Genesco (GCO) 8-K Genesco Reports Second Quarter Fiscal 2010 Results

Exhibit 99.1

Financial Contact: James S. Gulmi (615) 367-8325
Media Contact:      Claire S. McCall (615) 367-8283

GENESCO REPORTS SECOND QUARTER
FISCAL 2010 RESULTS

NASHVILLE, Tenn., Aug. 27, 2009 — Genesco Inc. (NYSE:GCO) today reported a loss from continuing operations for the second quarter ended August 1, 2009, of $2.7 million, or $0.12 per diluted share, compared to a loss from continuing operations of $5.4 million, or $0.29 per diluted share, for the second quarter ended August 2, 2008. Fiscal 2010 second quarter earnings reflected pretax charges of $3.3 million, or $0.09 per diluted share, primarily related to fixed asset impairments. In addition, the second quarter of Fiscal 2010 reflected additional interest costs due to the adoption of FSP APB 14-1 in the first quarter of Fiscal 2010, a new accounting standard applicable to the Company’s convertible debt. Fiscal 2009 second quarter earnings included charges associated with merger related expenses, asset impairment and lease terminations, other legal matters, and a higher effective tax rate. Fiscal 2009 earnings also included a restatement of interest expense required by the adoption of APB 14-1, which required retroactive application resulting in additional interest costs.

     Adjusted for the listed items in both periods, the loss from continuing operations was $0.4 million, or $0.02 per diluted share, for the second quarter of Fiscal 2010, compared to earnings from continuing operations of $3.6 million, or $0.18 per diluted share, for the second quarter of Fiscal 2009. For consistency with Fiscal 2010’s 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.

     Net sales for the second quarter of Fiscal 2010 were $335 million compared to $353 million in the second quarter of Fiscal 2009. Comparable store sales in the second quarter of Fiscal 2010 decreased by 8%. Comparable store sales in the Journeys Group decreased by 9%, the Hat World Group decreased by 2%, Underground Station decreased by 19%, and Johnston & Murphy Retail decreased by 16%.

     Robert J. Dennis, president and chief executive officer of Genesco, said, “We were pleased with our bottom-line performance for the quarter, even though sales remained choppy. August is off to a better start, with comparable sales through August 24 down by only 4%, despite a slightly delayed back to school in key regions related to a later than usual Labor Day.

     “Looking ahead, while visibility with regard to the economic climate is still quite limited, we remain cautiously optimistic about the second half of Fiscal 2010. Sales comparisons continue to moderate throughout the period, and we expect positive comps in the fourth quarter. We are buying accordingly.

     “Based on our sales expectations, we believe that we should be able to achieve our previously announced baseline scenario of earnings per share in the $1.70 to $1.80 range for the year.”

Cautionary Note Concerning Forward-Looking Statements

     This release contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses, 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 reflected in forward-looking statements, continuing weakness in the consumer economy, inability of customers to obtain credit, fashion trends that affect the sales or product margins of the Company’s retail product offerings, changes in buying patterns by significant wholesale customers, bankruptcies or deterioration in financial condition of significant wholesale customers, disruptions in product supply or distribution, unfavorable trends in fuel costs, foreign exchange rates, foreign labor and materials costs, and other factors affecting the cost of products, competition in the Company’s markets and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. 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 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, unexpected changes to the market for our shares, variations from expected pension-related charges caused by conditions in the financial markets, and the 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.

Conference Call

     The Company’s live conference call on August 27, 2009, at 7:30 a.m. (Central time) may be accessed through the Company’s internet 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.

About Genesco Inc.

     Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear and accessories in more than 2,240 retail stores in the United States and Canada, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Johnston & Murphy, Underground Station, Hatworld, Lids, Hat Shack, Hat Zone, Head Quarters and Cap Connection, and on internet websiteswww.journeys.com,www.journeyskidz.com,www.shibyjourneys.com,www.undergroundstation.com,www.johnstonmurphy.com,www.dockersshoes.com, andwww.lids.com. The Company also sells footwear at wholesale under its Johnston & Murphy brand and under the licensed Dockers brand. Additional information on Genesco and its operating divisions may be accessed at its websitewww.genesco.com.

GENESCO INC.

Consolidated Earnings Summary

	Three Months Ended						Six Months Ended
				Restated *						Restated *
	August 1,			August 2,			August 1,			August 2,
In Thousands	2009			2008			2009			2008
Net sales	$	334,658		$	353,138		$	705,024		$	710,073
Cost of sales		164,713			171,814			345,857			347,354
Selling and administrative expenses		168,598			173,420			349,967			353,466
Restructuring and other, net		3,320			3,261			8,293			(198,577	)
(Loss) earnings from operations		(1,973	)		4,643			907			207,830
Loss on early retirement of debt		—			—			5,119			—
Interest expense, net		1,862			2,873			4,945			5,818
(Loss) earnings before income taxes from continuing operations		(3,835	)		1,770			(9,157	)		202,012
Income tax (benefit) expense		(1,172	)		7,161			(891	)		77,963
(Loss) earnings from continuing operations		(2,663	)		(5,391	)		(8,266	)		124,049
Provision for discontinued operations		(59	)		(5,361	)		(218	)		(5,454	)
Net (Loss) Earnings	$	(2,722	)	$	(10,752	)	$	(8,484	)	$	118,595

* Fiscal 2009 results restated as a result of retroactive application of FSP APB 14-1.

