EXHIBIT 99.1
FINANCIAL CONTACT: JAMES S. GULMI (615) 367-8325
MEDIA CONTACT: CLAIRE S. MCCALL (615) 367-8283
GENESCO REPORTS THIRD QUARTER SALES AND EARNINGS
-- COMPANY REPORTS DILUTED EARNINGS PER SHARE OF $0.42;
DISCUSSES EXPECTATIONS FOR FOURTH QUARTER AND FISCAL 2005 --
NASHVILLE, Tenn., Nov. 20, 2003 - Genesco Inc. (NYSE: GCO) today reported net
earnings of $9.4 million, or $0.42 per diluted share, for the third quarter
ended November 1, 2003, compared with net earnings of $10.1 million, or $0.41
per diluted share, for the third quarter last year. Net sales for the quarter
were $212.5 million compared to $213.2 million for the third quarter of fiscal
2003.
Genesco President and Chief Executive Officer Hal N. Pennington, said,
"Better than expected gross margin and lower expenses enabled us to meet our
earnings per share expectations for the quarter, even though sales were lower
than we expected. Sales were affected by a combination of unseasonably warm
weather throughout much of the country and a merchandise trend that extended
the demand for athletic footwear later into the season, slowing the transition
into seasonal casual shoes."
"Journeys' same store sales declined approximately 1% for the quarter,
versus a 1% gain for the same period a year ago, and comps at Underground
Station fell about 7%, compared to an increase of more than 21% last year. Both
businesses were affected by the late onset of fall weather and by the athletic
fashion trend. In response, we have taken a number of steps to improve our
position for the holiday and spring selling seasons. On the product front, we
have increased our commitment in fashion athletic footwear and reduced our
exposure in the more fashion-oriented casual shoe categories. We believe that
colder weather will improve sales in our traditional casual shoe business and
we are well positioned in those brands. In addition, we plan to be more
aggressive with promotions to drive traffic and generate sales. The Jarman
stores' comparable sales declined 11% in the quarter.
"Dockers Footwear's sales declined 24% during the quarter; however, we
believe this business is stabilizing and we look forward to a rebound in sales
late in the first half of next year.
"Johnston & Murphy continues to make progress in its strategy of
focusing on profitable sales and premium positioning. Accordingly, sales
declined slightly, while both gross margin and operating income exceeded our
expectations. In our Johnston & Murphy retail stores, same store sales rose 1%
for the quarter. Average prices in the Johnston & Murphy shops increased 6%,
again reflecting our focus on premium positioning and on dress casual styles."
Due to current market conditions the Company is taking a more
conservative outlook for the fourth quarter of fiscal 2004. The Company now
expects fourth quarter sales to range between $251 million and $254 million and
earnings per share to range from $0.63 to $0.67. The Company also expects
fiscal 2004 sales to range between $836 million and $839 million and earnings
per share to range from $1.16 to $1.20, including the loss of $0.08 per diluted
share on the early retirement of convertible debt refinanced in the second
quarter. For fiscal 2005, the Company expects sales to range between $911
million and $916 million and earnings per share to range from $1.36 to $1.41.
Pennington concluded, "In this dynamic environment we believe our
commitment to understanding our customer is more important than ever.
Fortunately, we have the flexibility to move quickly in response to market
changes. We remain confident that our brands continue to resonate with
consumers and our concepts continue to occupy a compelling position in the
marketplace."
This release contains forward-looking statements, including those
regarding the Company's sales and earnings outlook and all other statements not
addressing solely historical facts or present conditions. Actual results could
turn out materially different from the expectations reflected in these
statements. A number of factors could cause differences. These include weakness
in consumer demand for products sold by the Company, fashion trends that affect
the sales or product margins of the Company's retail product offerings, changes
in buying patterns by significant wholesale customers, disruptions in product
supply or distribution, further unfavorable trends in foreign exchange rates
and other factors affecting the cost of products, changes in business
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strategies by the Company's competitors, the Company's ability to open, staff
and support additional retail stores on schedule and at acceptable expense
levels and to renew leases in existing stores on schedule and at acceptable
expense levels, variations from expected pension-related charges caused by
conditions in the financial markets, 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. The Company
disclaims any obligation to update such statements.
The Company's live conference call on November 20, 2003, at 10:00 a.m.
(Central time) may be accessed through the Company's internet website,
www.genesco.com. The Company expects to discuss results from the third quarter,
and its current expectations for the fourth quarter and fiscal year ending
January 31, 2004, and the fiscal year ending January 29, 2005 during the call.
To listen live, please go to the website at least 15 minutes early to register,
download and install any necessary software.
Genesco, based in Nashville, sells footwear and accessories in more
than 1,040 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.
Table 1
CONSOLIDATED EARNINGS SUMMARY
Three Months Ended Nine Months Ended
---------------------------- -----------------------------
NOVEMBER 1, November 2, NOVEMBER 1, November 2,
In Thousands 2003 2002 2003 2002
----------- ----------- ----------- -----------
Net sales $ 212,483 $ 213,157 $ 584,707 $ 578,592
Cost of sales 113,355 112,318 313,998 304,754
Selling and administrative expenses 82,426 82,197 243,350 232,089
Restructuring adjustment (gain) -- -- (139) --
--------- --------- --------- ---------
Earnings from operations before interest and other 16,702 18,642 27,498 41,749
Loss on early retirement of debt -- -- 2,581 --
Interest expense, net* 1,510 2,162 5,691 5,756
--------- --------- --------- ---------
PRETAX EARNINGS 15,192 16,480 19,226 35,993
Income tax expense 5,780 6,373 7,368 13,721
--------- --------- --------- ---------
NET EARNINGS $ 9,412 $ 10,107 $ 11,858 $ 22,272
========= ========= ========= =========
EARNINGS PER SHARE INFORMATION
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
NOVEMBER 1, November 2, NOVEMBER 1, November 2,
In Thousands (except per share amounts) 2003 2002 2003 2002
----------- ----------- ----------- -----------
Preferred dividend requirements $ 74 $ 73 $ 221 $ 221
Average common shares - Basic EPS 21,751 21,785 21,750 21,858
Basic net earnings per share $ 0.43 $ 0.46 $ 0.54 $ 1.01
Average common and common
equivalent shares - Diluted EPS 22,081 26,985 22,055 27,207
Diluted net earnings per share $ 0.42 $ 0.41 $ 0.53 $ 0.92
* Includes $0.2 million additional net interest expense due to early
retirement of debt for the nine months of Fiscal 2004.
