GCO - Earnings call transcript Q1 2019

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Operator

Good day everyone and welcome to the Genesco's First Quarter Fiscal 2019 Conference Call.

Just a reminder, today's call is being recorded. Participants on the call expect to make forward-looking statements. These statements reflect the participants' expectations as of today, but actual results could be different. Genesco refers you to this morning's earnings release and to the Company's SEC filings, including in the most recent 10-K filing, for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made during the call today. refer adjusted to the measures expect call. also to financial certain during Participants measures the quarterly to to reconciled non-GAAP Investor available referred All financial homepage Company's in release in GAAP under in on the press in to counterparts prepared section. the morning's attachments the this Relations and schedules results their are remarks now Chief Executive and turn Chairman, Genesco's President the I'll call Dennis, over to Bob Officer. Please ahead, sir. go

Robert Dennis

Officer, thank and by for being Vaughn. I'm us. today Financial you with our joined Chief Good Mimi morning

profitability. comp Our particular, our continued in year quarter. difficult businesses range our first in negative, the were Johnston total company a footwear sales still quarter Journeys, Murphy results improved a expectations. delivered for trends with strong began well. in the and following the as comp profit at improvement and U.S strength sales of improving, a accelerating although robust fourth & experienced Lids We gain significantly and in

Schuh's of building on years. with While stores over averaging XX%, increases and up across track X% the e-commerce the pressured down nine decreased number Atlantic, the double-digit X% headwinds our In performance comps start last a of total, growth e-commerce record year. strong to

negative was by the in challenges per year-ago, compared a were than offset First Journeys, Murphy more earnings per strong and positive at $X.XX quarter adjusted and share to earnings improvement of adjusted $X.XX share a Johnston Schuh. & Lids

snowy New major are arrives. when refunds typically the heavily for sales and far is the quarter the finally a volume a tax you As shifts shaped spring After the stretches first into how From by merchandise Easter monthly and Genesco by fiscal winter levels one low Easter, an know, Year timing influenced of holiday. perspective, followed with refunds cold comps a to tax led impact February allowed strong comp and results the boot along closely year, this year with us earlier last for which the with season year-over-year. extend aligning resulting the A timing March little to month. the same in of refunds, cadence to later

boosted sales on both sides of on arrival three were the which the While picked of over Easter this with comps last sales trending And results. affected was by quarter that for weeks our April early their seasonal carried to the with weather second into businesses of QX coincided Atlantic of during up product. the better May the offset all of warmer than quarter, momentum date

product in strong plays we the in for retro athletic number of proliferated each lifestyle on but and with both momentum brands in demand the a spring trends athletic early line assortment. lifestyle greater experienced have quarter of performance, throughout This sandals Journeys. driving of other with teen Looking into starting came the throughout and our that the been quarter top we positive classic at business e-commerce store in and a fueled results should which later The positive, QX for provide athletic into of the footwear. franchises, and year. and fashion momentum as first Journeys quarter. strength double-digit of continued quarter, QX us after holidays fashion sweet spot the the performance by current in have nicely house boots moderated the with they the product would above expectations the businesses during The our of Journeys' thought positioning our Comps as merchandise

Murphy. to carried Johnston nice QX & thus momentum the warmer far. Shifting in a With uptick weather, Journeys this comps into has with

trend and very accelerated strongly online, far the performance. casual fourth is sales consumers, eight even and was years with saw J&M's solid quarter apparel accelerate Following full while to comps with New driving we resonating improvement strong the start selling in and on consecutive increases, compared footwear Year great Lids still QX comps a it negative, quarter. QX. in-store and of nice showed have as further following also fourth in price the a thus weather both conversion with offering comps, warmer

businesses this and Lids, stores of the MLB lapping we the months. by a subject aggressive cleared is of loss positioned for lower have underperforming number and cycles not our is new biggest believe to the headwinds to mix. between the once win and other Comps is fashion a has it the resurgence overall as several deleveraged SG&A we been, larger strong we World were profitability driver Cubs store as leader, which driver Series had a the better been happen anticipated. we've was as currently slightly past of became expected than traffic We sales the we And as closed would like pronounced the emerge. QX headwear a and part comps, implemented on [halved][ph] over cost-saving not measures Lids enjoying negative category a Journeys as on major is of while impact fashion that type experienced. the trends,

history So will rebound. of when points we occur, specific timing a know don't to this the

Our and the but the started of Thus last new towards store decade a comps we QX stores steep wall end improved a trends through summer trend. the levels, see XXs until history remain anniversary further in and in traffic with Lids we four decline cycle tremendous emergence cautious half we year major of of profit to far, that long in at fashion have successfully. shows a ability demonstrating the almost teens QX, above

