EXHIBIT 99.1
FINANCIAL CONTACT: JAMES S. GULMI (615) 367-8325
MEDIA CONTACT: CLAIRE S. MCCALL (615) 367-8283
GENESCO REPORTS THIRD QUARTER RESULTS
--DILUTED EARNINGS PER SHARE BEFORE DISCONTINUED
OPERATIONS INCREASE 27% TO $0.62--
--RAISES FISCAL 2006 GUIDANCE--
NASHVILLE, Tenn., Nov. 22, 2005 -- Genesco Inc. (NYSE: GCO) today reported
earnings before discontinued operations of $16.2 million, or $0.62 per diluted
share, for the third quarter ended October 29, 2005. This compares with earnings
before discontinued operations of $12.4 million, or $0.49 per diluted share, for
the third quarter last year. Net sales for the third quarter of fiscal 2006
increased 10% to $316 million compared to $288 million for the third quarter of
fiscal 2005.
Genesco's third quarter earnings reflect a pre-tax gain of $0.9
million, or approximately $0.02 per diluted share, associated with the
conclusion of the settlement of a California employment class action more
favorably than originally anticipated offset by a pre-tax expense of $0.6
million, or approximately $0.01 per diluted share, related to uninsured property
damage from the hurricanes during the quarter.
Genesco Chairman, President and Chief Executive Officer Hal N.
Pennington, said, "Our third quarter performance, which once again exceeded
expectations, was driven primarily by same store sales gains and gross margin
expansion. These results were particularly gratifying given the external
challenges we faced during the quarter -- including hurricanes and rising
gasoline prices -- and some difficult internal comparisons against the previous
year.
"Net sales at Journeys rose 11% to approximately $153 million, and both
same store sales and footwear unit comps increased 5% for the quarter. The
Journeys business was strong across the board. In December, Journeys will open
its 700th store, an important milestone that reflects the vibrancy and national
appeal of the brand. In addition to seeking further growth in its mall-based
store count, Journeys' growth plans include opening additional stores in major
city street locations following a successful opening on 34th Street in
Manhattan, as well as testing other non-mall
venues. Additionally, the continuing strength of the Journeys Kidz business has
led us to accelerate our store opening plans for that concept for next year to
more than double this year's level.
"Net sales at Hat World increased 15% to $68 million and same store
sales were up 1%, which was in line with expectations, and on top of a 12% comp
increase a year ago. Despite the tough comparisons to the robust demand
generated by last year's World Series, the Major League Baseball business was on
plan, and the NFL, NBA and NHL products all performed well. Hat World remains on
track to open about 96 new stores this year, up from 55 last year, and we expect
it will have approximately 642 stores in operation at the end of fiscal 2006.
"Net sales for the Underground Station Group, which includes Jarman,
increased 12% to $38 million and comparable store sales rose 9%. Comparable
store sales at Jarman declined 5%. Underground Station registered another strong
same store sales result, accelerating to a 13% comp increase, following a 12%
gain in the second quarter and an 11% increase in the first quarter. Underground
Station again expanded its operating margin in the quarter by 300 basis points
to 5.1%, driven by better gross margins and improved expense leverage.
"Johnston & Murphy's net sales were up 2% for the quarter to $39
million, same store sales for Johnston & Murphy shops increased 6%, and footwear
unit comps rose 7%. As anticipated, Johnston & Murphy's earnings declined
modestly, primarily due to increased investment in brand advertising. Johnston &
Murphy continued to experience growth in casual and dress casual footwear and
registered solid gains in its accessory business as well.
"Sales of Dockers Footwear were $17 million compared to $18 million for
the same period a year ago. The Stain Defender and Pro Style product has
continued to perform strongly and the early response to its Spring 2006 offering
is good."
Genesco also stated that it is revising its fiscal 2006 guidance
upward. The Company now expects sales for the year to be approximately $1.28
billion and earnings per share to range from $2.34 to $2.35, including the
previously announced charge of approximately $0.04 per share associated with the
settlement of a class action lawsuit (adjusted for its more favorable than
expected conclusion, as discussed above.)
Pennington concluded, "As we look toward the holiday selling season, we
feel good about our product assortment, brand positioning and forward momentum.
We remain focused on improving our platform for growth and driving increased
shareholder value into the future."
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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
vary materially from the expectations reflected in these statements. A number of
factors could cause differences, including 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, 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 the timing of holidays or in the onset of seasonal weather
affecting period to period sales comparisons, changes in buying patterns by
significant wholesale customers, disruptions in product availability or
distribution, unfavorable trends in foreign exchange rates and other factors
affecting the cost of products, changes in business strategies by the Company's
competitors (including pricing and promotional discounts), 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 22, 2005, 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.
