EXHIBIT 99.1
Financial Contact: James S. Gulmi (615) 367-8325
Media Contact: Claire S. McCall (615) 367-8283
GENESCO REPORTS FIRST QUARTER SALES AND EARNINGS
NASHVILLE, Tenn., May 22, 2003 - Genesco Inc. (NYSE: GCO) today reported net
earnings of $3.3 million, or $0.15 per diluted share, for the first quarter
ended May 3, 2003, compared with $8.2 million, or $0.33 per diluted share, for
the first quarter last year. Net sales for the quarter were $193 million
compared to $191 million for the first quarter of fiscal 2003.
Genesco President and Chief Executive Officer Hal N. Pennington,
said, "Our results for the quarter reflect the general retail environment and a
level of demand for seasonal merchandise that was behind both historical norms
and our expectations. We were, however, pleased to see continued strength in our
Underground Station stores and some signs of progress at Johnston & Murphy."
"Journeys same store sales declined 3% during the quarter, due
primarily to weakness in seasonal footwear, with sales of sandals and other
"open" styles down more than 25% and average prices down 10% in the category. In
response, we have accelerated our promotional activity in this product category
and we intend to reduce inventories to seasonally appropriate levels by the end
of the second quarter."
Pennington continued, "Underground Station posted another strong
quarter, with same-store sales up 7% despite tough comparisons. We saw continued
strength in women's and athletic footwear as well as apparel. We remain very
optimistic about the growth potential of this concept. Unfortunately, Jarman
stores felt the effects of the retail environment and same store sales fell 10%,
giving the Underground Station/Jarman segment a combined same store sales
decrease of 2%. The relative performance of the two businesses reinforces our
strategy of continuing Underground Station's expansion and opening no additional
Jarman stores."
"We made solid progress with Johnston & Murphy in the quarter,
giving us a heightened degree of confidence that the strategy we put in place
last year to strengthen the business is working.
Although retail same-store sales declined, our wholesale business came in above
plan. We are focused on continuing to build on the brand's equity and improve
its financial performance.
"Dockers Footwear's sales fell 19% during the quarter to $19 million
due to a combination of factors, including lower levels of at once orders
associated with retailer conservatism and fewer close-out shipments than last
year. We are pleased that Dockers operating margins improved, driven by
increased gross margins. We will continue to focus on asset management and
expense control as Dockers works its way through this slower sales period."
Pennington commented, "We see the second quarter unfolding as a
continuation of first quarter trends. We continue to believe our prospects for
the second half are good, as we move past the seasonal product issues and into
what is historically the stronger part of the year for our retail businesses.
Because of continuing economic uncertainty, we have built some additional
conservatism into the lower end of our range of guidance for the second half.
Any improvement in the retail climate would improve our prospects, as well."
The Company now expects second quarter sales to range between $179
million to $181 million and earnings per share to be breakeven. For the third
quarter, the Company expects sales to range from $224 million to $233 million
and earnings per share to range between $0.41 to $0.48. For the fourth quarter,
the Company expects sales to range from $266 million to $278 million and
earnings per share to range between $0.72 to $0.82. The Company also stated that
for fiscal 2004 it expects sales to range between $862 million to $885 million
and earnings per share to range between $1.32 to $1.50.
Pennington concluded, "The underlying fundamentals of our business
are sound, our strategy is intact and our financial position is strong. We
remain committed to capitalizing on the opportunities that lie ahead."
This release contains forward-looking statements, including those
dealing with expectations for the Company's and each division's performance for
the second quarter and thereafter. Any statements that do not reflect purely
historical information involve a number of known and unknown risks and
uncertainties. Actual results could be materially different. The factors that
could cause materially different results include lower than expected consumer
demand
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for the Company's products, whether caused by weakness in the overall economy or
by changes in fashions or tastes that the Company fails to anticipate or respond
appropriately to, changes in buying patterns by significant wholesale customers,
disruptions in product supply or distribution, the inability to adjust inventory
levels to sales and changes in business strategies by the Company's competitors.
Other factors that could cause results to differ from expectations include the
Company's ability to open, staff and support additional retail stores on
schedule and at acceptable expense levels, and the outcome of litigation and
environmental matters involving the Company. Forward-looking statements reflect
the expectations of the Company at the time they are made, and investors should
rely on them only as expressions of opinion about what may happen in the future
and only at the time they are made. The Company undertakes no obligation to
update any forward-looking statement.
The Company's live conference call on May 22, 2003, at 10:30 a.m.
