NASHVILLE, Tenn., March 11, 2016 /PRNewswire/ — Genesco Inc. (NYSE: GCO) today reported earnings from continuing operations for the fourth quarter ended January 30, 2016, of $46.7 million, or $2.15 per diluted share, compared to earnings from continuing operations of $51.8 million, or $2.18 per diluted share, for the fourth quarter ended January 31, 2015. Fiscal 2016 fourth quarter results reflect a pretax gain of $3.4 million, or $0.04 per diluted share after tax, including a gain on the sale of Lids Team Sports of $7.3 million, partially offset by $3.9 million of asset impairment charges, asset write-downs and network intrusion expenses. Fiscal 2015 fourth quarter results reflect pretax items of $1.9 million, or $0.12 per diluted share after tax, including $1.0 million related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited and $0.9 million in network intrusion expenses and asset impairment charges.
Adjusted for the items described above in both periods, earnings from continuing operations were $45.8 million, or $2.11 per diluted share, for the fourth quarter of Fiscal 2016, compared to earnings from continuing operations of $54.7 million, or $2.30 per diluted share, for the fourth quarter of Fiscal 2015. For consistency with Fiscal 2016’s previously announced earnings expectations and with previously reported adjusted results for the prior year period, the Company believes that the disclosure of the results from continuing operations adjusted for these items will be useful to investors. A reconciliation of earnings and earnings per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles with the adjusted earnings and earnings per share numbers presented in this paragraph is set forth on Schedule B to this press release.
Net sales for the fourth quarter of Fiscal 2016 increased 4.4% to $932 million from $893 million in the fourth quarter of Fiscal 2015. Consolidated fourth quarter 2016 comparable sales, including same store sales and comparable e-commerce and catalog sales, increased 4%, with a 5% increase in the Journeys Group, a 3% increase in the Lids Sports Group, a 2% decrease in the Schuh Group, and a 6% increase in the Johnston & Murphy Group. Comparable sales for the Company reflected a 2% increase in same store sales and a 21% increase in e-commerce sales.
The Company also reported net sales for the year ended January 30, 2016, of $3.0 billion, an increase of 5.7% from net sales of $2.9 billion for the year ended January 31, 2015. Earnings from continuing operations for Fiscal 2016 were $97.1 million, or $4.22 per diluted share, compared to earnings from continuing operations of $99.4 million, or $4.19 per diluted share, for Fiscal 2015. Fiscal 2016 earnings reflect after-tax charges of $0.07 per diluted share, including $9.4 million in asset impairments, asset write-downs, network intrusion expenses, compensation expense associated with the Schuh deferred purchase price, and other legal matters, partially offset by a $7.3 million gain on the sale of Lids Team Sports. Fiscal 2015 earnings reflect after-tax charges of $0.55 per diluted share, including, an indemnification asset write-off, network intrusion-related expenses, compensation expense associated with the Schuh deferred purchase price, effects of the change in accounting for deferred bonuses under the EVA incentive plan, asset impairments, and other legal matters, partially offset by a gain on a lease termination.
Adjusted for the listed items in both years, earnings from continuing operations were $98.6 million, or $4.29 per diluted share, for Fiscal 2016, compared to earnings from continuing operations of $112.3 million, or $4.74 per diluted share, for Fiscal 2015. For consistency with previously announced earnings expectations, which did not reflect the listed items, the Company believes that disclosure of earnings from continuing operations adjusted for those items will be useful to investors. A reconciliation of the adjusted financial measures to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.
The Company repurchased a total of 2.4 million shares of common stock in Fiscal 2016 at a total cost of $145 million and an average price of $60.79 per share. These purchases included 251,000 shares repurchased in the fourth quarter at a total cost of $16 million and an average price of $63.24. Through March 4, 2016, the Company had repurchased 480,500 shares at a total cost of $31 million and an average price of $64.40 in the first quarter of Fiscal 2017.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “Fourth quarter earnings came in just below our guidance range as a result of gross margin pressure related to our decision to make a final, aggressive push to complete our year-long program to right-size inventory in the Lids Sports Group and similarly aggressive efforts to clear inventory after a slow Holiday selling season at Schuh. Additionally, a later start to IRS tax refunds than in the previous year reduced comparable sales at the end of the quarter. While we are disappointed with our overall results, we are encouraged by the strong performance of Journeys and Johnston & Murphy and the work we’ve done to prepare the Company for sustained, profitable growth going forward.
“Comparable sales for the first quarter through March 5, 2016 increased 3% from the same period last year, reflecting in part the impact on early February sales from the delay in receipt of income tax refunds by customers, and recovery later in the month as tax refunds began.
“Based on the projected margin recovery at Lids Sports Group combined with modest overall comparable sales growth, we expect adjusted diluted earnings per share for the fiscal year ending January 28, 2017, in the range of $4.80 to $4.90, which represents a 12% to 14% increase over Fiscal 2016’s adjusted earnings per share of $4.29. These expectations do not include expected non-cash asset impairments and other charges, estimated in the range of $6.3 million to $6.8 million pretax, or $0.19 to $0.20 per share after tax, for the full fiscal year. This guidance assumes comparable sales increases in the 1% to 2% range for the full year.” A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.
Dennis concluded, “We begin Fiscal 2017 in a solid position to execute our long-term strategic plans. We look forward to realizing some of the benefits of last year’s hard work in the new fiscal year.”
About Genesco Inc.
Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel and accessories in more than 2,850 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, Lids Clubhouse, Johnston & Murphy, and on internet websites www.journeys.com, www.journeyskidz.com, www.shibyjourneys.com, www.schuh.co.uk, www.littleburgundyshoes.com, www.johnstonmurphy.com, www.lids.com, www.lids.ca, www.lidslockerroom.com, www.lidsclubhouse.com, https://shop.neweracap.com/ , www.trask.com, www.suregripfootwear.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, G.H. Bass, SureGrip, and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.