Genesco Inc., a Nashville-based specialty retailer, sells footwear,
headwear and accessories in more than 1,700 retail stores in the United States
and Canada, principally under the names Journeys, Journeys Kidz, Johnston &
Murphy, Underground Station, Hatworld, Lids, Hat Zone, Cap Factory, Head
Quarters and Cap Connection, and on internet websites www.journeys.com,
www.journeyskidz.com, www.undergroundstation.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 and Perry Ellis brands. 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
<Table>
<Caption>
Three Months Ended Nine Months Ended
OCTOBER 29, October 30, OCTOBER 29, October 30,
In Thousands 2005 2004 2005 2004
- ------------------------------------------------------------------------------------------------------
Net sales $ 316,336 $ 288,398 $ 877,589 $ 759,863
Cost of sales 154,825 145,030 430,567 383,928
Selling and administrative expenses 133,225 119,492 385,429 330,841
Restructuring and other, net (789) 664 2,255 572
--------- --------- --------- ---------
Earnings from operations before interest 29,075 23,212 59,338 44,522
Interest expense, net 2,669 3,138 7,941 7,916
--------- --------- --------- ---------
EARNINGS BEFORE INCOME TAXES FROM
CONTINUING OPERATIONS 26,406 20,074 51,397 36,606
Income tax expense 10,168 7,691 19,967 13,592
--------- --------- --------- ---------
Earnings from continuing operations 16,238 12,383 31,430 23,014
Provision for discontinued operations, net (95) (440) (30) (461)
--------- --------- --------- ---------
NET EARNINGS $ 16,143 $ 11,943 $ 31,400 $ 22,553
========= ========= ========= =========
</Table>
EARNINGS PER SHARE INFORMATION
<Table>
<Caption>
Three Months Ended Nine Months Ended
OCTOBER 29, October 30, OCTOBER 29, October 30,
In Thousands (except per share amounts) 2005 2004 2005 2004
- --------------------------------------------------------------------------------------------
Preferred dividend requirements $ 67 $ 73 $ 209 $ 219
Average common shares - Basic EPS 22,797 22,041 22,675 21,902
Basic earnings per share:
Before discontinued operations $ 0.71 $ 0.56 $ 1.38 $ 1.04
Net earnings $ 0.71 $ 0.54 $ 1.38 $ 1.02
Average common and common
equivalent shares - Diluted EPS 27,346 26,388 27,106 26,256
Diluted earnings per share:
Before discontinued operations $ 0.62 $ 0.49 $ 1.22 $ 0.94
Net earnings $ 0.61 $ 0.47 $ 1.22 $ 0.92
</Table>
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GENESCO INC.
CONSOLIDATED EARNINGS SUMMARY
<Table>
<Caption>
Three Months Ended Nine Months Ended
OCTOBER 29, October 30, OCTOBER 29, October 30,
In Thousands 2005 2004 2005 2004
- --------------------------------------------------------------------------------------------------
Sales:
Journeys $ 153,109 $ 137,985 $ 400,881 $ 358,011
Underground Station Group 38,395 34,273 110,417 97,864
Hat World 68,330 59,477 199,532 135,518
Johnston & Murphy 38,981 38,256 121,497 118,210
Licensed Brands 17,457 18,334 45,065 50,037
Corporate and Other 64 73 197 223
--------- --------- --------- ---------
NET SALES $ 316,336 $ 288,398 $ 877,589 $ 759,863
========= ========= ========= =========
Pretax Earnings (Loss):
Journeys $ 21,551 $ 17,830 $ 42,270 $ 33,076
Underground Station Group 1,965 720 3,900 862
Hat World 7,615 7,612 22,355 16,614
Johnston & Murphy 1,404 1,881 6,352 5,666
Licensed Brands 1,781 2,140 3,545 5,195
Corporate and Other* (5,241) (6,971) (19,084) (16,891)
--------- --------- --------- ---------
Operating income 29,075 23,212 59,338 44,522
Interest, net 2,669 3,138 7,941 7,916
--------- --------- --------- ---------
TOTAL PRETAX EARNINGS 26,406 20,074 51,397 36,606
Income tax expense 10,168 7,691 19,967 13,592
--------- --------- --------- ---------
Earnings (loss) from continuing operations 16,238 12,383 31,430 23,014
Provision for discontinued operations, net (95) (440) (30) (461)
--------- --------- --------- ---------
NET EARNINGS $ 16,143 $ 11,943 $ 31,400 $ 22,553
========= ========= ========= =========
</Table>
* Includes $0.1 million and $0.6 million of other charges for asset impairment
and lease terminations in the third quarter and nine months of Fiscal 2006,
respectively, and a $0.9 million credit due to a favorable adjustment to the
litigation settlement in the third quarter of Fiscal 2006 and a $1.7 million
charge for the litigation settlement for the nine months of Fiscal 2006.