Earnings Per Share Information

	Three Months Ended						Six Months Ended
				Restated						Restated
	August 1,			August 2,			August 1,			August 2,
In Thousands (except per share amounts)	2009			2008			2009			2008
Preferred dividend requirements	$	49		$	50		$	99		$	99
Average common shares — Basic EPS		21,798			18,513			20,326			19,782
Basic earnings (loss) per share:
Before discontinued operations		($0.12	)		($0.29	)		($0.41	)	$	6.27
Net (loss) earnings		($0.13	)		($0.58	)		($0.42	)	$	5.99
Average common and common equivalent shares — Diluted EPS		21,798			18,513			20,326			24,508
Diluted earnings (loss) per share:
Before discontinued operations		($0.12	)		($0.29	)		($0.41	)	$	5.15
Net (loss) earnings		($0.13	)		($0.58	)		($0.42	)	$	4.93

GENESCO INC.

Consolidated Earnings Summary

	Three Months Ended						Six Months Ended
				Restated						Restated
	August 1,			August 2,			August 1,			August 2,
In Thousands	2009			2008			2009			2008
Sales:
Journeys Group	$	148,592		$	160,960		$	325,439		$	329,722
Underground Station Group		18,561			23,597			45,289			52,601
Hat World Group		108,830			102,169			207,634			189,906
Johnston & Murphy Group		39,054			44,014			78,384			90,585
Licensed Brands		19,402			22,145			47,953			46,893
Corporate and Other		219			253			325			366
Net Sales	$	334,658		$	353,138		$	705,024		$	710,073
Operating Income (Loss):
Journeys Group	$	(3,159	)	$	2,388		$	2,354		$	7,686
Underground Station Group		(3,789	)		(3,038	)		(4,239	)		(4,019	)
Hat World Group		10,526			11,454			17,050			15,179
Johnston & Murphy Group		(459	)		2,994			(302	)		6,677
Licensed Brands		1,987			2,091			5,604			5,646
Corporate and Other*		(7,079	)		(11,246	)		(19,560	)		176,661
(Loss) earnings from operations		(1,973	)		4,643			907			207,830
Loss on early retirement of debt		—			—			5,119			—
Interest, net		1,862			2,873			4,945			5,818
(Loss) earnings before income taxes from continuing operations		(3,835	)		1,770			(9,157	)		202,012
Income tax (benefit) expense		(1,172	)		7,161			(891	)		77,963
(Loss) earnings from continuing operations		(2,663	)		(5,391	)		(8,266	)		124,049
Provision for discontinued operations		(59	)		(5,361	)		(218	)		(5,454	)
Net (Loss) Earnings	$	(2,722	)	$	(10,752	)	$	(8,484	)	$	118,595

*

Includes $3.3 million of other charges in the second quarter of Fiscal 2010 which includes $3.4 million in asset impairments offset by a $0.1 million gain from other legal matters and includes $8.3 million of other charges in the first six months of Fiscal 2010 which includes $7.9 million in asset impairments, $0.3 million in other legal matters and $0.1 million for lease terminations.

Includes $3.3 million of other charges in the second quarter of Fiscal 2009 which includes $2.4 million in asset impairments, $0.6 million for lease terminations and $0.3 million for other legal matters and includes $198.6 million credit in the first six months of Fiscal 2009 of which $204.1 million were proceeds as a result of the settlement of merger-related litigation with The Finish Line and its investment bankers offset by $3.6 million in asset impairments, $1.1 million for other legal matters and $0.8 million for lease terminations. The second quarter and six months of Fiscal 2009 also included $0.3 million and $7.6 million, respectively, of merger-related expenses.

GENESCO INC.

Consolidated Balance Sheet

			Restated
	August 1,		August 2,
In Thousands	2009		2008
Assets
Cash and cash equivalents	$	21,457	$	24,283
Accounts receivable		28,251		23,015
Inventories		332,917		327,986
Other current assets		59,986		41,199
Total current assets		442,611		416,483
Property and equipment		228,712		249,067
Other non-current assets		182,678		170,056
Total Assets	$	854,001	$	835,606
Liabilities and Shareholders’ Equity
Accounts payable	$	119,891	$	133,806
Other current liabilities		60,156		85,995
Total current liabilities		180,047		219,801
Long-term debt		53,042		99,820
Other long-term liabilities		111,981		86,977
Shareholders’ equity		508,931		429,008
Total Liabilities and Shareholders’ Equity	$	854,001	$	835,606

GENESCO INC.

