984

0.9%


(151,538)

-7.7%



Other components of net periodic benefit cost

17

0.0%


77

0.0%



Interest expense, net


2,968

0.1%


3,883

0.2%



   Earnings (loss) from continuing operations before income taxes

15,999

0.8%


(155,498)

-7.9%



Income tax expense 


3,621

0.2%


12,186

0.6%



   Earnings (loss) from continuing operations

12,378

0.6%


(167,684)

-8.5%



Provision for discontinued operations, net

(337)

0.0%


(200)

0.0%



   Net Earnings (Loss)


$      12,041

0.6%


$  (167,884)

-8.5%













Basic earnings (loss) per share:








    Before discontinued operations

$          0.64



$         (8.73)




    Net earnings (loss)


$          0.62



$         (8.74)














Weighted-average shares outstanding - Basic

19,361



19,202














Diluted earnings (loss) per share:








    Before discontinued operations

$          0.63



$         (8.73)




    Net earnings (loss)


$          0.62



$         (8.74)














Weighted-average shares outstanding - Diluted

19,511



19,202













 

 

GENESCO INC.


Sales/Earnings Summary by Segment


(in thousands)


(Unaudited)
















Three Months Ended


Three Months Ended






Nov. 3,

% of


Oct 28,

% of






2018

Net Sales


2017

Net Sales



Sales:










    Journeys Group


$ 345,702

48.5%


$  333,506

46.5%



    Schuh Group


95,567

13.4%


101,489

14.2%



    Lids Sports Group


173,241

24.3%


181,347

25.3%



    Johnston & Murphy Group

79,736

11.2%


74,132

10.3%



    Licensed Brands


18,757

2.6%


26,208

3.7%



    Corporate and Other


66

0.0%


77

0.0%



    Net Sales



$ 713,069

100.0%


$  716,759

100.0%



Operating Income (Loss):









    Journeys Group 


$   25,232

7.3%


$    24,283

7.3%



    Schuh Group


4,207

4.4%


7,054

7.0%



    Lids Sports Group


(388)

-0.2%


1,991

1.1%



    Johnston & Murphy Group

5,215

6.5%


5,287

7.1%



    Licensed Brands


(189)

-1.0%


1,153

4.4%



    Corporate and Other(1)


(14,606)

-2.0%


(9,935)

-1.4%



    Goodwill impairment charge

-

0.0%


(182,211)

-25.4%



Earnings (loss) from operations

19,471

2.7%


(152,378)

-21.3%



Other components of net periodic benefit cost

(2)

0.0%


21

0.0%



Interest, net



837

0.1%


1,457

0.2%













Earnings (loss) from continuing operations before                    







   income taxes


18,636

2.6%


(153,856)

-21.5%



Income tax expense 


4,117

0.6%


10,950

1.5%



Earnings (loss) from continuing operations

14,519

2.0%


(164,806)

-23.0%



Provision for discontinued operations, net

(132)

0.0%


(15)

0.0%



Net Earnings (Loss)


$   14,387

2.0%


$(164,821)

-23.0%













(1)Includes a $6.5 million charge in the third quarter of Fiscal 2019 which includes $5.7 million for a trademark impairment, $1.5 million for 


asset impairments and $0.2 million in hurricane losses, partially offset by a $0.9 million gain related to Hurricane Maria.  Includes a $1.4 million 


charge in the third quarter of Fiscal 2018 which includes $0.9 million for hurricane losses and $0.5 million for asset impairments. 


 

 

GENESCO INC.