In addition, the third quarter and nine months of Fiscal 2006 include a $0.6
million charge for uninsured property damage from the hurricanes during the
quarter. Includes $0.7 million and $1.2 million of other charges for asset
impairment and lease terminations in the third quarter and nine months of
Fiscal 2005, respectively, offset by a $0.6 million pension curtailment gain
in the nine months of Fiscal 2005.
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GENESCO INC.
CONSOLIDATED BALANCE SHEET
<Table>
<Caption>
OCTOBER 29, October 30,
In Thousands 2005 2004
- --------------------------------------------------------------------------------
ASSETS
Cash and cash equivalents $ 33,398 $ 15,012
Accounts receivable 22,738 18,823
Inventories 292,798 265,733
Other current assets 26,011 23,905
-------- --------
Total current assets 374,945 323,473
-------- --------
Property and equipment 181,630 168,202
Other non-current assets 159,130 163,775
-------- --------
TOTAL ASSETS $715,705 $655,450
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable $115,993 $ 93,541
Current portion - long-term debt -- 17,000
Other current liabilities 62,671 57,197
-------- --------
Total current liabilities 178,664 167,738
-------- --------
Long-term debt 151,250 175,250
Other long-term liabilities 74,076 73,211
Shareholders' equity 311,715 239,251
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $715,705 $655,450
======== ========
</Table>
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GENESCO INC.
RETAIL UNITS OPERATED - NINE MONTHS ENDED OCTOBER 29, 2005
<Table>
<Caption>
BALANCE ACQUISI- BALANCE BALANCE
01/31/04 TIONS OPEN CONV CLOSE 01/29/05 OPEN CONV CLOSE 10/29/05
- -----------------------------------------------------------------------------------------------------------------------------------
Journeys 665 37 0 7 695 34 0 5 724
Journeys 625 35 0 6 654 33 0 4 683
Journeys Kidz 40 2 0 1 41 1 0 1 41
Underground Station Group 233 21 0 25 229 15 0 14 230
Underground Station 137 21 12 5 165 15 2 6 176
Jarman Retail 96 0 (12) 20 64 0 (2) 8 54
Hat World 0 503 55 0 6 552 73 0 4 621
Johnston & Murphy 148 7 0 13 142 4 0 3 143
Shops 115 3 0 11 107 4 0 2 109
Factory Outlets 33 4 0 2 35 0 0 1 34
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Total Retail Units 1,046 503 120 0 51 1,618 126 0 26 1,718
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
</Table>
RETAIL UNITS OPERATED - THREE MONTHS ENDED OCTOBER 29, 2005
<Table>
<Caption>
BALANCE BALANCE
07/30/05 OPEN CONV CLOSE 10/29/05
- -----------------------------------------------------------------------------------------------------------------------------
Journeys 711 15 0 2 724
Journeys 670 15 0 2 683
Journeys Kidz 41 0 0 0 41
Underground Station Group 226 11 0 7 230
Underground Station 168 11 0 3 176
Jarman Retail 58 0 0 4 54
Hat World 593 30 0 2 621
Johnston & Murphy 142 2 0 1 143
Shops 107 2 0 0 109
Factory Outlets 35 0 0 1 34
----- ----- ----- ----- -----
Total Retail Units 1,672 58 0 12 1,718
===== ===== ===== ===== =====
</Table>
Constant Store Sales
<Table>
<Caption>
Three Months Ended Nine Months Ended
OCTOBER 29, October 30, OCTOBER 29, October 30,
2005 2004 2005 2004
- ------------------------------------------------------------------------------------------------------------------
Journeys 5% 7% 6% 6%
Underground Station Group 9% -5% 9% -6%
Underground Station 13% -2% 12% -5%
Jarman Retail -5% -9% 0% -7%
Johnston & Murphy 5% -1% 6% 2%
Shops 6% 0% 6% 2%
Factory Outlets 5% -2% 5% 3%
----- ----- ----- -----
Total Constant Store Sales 6% 4% 7% 3%
===== ===== ===== =====
</Table>
<Table>
<Caption>
Hat World 1% 12% 4% --
April 1, 2004 - October 30, 2004 -- -- -- 15%
==== ==== ==== ====
</Table>
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