[GENESCO LOGO]
Genesco Inc.
Genesco Park, Suite 490
P.O. Box 731
Nashville, Tennessee 37202-0731
615-367-8283
615-367-8278 Facsimile
www.genesco.com
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Financial Contact: James S. Gulmi (615) 367-8325
Media Contact: Claire S. McCall (615) 367-8283 Financial News
GENESCO REPORTS FIRST QUARTER RESULTS
--DILUTED EARNINGS PER SHARE INCREASE 73% TO $0.26 ON 17% SALES RISE--
--RAISES FISCAL 2005 GUIDANCE--
NASHVILLE, Tenn., May 26, 2004 - Genesco Inc. (NYSE: GCO) today reported net
earnings of $5.8 million, or $0.26 per diluted share, for the first quarter
ended May 1, 2004. This compares with net earnings of $3.3 million, or $0.15 per
diluted share, for the first quarter last year. Net sales for the first quarter
of fiscal 2004 were $226 million compared to $193 million for the first quarter
of fiscal 2004.
Genesco President and Chief Executive Officer Hal N. Pennington, said,
"These strong results represent a great start for the new fiscal year and
underscore the improvements we have made across our businesses. Our positive
momentum has given us a heightened degree of confidence about our prospects,
enabling us to increase guidance for the year.
"Journeys' same store sales increased 9%, footwear unit comparable sales
rose 9% and margins came in above plan, due primarily to lower than anticipated
markdowns. Our better than expected sales were driven by solid gains in footwear
units, growth in accessories, and moderation in the decline in average selling
price. We are very excited about these developments and we remain committed to
further capitalizing on Journeys' leadership position in the market.
"Comparable store sales for the Underground Station Group declined 3%
for the quarter, but operating margin increased due to improved gross margin.
Comparable store sales in the Underground Station stores declined 2%, compared
to an increase of more than 7% last year. Much like what happened at Journeys
last year, we believe Underground Station is being impacted by a lack of any
distinctive fashion trends and a decline in average selling prices. On the
positive side, footwear unit comps for the Underground Station stores were up
2.7%. While we do not expect to see much sales improvement in the second quarter
in the Underground Station stores, we are optimistic about the second half of
the year as comparisons improve from both a same store sales and a merchandising
perspective.
-more-
GENESCO - ADD ONE
"Total sales at Johnston & Murphy were $41 million and same store sales
increased 8%, driven by increases in average price per pair in the Johnston &
Murphy shops. We were also pleased to achieve some significant operating margin
expansion at Johnston & Murphy during the quarter, despite the ongoing effects
of a stronger euro. The strategic plan to reposition the Johnston & Murphy brand
that we implemented over a year ago appears to be working well.
"Dockers Footwear registered operating income as a percent of sales of
10% on sales of $17.5 million in the first quarter. Based on current trends, we
believe that we will see top line improvement in the Dockers business during our
second fiscal quarter, which is earlier than we previously expected.
"Hat World, which we acquired on April 1, 2004, outperformed plan in
both sales and operating margin. Hat World reported a same store sales gain of
23% for the first quarter and 20% for the month of April. These excellent
results, which came against difficult comparisons to a strong quarter last year,
were driven by a number of favorable trends in the merchandise mix. The
integration process since the acquisition has been very smooth; the Hat World
business continues to be strong and we are excited about the growth
opportunities this business represents."
Genesco also stated that it is revising upward its fiscal 2005 guidance.
The Company now expects sales for the year of approximately $1.1 billion and
earnings per share to range from $1.74 to $1.80, including previously announced
charges of approximately $0.09 per share associated with the planned closing of
Jarman and other underperforming stores in fiscal 2005.
Pennington concluded, "It is gratifying to see the positive results of
all of our hard work over the past several quarters. We believe that our
in-depth knowledge of our customers, our branded lifestyle focus and our ability
to react quickly and execute our strategy set us apart from our peers. We will
continue to draw on these strengths as we seek long-term growth and
profitability."
-more-
GENESCO - ADD TWO
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 strategies by
the Company's competitors, the integration of the Hat World acquisition, the
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. The Company's diluted earnings per
share outlook is based upon the number of common shares currently treated as
outstanding pursuant to applicable accounting rules. That number will increase
if the Company's 4.125% convertible debentures become convertible under
circumstances including the trading price of the Company's common stock reaching
$26.54 for 10 of the last 30 trading days in any fiscal quarter. The debentures'
becoming convertible would add approximately 3.9 million shares to shares deemed
outstanding for calculation of diluted earnings per share. Forward-looking
statements reflect the expectations of the Company at the time they are made.
The Company disclaims any obligation to update such statements.