Retail Units Operated — Six Months Ended August 1, 2009

	Balance						Balance						Balance
	02/02/08		Open		Close		01/31/09		Open		Close		08/01/09
Journeys Group		967		50		5		1,012		14		5		1,021
Journeys		805		16		5		816		7		5		818
Journeys Kidz		115		26		0		141		7		0		148
Shi by Journeys		47		8		0		55		0		0		55
Underground Station Group		192		0		12		180		0		4		176
Hat World Group		862		43		20		885		13		15		883
Johnston & Murphy Group		154		9		6		157		4		0		161
Shops		113		6		5		114		3		0		117
Factory Outlets		41		3		1		43		1		0		44
Total Retail Units		2,175		102		43		2,234		31		24		2,241

Retail Units Operated — Three Months Ended August 1, 2009

	Balance						Balance
	05/02/09		Open		Close		08/01/09
Journeys Group		1,018		6		3		1,021
Journeys		818		3		3		818
Journeys Kidz		145		3		0		148
Shi by Journeys		55		0		0		55
Underground Station Group		177		0		1		176
Hat World Group		880		8		5		883
Johnston & Murphy Group		161		0		0		161
Shops		117		0		0		117
Factory Outlets		44		0		0		44
Total Retail Units		2,236		14		9		2,241

Constant Store Sales

	Three Months Ended						Six Months Ended
	August 1,			August 2,			August 1,			August 2,
	2009			2008			2009			2008
Journeys Group		-9	%		2	%		-3	%		1	%
Underground Station Group		-19	%		9	%		-11	%		9	%
Hat World Group		-2	%		7	%		3	%		5	%
Johnston & Murphy Group		-16	%		-4	%		-17	%		-3	%
Total Constant Store Sales		-8	%		4	%		-3	%		3	%

Schedule B

Genesco Inc.
Adjustments to Reported (Loss) Earnings from Continuing Operations
Three Months Ended August 1, 2009 and August 2, 2008

	3 mos			Impact			3 mos			Impact
In Thousands (except per share amounts)	Aug 2009			on EPS			Aug 2008			on EPS
(Loss) earnings from continuing operations, as reported	$	(2,663	)	$	(0.12	)	$	(5,391	)	$	(0.29	)
Adjustments: (1)
Merger-related expenses		—			—			202			0.01
Impairment & lease termination charges		2,114			0.09			1,780			0.07
Other legal matters		(32	)		—			190			0.01
Convertible debt interest restatement (APB 14-1)		172			0.01			462			0.02
Higher effective tax rate (2)		7			—			6,366			0.27
Effect of change in share count from going to a profit from a loss		—			—			—			0.09
Adjusted (loss) earnings from continuing operations (3)	$	(402	)	$	(0.02	)	$	3,609		$	0.18

(1)	All adjustments are net of tax. The tax rate for the second quarter of Fiscal 2010 is 37.29% excluding FIN 48 discrete items of $258,000. The tax rate for the second quarter of Fiscal 2009 before the impact of the settlement of merger-related litigation and deductibility of prior year merger-related expenses is 40.2% excluding a FIN 48 discrete item of $74,000.
(2)	Includes added tax on Finish Line share appreciation and impact on EPS calculation from additional tax in Fiscal 2009.
(3)	Reflects 21.8 million share count for Fiscal 2010 and 23.3 million share count for Fiscal 2009 which includes convertible shares and common stock equivalents in Fiscal 2009.

The Company believes that disclosure of earnings and earnings per share from continuing operations on a pro forma basis adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, in light of the impact of changes in effective tax rates and other items not reflected in those expectations.

Schedule B

Genesco Inc.
Adjustments to Forecasted Earnings from Continuing Operations
Fiscal Year Ending January 30, 2010

Baseline Scenario

	High Guidance				Low Guidance
In Thousands (except per share amounts)	Fiscal 2010				Fiscal 2010
Forecasted earnings from continuing operations	$	25,426	$	1.17	$	23,067	$	1.07
Adjustments: (1)
Convertible debt interest restatement (APB 14-1)		1,014		—		1,014		—
Impairment, other legal matters and lease termination charges		9,063		0.39		9,063		0.39
Loss on early retirement of debt		3,117		0.13		3,117		0.13
Higher effective tax rate		2,540		0.11		2,540		0.11
Adjusted forecasted earnings from continuing operations (2)	$	41,160	$	1.80	$	38,801	$	1.70

(1)	All adjustments are net of tax. The forecasted tax rate for Fiscal 2010 for the baseline scenario is 39.1%.
(2)	Reflects 23.6 million share count for Fiscal 2010 which includes convertible shares and 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.