Year. from QX into the The up footwear for the U.K. to very against season last year. double-digit New Turning weak Schuh. Schuh apparel that a of and comps was drove demand this, promotional On top persisted holiday in

due persisted demand in in even the extreme U.S., the quarter The in limiting While of product the significantly weather merchandise certain top-selling positions worst in longer April. styles a model, late and U.K. winter cold some time. the unseasonably some the to of the sector trading and vendors March impeded lasted weather in constraints some environment spring to retail also into some was difficult supply diminishing pursue performance conditions by U.K. results in U.K. resulted Schuh's scarcity for

all which QX result in this, these become declined The comps this expense generated performance of a so And thus volume team headwinds much low navigate less negative quarter. to far. digits in and double hard Schuh significant has deleverage working is as

While become retail apparel. the comparisons spending, the easier the remains and by characterized U.K and environment tepid footwear going gotten has warmer, forward challenging particularly on weather

QX, -- between current QX we than sales at behind encouraged businesses, of In we of better in except in performance a as seasonal the more signs the the with this expect expected the outlook, weather scarce but improve gotten degree prospects. stimulating In to relevance about have availability in of overall of the results Schuh's of have addition, trends. U.K our direct remain QX extent product effect given off all summary, while a in product fashion to will comps respect this a we're product, improvement in the improvement current was driving force cautious summerlike of And elsewhere, solid by to With our retail start. Schuh. near-term on

-- We the reflect This current close in a entire $X.XX our if to this current were the $X.XX. as at guidance the guidance range of many best regard to do sports from to are We the earnings for per come range some downside year. continues might of something it by where to middle and impact retail Lids with year. potential as environments, us and includes the owned adjusted our guidance we some out upside reflecting variables for share belief licensed the for us reiterating

to in building capital as comments. streamlining the of out look reduce our the initiatives capabilities, well rent behavior and as fiscal fortifying experience, aimed we're talked in capital to our savings expense, at doing about we estate spending. our cover As her focus connections, response to will addition key 'XX, the been model broader structure environment. have are in strengthening on cost our the customer retail ongoing to of leadership program our the change work and business executing operating initiatives omni-channel Mimi evolving in and evolution real risk, enhancing in-store we’ve our spending cost These consumer and each positions

Let me initiatives. four briefly update facing on our consumer you

both businesses, a illustrate on progress customer's raising value for us. of improve the all the one and the highlight technology of and worlds game the Number across side. of name important While and the in as is digital continuous each experience maximize will loyalty scale to keep especially And digital initiatives, of range initiatives, the underway and our In these wide two is to physical advantage. build initiatives examples each these making. each competitors to therefore we're and or the in are customer bar, I competitive improvement category one, represents

to the Pack An with NBA exciting colors Prism follows embroidery single new enhance behavior done serve focused and launch intent matched data of to them. features the window to now view view allow seven gave product worthy sources supported customers launch in launch internal the to friction the traffic the excitement drive personalized first trend here and for offers independent and experience a major This gather in devices have which stores of of we in their product color Lids' digital its of and select preferences two, are and XXXX customer and banners -- customer Major them stores exteriors the draw on our stickers. understand at work the League with accounts. channels solutions channel. phase from the messages, and present silhouette implement content, their and of locations. exclusive have here and in-store few online through interiors, brick-and-mortar Journeys a of This Lids work technology a better to needs. iconic of first event create era accounts. Lids and to and Baseball all enhanced displays, is Lids a to bringing May own of and pain sources and solve an unified the create a Journeys to transactions with Number the footwear and their tackle blackout across marketing external Color two-tone to and building of the collections. in these example platform all-black data roadmap process efforts will to to media social also channel to that our improvements X-year point the attention clings exposure customers and through and was has collection was and The the the is

support Those it digital check out. stop and a the Number area, be We as larger building by expansion capabilities. here interactive recently the held of omni-channel to center. multiples to orders. Times a We you put-and-pack distribution getting with store which by in making walls more are features customized a direct opening and announce rapid Square build cleaner direct The singles features of specialized customer and assortments also Lids the marry new of orientation module narrower presentations, more the product the using capability the out faster. ribbon-cutting will We've for showcase Journeys a not cost-effective, to product location e-commerce only to which embroidery. picking, remodeled invested excited such three, the of experiences for and design but by on also up shipments customer to emphasis workstations dedicated growth e-commerce Journeys out sure for

