Genesco 3Q profit rises, lifts 2010 forecast

AP News
Posted: Nov 24, 2009 12:35 PM

Genesco Inc.'s third-quarter profit rose on improved gross margin and lower costs, the footwear and accessories retailer said Tuesday.

The company is upbeat about the holiday season, due to easier comparisons, shoppers' willingness to spend and its strong merchandise position.

Genesco boosted its fiscal 2010 profit forecast, citing its quarterly performance.

Earnings increased 27 percent to $11.4 million, or 50 cents per share, compared with $9 million, or 43 cents per share, a year earlier.

Taking out fixed asset impairment charges of 7 cents per share and other items, earnings from continuing operations were 53 cents per share.

For the three months ended Oct. 31, sales were essentially flat at $390.3 million.

The performance beat the forecasts of analysts polled by Thomson Reuters, who expected a profit of 44 cents per share on revenue of $388.4 million. These estimates typically exclude one-time items.

Sales at stores open at least a year dipped 2 percent in the quarter, with declines in Journeys Group, Underground Station and Johnston & Murphy Retail.

This sales figure is a key indicator of retailer performance since it measures growth at existing stores rather than newly opened ones.

Selling, general and administrative expenses declined to $178.3 million from $179.4 million. Genesco did not provide specifics on its gross margin.

Genesco now anticipates earnings of $1.78 to $1.84 per share for the fiscal year. Its previous outlook was for a profit of $1.70 to $1.80 per share. The retailer said its updated forecast assumes fourth-quarter earnings of $1.07 to $1.13 per share.

Analysts predict 2010 earnings of $1.75 per share and fourth-quarter profit of $1.15 per share.

Genesco's stock fell $2.17, or 7.6 percent, to $26.37 in midday trading. The share have traded in a range of $10.82 to $29.69 over the past year.