Sales/Earnings Summary by Segment


(in thousands)


(Unaudited)
















Nine Months Ended


Nine Months Ended






Nov. 3,

% of


Oct 28,

% of






2018

Net Sales


2017

Net Sales



Sales:










    Journeys Group


$    956,839

47.6%


$    876,578

44.3%



    Schuh Group


273,992

13.6%


275,570

13.9%



    Lids Sports Group


498,858

24.8%


538,478

27.2%



    Johnston & Murphy Group

223,861

11.1%


211,785

10.7%



    Licensed Brands


58,158

2.9%


73,915

3.7%



    Corporate and Other


212

0.0%


307

0.0%



    Net Sales



$ 2,011,920

100.0%


$ 1,976,633

100.0%



Operating Income (Loss):









    Journeys Group (1)


$      46,530

4.9%


$      29,561

3.4%



    Schuh Group


(360)

-0.1%


10,905

4.0%



    Lids Sports Group


(4,598)

-0.9%


3,245

0.6%



    Johnston & Murphy Group

11,149

5.0%


10,654

5.0%



    Licensed Brands


(279)

-0.5%


2,377

3.2%



    Corporate and Other(2)


(33,458)

-1.7%


(26,069)

-1.3%



    Goodwill impairment charge

-

0.0%


(182,211)

-9.2%



Earnings (loss) from operations

18,984

0.9%


(151,538)

-7.7%



Other components of net periodic benefit cost

17

0.0%


77

0.0%



Interest, net



2,968

0.1%


3,883

0.2%













Earnings (loss) from continuing operations before income taxes

15,999

0.8%


(155,498)

-7.9%



Income tax expense 


3,621

0.2%


12,186

0.6%



Earnings (loss) from continuing operations

12,378

0.6%


(167,684)

-8.5%



Provision for discontinued operations, net

(337)

0.0%


(200)

0.0%



Net Earnings (Loss)


$      12,041

0.6%


$  (167,884)

-8.5%













(1)Includes a $0.3 million charge for acquisition transition expenses in the first nine months of Fiscal 2018.







(2)Includes a $9.1 million charge in the first nine months of Fiscal 2019 which includes $5.7 million for a trademark impairment, $3.7 million for asset impairments, 


 $1.0 million in legal and other matters and $0.2 million in hurricane losses, partially offset by a $1.5 million gain related to Hurricane Maria.  Includes a $1.6 million 


charge in the first nine months of Fiscal 2018 which includes $0.9 million for hurricane losses and $0.7 million for asset impairments. 



 

 


GENESCO INC.



Condensed Consolidated Balance Sheets



(in thousands)



(Unaudited)






















Nov. 3, 2018


Oct. 28, 2017



Assets








Cash and cash equivalents



$             53,423


$           50,740



Accounts receivable



48,364


52,704



Inventories



666,166


697,949



Other current assets



75,149


73,895



   Total current assets



843,102


875,288



Property and equipment



361,878


378,483



Goodwill and other intangibles



173,021


180,910



Other non-current assets



52,712


63,802



   Total Assets



$        1,430,713


$      1,498,483











Liabilities and Equity








Accounts payable



$           257,504


$         244,366



Current portion long-term debt



9,325


2,207



Other current liabilities



105,463


132,921



   Total current liabilities



372,292


379,494



Long-term debt



72,455


221,372



Pension liability



-


5,878



Deferred rent and other long-term liabilities

144,205


137,339



Equity



841,761


754,400



   Total Liabilities and Equity



$        1,430,713


$      1,498,483










 

 

GENESCO INC.

Store Count Activity
























Balance




Balance





Balance


01/28/17

Open

Close


02/03/18


Open

Close


11/03/18

Journeys Group

1,249

45

74


1,220


21

22


1,219

Schuh Group

128

7

1


134


4

4


134

Lids Sports Group (1)

1,240

18

99


1,159


16

59


1,116

Johnston & Murphy Group

177

7

3


181


3

-


184

Total Retail Units

2,794

77

177


2,694


44

85


2,653












(1)Includes 119 Locker Room by Lids in Macy's stores as of November 3, 2018.


















 

 

GENESCO INC.

Store Count Activity
















Balance




Balance



08/04/18

Open

Close


11/03/18


Journeys Group

1,215

8

4


1,219


Schuh Group

135

-

1


134


Lids Sports Group (1)

1,125

5

14


1,116


Johnston & Murphy Group

182

2

-


184


Total Retail Units

2,657

15

19


2,653









(1)Includes 119 Locker Room by Lids in Macy's stores as of November 3, 2018.



 

 

GENESCO INC.