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GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
Three Months Ended Nine Months Ended
------------------------------- -------------------------------
NOVEMBER 1, November 2, NOVEMBER 1, November 2,
In Thousands 2003 2002 2003 2002
----------- ----------- ----------- -----------
Sales:
Journeys $ 121,602 $ 113,777 $ 317,791 $ 296,932
Underground Station/Jarman Group 34,996 36,415 100,291 99,797
Johnston & Murphy 38,760 40,363 118,368 122,269
Dockers 17,023 22,526 48,033 59,518
Corporate and Other 102 76 224 76
--------- --------- --------- ---------
NET SALES $ 212,483 $ 213,157 $ 584,707 $ 578,592
========= ========= ========= =========
Pretax Earnings (Loss):
Journeys $ 16,484 $ 15,464 $ 28,758 $ 31,164
Underground Station/Jarman Group 1,390 2,637 3,181 6,440
Johnston & Murphy 455 992 2,429 6,464
Dockers 1,315 3,305 3,605 7,417
Corporate and Other* (2,942) (3,756) (10,475) (9,736)
--------- --------- --------- ---------
Operating income 16,702 18,642 27,498 41,749
Loss on early retirement of debt -- -- 2,581 --
Interest, net 1,510 2,162 5,691 5,756
--------- --------- --------- ---------
TOTAL PRETAX EARNINGS 15,192 16,480 19,226 35,993
Income tax expense 5,780 6,373 7,368 13,721
--------- --------- --------- ---------
NET EARNINGS $ 9,412 $ 10,107 $ 11,858 $ 22,272
========= ========= ========= =========
* Includes $0.2 million of severance charges in the third quarter of
Fiscal 2003 and a $0.1 million restructuring adjustment and $0.6
million of professional fees and severance charges in the nine months
of Fiscal 2004 and 2003, respectively.
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GENESCO INC.
CONSOLIDATED BALANCE SHEET
NOVEMBER 1, November 2,
In Thousands 2003 2002
----------- -----------
ASSETS
Cash and short-term investments $ 44,306 $ 10,260
Accounts receivable 18,731 24,597
Inventories 205,918 199,773
Other current assets 25,364 29,140
-------- --------
Total current assets 294,319 263,770
-------- --------
Plant, equipment and capital leases 126,842 129,271
Other non-current assets 24,465 13,124
Non-currrent assets of discontinued operations* -- 1,140
-------- --------
TOTAL ASSETS $445,626 $407,305
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 78,318 $ 50,839
Other current liabilities 40,647 45,381
-------- --------
Total current liabilities 118,965 96,220
-------- --------
Long-term debt 86,275 103,271
Other long-term liabilities 45,802 25,578
Shareholders' equity 194,584 182,236
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $445,626 $407,305
======== ========
* Non-current assets of discontinued operations include Volunteer
Leather.
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GENESCO INC.
Table 2
RETAIL UNITS OPERATED - NINE MONTHS ENDED NOVEMBER 1, 2003
BALANCE BALANCE
02/01/03 OPEN CONVERSIONS CLOSE 11/01/03
-------- ---- ----------- ----- --------
Journeys 614 47 0 3 658
Journeys 579 42 0 3 618
Journeys Kidz 35 5 0 0 40
Underground Station/Jarman Group 229 14 0 6 237
Underground Station 114 14 6 2 132
Jarman Retail 115 0 (6) 4 105
Johnston & Murphy 148 5 0 1 152
Shops 115 3 0 0 118
Factory Outlets 33 2 0 1 34
--- -- -- -- -----
Total Retail Units 991 66 0 10 1,047
=== == == == =====
RETAIL UNITS OPERATED - THREE MONTHS ENDED NOVEMBER 1, 2003
BALANCE BALANCE
08/02/03 OPEN CONVERSIONS CLOSE 11/01/03
-------- ---- ----------- ----- --------
Journeys 641 19 0 2 658
Journeys 603 17 0 2 618
Journeys Kidz 38 2 0 0 40
Underground Station/Jarman Group 235 4 0 2 237
Underground Station 125 4 3 0 132
Jarman Retail 110 0 (3) 2 105
Johnston & Murphy 152 1 0 1 152
Shops 117 1 0 0 118
Factory Outlets 35 0 0 1 34
----- -- -- - -----
Total Retail Units 1,028 24 0 5 1,047
===== == == = =====
CONSTANT STORE SALES
Three Months Ended Nine Months Ended
------------------------- --------------------------
NOVEMBER 1, November 2, NOVEMBER 1, November 2,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Journeys -1% 1% -1% -1%
Underground Station/Jarman Group -9% 15% -5% 17%
Underground Station -7% 21% 2% 19%
Jarman Retail -11% 10% -12% 16%
Johnston & Murphy 1% 4% -2% 1%
Shops -1% 6% -3% 1%
Factory Outlets 7% -2% 2% 1%
-- -- -- --
Total Constant Store Sales -2% 4% -2% 3%
== == == ==
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