(Central time) may be accessed through the Company's internet website,
www.genesco.com. The Company expects to discuss results from the first quarter
and its current expectations for the second quarter and fiscal year 2004, during
the call. To listen live, please go to the website at least 15 minutes early to
register, download and install any necessary software. A replay will be
available shortly after the call.
Genesco, based in Nashville, sells footwear and accessories in more
than 1,000 retail stores in the U.S., principally under the names Journeys,
Journeys Kidz, Johnston & Murphy, Jarman and Underground Station, and on
internet websites www.journeys.com and www.johnstonmurphy.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 website www.genesco.com.
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GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
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Three Months Ended
----------------------
MAY 3, May 4,
In Thousands 2003 2002
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Net sales $192,746 $190,593
Cost of sales 104,654 100,445
Selling and administrative expenses 80,653 75,226
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Earnings from operations before interest 7,439 14,922
Interest expense, net 2,032 1,672
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PRETAX EARNINGS 5,407 13,250
Income tax expense 2,070 5,048
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NET EARNINGS $ 3,337 $ 8,202
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EARNINGS PER SHARE INFORMATION
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Three Months Ended
----------------------
MAY 3, May 4,
In Thousands (except per share amounts) 2003 2002
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Preferred dividend requirements $ 74 $ 74
Average common shares - Basic EPS 21,743 21,876
Basic net earnings per share $ 0.15 $ 0.37
Average common and common
equivalent shares - Diluted EPS 22,009 27,314
Diluted net earnings per share $ 0.15 $ 0.33
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GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
================================================================================
Three Months Ended
----------------------
MAY 3, May 4,
In Thousands 2003 2002
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Sales:
Journeys $ 98,715 $ 91,474
Underground Station/Jarman Group 34,573 33,199
Johnston & Murphy 40,216 42,365
Dockers 19,189 23,555
Corporate and Other 53 --
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NET SALES $192,746 $190,593
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Pretax Earnings (Loss):
Journeys $ 5,563 $ 8,203
Underground Station/Jarman Group 1,560 2,650
Johnston & Murphy 1,800 4,107
Dockers 2,553 2,787
Corporate and Other (4,037) (2,825)
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Operating income 7,439 14,922
Interest, net 2,032 1,672
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TOTAL PRETAX EARNINGS 5,407 13,250
Income tax expense 2,070 5,048
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NET EARNINGS $ 3,337 $ 8,202
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GENESCO INC.
CONSOLIDATED BALANCE SHEET
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MAY 3, May 4,
In Thousands 2003 2002
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ASSETS
Cash and short-term investments $ 57,671 $ 44,266
Accounts receivable 19,394 22,513
Inventories 163,769 143,448
Other current assets 25,839 27,391
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Total current assets 266,673 237,618
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Plant, equipment and capital leases 126,979 125,419
Other non-current assets 22,332 13,440
Non-current assets of discontinued
operations* -- 499
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TOTAL ASSETS $415,984 $376,976
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 41,694 $ 38,243
Other current liabilities 38,291 40,002
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Total current liabilities 79,985 78,245
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Long-term debt 103,245 103,245
Other long-term liabilities 46,210 24,507
Shareholders' equity 186,544 170,979
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $415,984 $376,976
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*Non-current assets of discontinued operations include Volunteer Leather.
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GENESCO INC.
RETAIL UNITS OPERATED
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BALANCE BALANCE BALANCE
02/02/02 OPEN CONV CLOSE 02/01/03 OPEN CONV CLOSE 05/03/03
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Journeys Group 533 82 0 1 614 18 0 1 631
Journeys 519 61 0 1 579 16 0 1 594
Journeys Kidz 14 21 0 0 35 2 0 0 37
Underground Station/Jarman Group 227 11 0 9 229 8 0 1 236
Underground Station 97 11 8 2 114 8 0 0 122
Jarman Retail 130 0 (8) 7 115 0 0 1 114
Johnston & Murphy 148 4 0 4 148 2 0 0 150
Shops 116 2 0 3 115 1 0 0 116
Factory Outlets 32 2 0 1 33 1 0 0 34
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Total Retail Units 908 97 0 14 991 28 0 2 1,017
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CONSTANT STORE SALES
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Three Months Ended
-------------------
MAY 3, May 4,
2003 2002
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Journeys -3% -3%
Underground Station/Jarman Group -2% 19%
Underground Station 7% 16%
Jarman Retail -10% 21%
Johnston & Murphy -7% 1%
Shops -7% -1%
Factory Outlets -8% 8%
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Total Constant Store Sales -3% 2%
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