Comparable Sales















Three Months Ended



Nine Months Ended




Nov. 3,


Oct. 28,



Nov. 3,


Oct. 28,




2018


2017



2018


2017

Journeys Group



9%


4%



8%


0%

Schuh Group



(4)%


4%



(8)%


5%

Lids Sports Group



(2)%


(6)%



(5)%


(3)%

Johnston & Murphy Group



10%


(1)%



8%


(2)%

  Total Comparable Sales



4%


1%



2%


0%












Same Store Sales



4%


(2)%



1%


(3)%

Comparable Direct Sales



9%


24%



9%


27%












 

 

Schedule B


Genesco Inc.

Adjustments to Reported Earnings (Loss) from Continuing Operations

Three Months Ended November 3, 2018 and October 28, 2017





















 Three Months Ended 



 November 3, 2018 


 October 28, 2017 




 Net of 

 Per Share 



 Net of 

 Per Share 

In Thousands (except per share amounts)


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 

Earnings (loss) from continuing operations, as reported



$     14,519

$              0.74



$   (164,806)

$        (8.55)










Pretax adjustments:









Impairment charges


$         1,522

1,072

0.05


$          510

332

0.02

Trademark impairment charge


5,736

4,196

0.21


-

-

-

Other legal matters


-

(18)

-


-

-

-

(Gain) loss on Hurricane Maria


(884)

(636)

(0.03)


936

619

0.03

Other hurricane losses


184

135

0.01


-

-

-

Goodwill impairment charge


-

-

-


182,211

156,924

8.13

Impact of additional dilutive shares


-

-

-


-

-

0.01

Total adjustments


$         6,558

4,749

0.24


$    183,657

157,875

8.19










Other tax items



(605)

(0.03)



26,632

1.38

Adjusted earnings from continuing operations(1)and (2)



$     18,663

$              0.95



$      19,701

$         1.02



















(1)The adjusted tax rate for the third quarter of Fiscal 2019 is 25.9% including a FIN 48 discrete item of less than $0.1 million.  The adjusted tax rate for 

     the third quarter of Fiscal 2018 is 33.9% including a FIN 48 discrete item of less than $0.1 million.














(2)EPS reflects 19.6 million and 19.3 million share count for Fiscal 2019 and 2018, respectively, which includes common stock equivalents in both years.










The Company believes that disclosure of earnings and earnings 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.



 

 

Genesco Inc.

Adjustments to Reported Operating Income (Loss)

Three Months Ended November 3, 2018 and October 28, 2017








 Three Months Ended November 3, 2018 



 Operating 


Adj Operating

In Thousands 


 Income (Loss) 

 Adjust 

 Income (Loss) 

Journeys Group


$       25,232

$           -

$          25,232

Schuh Group


4,207

-

4,207

Lids Sports Group


(388)

-

(388)

Johnston & Murphy Group


5,215

-

5,215

Licensed Brands


(189)

-

(189)

Corporate and Other


(14,606)

6,558

(8,048)

Total Operating Income 


$       19,471

$      6,558

$          26,029













 Three Months Ended October 28, 2017 



 Operating 


Adj Operating

In Thousands 


 Income (Loss) 

 Adjust 

 Income (Loss) 

Journeys Group


$       24,283

$           -

$          24,283

Schuh Group


7,054

-

7,054

Lids Sports Group


1,991

-

1,991

Johnston & Murphy Group


5,287

-

5,287

Licensed Brands


1,153

-

1,153

Corporate and Other


(9,935)

1,446

(8,489)

Goodwill impairment charge


(182,211)

182,211

-

Total Operating Income (loss)


$    (152,378)

$   183,657

$          31,279

 

 

Schedule B


Genesco Inc.