-more-
GENESCO --- ADD THREE
The Company's live conference call on May 26, 2004, at 7:30 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 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 Inc., a Nashville-based specialty retailer, sells footwear,
headwear and accessories in more than 1,500 retail stores in the United States,
principally under the names Journeys, Journeys Kidz, Johnston & Murphy,
Underground Station, Hatworld, Lids, Hat Zone and Cap Factory, and on internet
websites www.journeys.com , www.johnstonmurphy.com, www.lids.com,
www.hatworld.com, and www.lidscyo.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.
GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
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Three Months Ended
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MAY 1, May 3,
In Thousands 2004 2003
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Net sales $ 225,526 $ 192,746
Cost of sales 114,848 104,654
Selling and administrative expenses 99,230 80,653
Restructuring and other charges (146) --
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Earnings from operations before interest 11,302 7,439
Interest expense, net 1,882 2,032
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PRETAX EARNINGS 9,420 5,407
Income tax expense 3,596 2,070
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NET EARNINGS $ 5,824 $ 3,337
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EARNINGS PER SHARE INFORMATION
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Three Months Ended
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MAY 1, May 3,
In Thousands (except per share amounts) 2004 2003
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Preferred dividend requirements $ 73 $ 74
Average common shares - Basic EPS 21,763 21,743
Basic net earnings per share $ 0.26 $ 0.15
Average common and common
equivalent shares - Diluted EPS 22,227 22,009
Diluted net earnings per share $ 0.26 $ 0.15
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GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
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Three Months Ended
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MAY 1, May 3,
In Thousands 2004 2003
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Sales:
Journeys $ 114,241 $ 98,715
Underground Station/Jarman Group 35,129 34,573
Hat World 18,085 --
Johnston & Murphy 40,541 40,216
Dockers 17,480 19,189
Corporate and Other 50 53
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NET SALES $ 225,526 $ 192,746
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Pretax Earnings (Loss):
Journeys $ 9,272 $ 5,563
Underground Station/Jarman Group 1,622 1,560
Hat World 1,597 --
Johnston & Murphy 2,341 1,800
Dockers 1,744 2,553
Corporate and Other (5,274) (4,037)
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Operating income 11,302 7,439
Interest, net 1,882 2,032
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TOTAL PRETAX EARNINGS 9,420 5,407
Income tax expense 3,596 2,070
NET EARNINGS $ 5,824 $ 3,337
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GENESCO INC.
CONSOLIDATED BALANCE SHEET
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MAY 1, May 3,
In Thousands 2004 2003
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ASSETS
Cash and cash equivalents $ 11,536 $ 57,671
Accounts receivable 13,465 19,394
Inventories 215,190 163,769
Other current assets 24,567 23,001
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Total current assets 264,758 263,835
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Property, equipment and capital leases 146,319 126,979
Other non-current assets 164,052 25,077
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TOTAL ASSETS $575,129 $415,891
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LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $ 67,207 $ 41,694
Current portion - long-term debt 10,000 --
Other current liabilities 52,927 38,291
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Total current liabilities 130,134 79,985
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Long-term debt 180,250 103,245
Other long-term liabilities 42,659 46,117
Shareholders' equity 222,086 186,544
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $575,129 $415,891
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GENESCO INC.
RETAIL UNITS OPERATED - THREE MONTHS ENDED MAY 1, 2004
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BALANCE BALANCE ACQUISITION BALANCE
02/01/03 OPEN CONV CLOSE 01/31/04 04/01/04 OPEN CONV CLOSE 05/01/04
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Journeys Group 614 55 0 4 665 13 0 1 677
Journeys 579 50 0 4 625 12 0 1 636
Journeys Kidz 35 5 0 0 40 1 0 0 41
Underground Station/Jarman Group 229 18 0 14 233 5 0 7 231
Underground Station 114 18 8 3 137 5 1 1 142
Jarman Retail 115 0 (8) 11 96 0 (1) 6 89
Hat World/Lids 0 0 0 0 0 486 6 0 0 492
Johnston & Murphy 148 7 0 7 148 2 0 3 147
Shops 115 5 0 5 115 0 0 3 112
Factory Outlets 33 2 0 2 33 2 0 0 35
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Total Retail Units 991 80 0 25 1,046 486 26 0 11 1,547
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CONSTANT STORE SALES
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Three Months Ended
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MAY 1, May 3,
2004 2003
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Journeys 9% -3%
Underground Station/Jarman Group -3% -2%
Underground Station -2% 7%
Jarman Retail -4% -10%
Johnston & Murphy 8% -7%
Shops 6% -7%
Factory Outlets 14% -8%
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Total Constant Store Sales 6% -3%
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Hat World
Constant Store Sales
April 1, 2004 - May 1, 2004 20%
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