Adjustments to Reported Earnings (Loss) from Continuing Operations

Nine Months Ended November 3, 2018 and October 28, 2017





















 Nine Months Ended 



 November 3, 2018 


 October 28, 2017 




 Net of 

 Per Share 



 Net of 

 Per Share 

In Thousands (except per share amounts)


 Pretax 

 Tax 

 Amounts 


 Pretax 

 Tax 

 Amounts 

Earnings (loss) from continuing operations, as reported



$     12,378

$              0.63



$   (167,684)

$        (8.73)










Pretax adjustments:









Impairment charges


$         3,724

2,724

0.14


$          687

454

0.02

Trademark impairment charge


5,736

4,196

0.22


-

-

-

Other legal matters


992

726

0.04


-

-

-

(Gain) loss on Hurricane Maria


(1,487)

(1,088)

(0.06)


936

619

0.03

Other hurricane losses


184

135

0.01


-

-

-

Acquisition transition expenses


-

-

-


288

190

0.01

Goodwill impairment charge


-

-

-


182,211

156,924

8.15

Impact of additional dilutive shares


-

-

-


-

-

0.03

Total adjustments


$         9,149

6,693

0.35


$    184,122

158,187

8.24










Tax impact for share-based awards



452

0.02



2,167

0.11

Other tax items



(1,190)

(0.06)



26,145

1.36

Adjusted earnings (loss) from continuing operations(1)and (2)


$     18,333

$              0.94



$      18,815

$         0.98



















(1)The adjusted tax rate for the first nine months of Fiscal 2019 is 27.1% including a FIN 48 discrete item of less than $0.1 million.  The adjusted tax rate for 

     the first nine months of Fiscal 2018 is 34.3% including a FIN 48 discrete item of less than $0.1 million.














(2)EPS reflects 19.5 million and 19.3 million share count for Fiscal 2019 and 2018, respectively, which includes common stock equivalents in both years.










The Company believes that disclosure of earnings and earnings 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.



 

 

Genesco Inc.

Adjustments to Reported Operating Income (Loss)

Nine Months Ended November 3, 2018 and October 28, 2017








 Nine Months Ended November 3, 2018 



 Operating 


Adj Operating

In Thousands 


 Income (Loss) 

 Adjust 

 Income (Loss) 

Journeys Group


$       46,530

$           -

$          46,530

Schuh Group


(360)

-

(360)

Lids Sports Group


(4,598)

-

(4,598)

Johnston & Murphy Group


11,149

-

11,149

Licensed Brands


(279)

-

(279)

Corporate and Other


(33,458)

9,149

(24,309)

Total Operating Income (Loss)


$       18,984

$      9,149

$          28,133













 Nine Months Ended October 28, 2017 



 Operating 


Adj Operating

In Thousands 


 Income (Loss) 

 Adjust 

 Income (Loss) 

Journeys Group


$       29,561

$         288

$          29,849

Schuh Group


10,905

-

10,905

Lids Sports Group


3,245

-

3,245

Johnston & Murphy Group


10,654

-

10,654

Licensed Brands


2,377

-

2,377

Corporate and Other


(26,069)

1,623

(24,446)

Goodwill impairment charge


(182,211)

182,211

-

Total Operating Income (Loss)


$    (151,538)

$   184,122

$          32,584

 

 

Schedule B


Genesco Inc.

Adjustments to Forecasted Earnings from Continuing Operations

Fiscal Year Ending February 2, 2019







In Thousands (except per share amounts)


High Guidance

Low Guidance



Fiscal 2019

Fiscal 2019

Forecasted earnings from continuing operations 


$     58,153

$       2.98

$   51,585

$       2.64







Adjustments: (1)






Store/Trademark impairments, other legal matters, gain/loss on hurricanes

7,780

0.40

8,510

0.44

Tax impact for share-based awards


452

0.02

452

0.02







Adjusted forecasted earnings from continuing operations (2)

$     66,385

$       3.40

$   60,547

$       3.10













(1)All adjustments are net of tax where applicable.  The forecasted tax rate for Fiscal 2019 is approximately 27.0%.







(2)EPS reflects 19.5 million share count for Fiscal 2019 which includes common stock equivalents.









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.  






 

Cision View original content:http://www.prnewswire.com/news-releases/genesco-inc-reports-fiscal-2019-third-quarter-results-300761098.html

SOURCE Genesco Inc.

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