of unique that user we're finally, aimed Web in affinity. on the Starting & brands. individualize QX, great behavior with new Murphy promotion addition, a Journeys store with with celebration product in equity Journeys moments moment store of functionality browsing high the and for And look channels overall quintessential customers prom of bring is speed as massive redesign in social predictive a lucky the citywide platform. strengthening Johnston to was votes a a example prom-themed winner this across ran important Schuh based a millions enthusiastic to complement and winner February, the of for Both destination one social Houston big leveraging on Journeys nationwide captured all live search to we're the about enhancing the Journeys media. positioning artificial a number party, parts footwear student's the greater capabilities efforts city site media multiple XX-day of pleased to In were life, of platforms. direct retail impressions based four, And gathered The campaign, prom at these. is work like the and garnered was our school tens teen gives the and which doing through here. went intelligence which of our the experience the fashion new campaign

expect to have say process, comes provide Now, conclusion. to Since we're and the shifting the process to the won't of about anything today, gears. Lids a don't in that until any middle sale we update

from meantime report, news taking us, as we be topic. can but on As we appreciate, questions the hearing not soon you you commenting or are in have this about will as to

get like I’d to start. our to off their for teams thank solid a the Finally, efforts to year

well-positioned We in that them their and of that one businesses their are have leaders potential. each categories great undisputed can behind people maximize

especially and the there. pleased with a and would talent like the prospects dedication at of both salute & Murphy our Johnston strong are We and year for people very the Journeys to

are businesses. way We improvement their at see the business these midst the And happen focus required and finally, distractions hard licensed the business want the follows. the Schuh headwinds pleased Lids appreciate all to commitment and sale dedicated of of current and that who possible in a recognize the and are exploring signs of facing working that make we in teams to brands to and make through to skilled our

go our let Our and turn over greater all to of And guidance well. financials Mimi, and over detail. employees all rest to to will it of in out go the me with as them the thanks that, who

Mimi Vaughn

you, Good Thank Bob. morning.

detailed our in the posted as strong results Johnston also commentary our you can that in access a new CFO brief The site. in information you performance part we online there presentation businesses of our find have posted We’ve usual, our and in which offset at declines Journeys As other can summarizes QX. guidance, & Murphy and well. Web more

this due especially largely consolidated quarter. expense flat million. businesses volume turn all Schuh's eclipsed and our this margins, the comps in than low impacted which business. at QX to difficult SG&A with expense were across in the expected, was base, significant first Even retail While negative revenue store fixed bottom $XXX the gross results store manage by was delevered is and improved line to down our U.S better

up decreased would Excluding X%. direct the impact X% have were comps rates, XX%. down down revenue and by with comps comps of X% exchange Consolidated store

on sales business. Although they store made sales and total, percent driving sales Journeys tremendous the positive retail as nicely Direct in the Schuh XX% on footwear up acceleration assortment, average quarter generated higher size at conversion year-ago. average the plus retail over QX e-commerce we XX%, in was XXX in in points for again a improved products posted Journeys up conversion. comps were were negative Price our QX stronger progress almost Considerably comp. basis sales total J&M. up demonstrating impact have of and significantly together comparison and and to up year-over-year began plus profits. driven boot by improved delivered well Murphy's were X% taking ASPs. a of increases higher by This that priced ticket of and last J&M footwear growth propelled higher sales in-store Both performed fashion and from nice fourth J&M' athletic sandal, to of which were positive both traffic and and multiple very non-footwear stout began Comps in of digital the products ticket a X% and increases. had more quarter. ticket by consecutive casual QX Sales highlighted comp The no average quarter were combination a Johnston units strong meaningfully stores across the size. select comps. and which was positive continued marking fall better business dimensions, contribute ASPs size drove a against

paying in quarters in be achieved marks traffic to the swing four quite markdown have all QX and comp the store improved negative, X% invested result sales of a people degree due this systems and shallow challenged with These had and driver but fourth this higher, in big in accomplish in of comps merchandising to year a better hat size. and negative positive ASPs fashion year. Lids' comps to difficult conversion teens of the the continued the higher season. importance from last we’ve and major been transaction actions Both a in of business, the mix but were availability the all QX, softness much impact. improved of unseasonably The is a direct cadence less by as more working the shallow taking informed We've business was been we’ve and was in over much both off product hockey cold of was the discussed. of to in-demand negative highlighting higher. factor and lack quarter QX, positive baseball earlier Canadian yielding strong XX% and the conversion which The traffic total, both were the MLB lack the levels. season, in negative weather transaction a markdowns some branded this. of continued were challenge was While representation the to decisions improve both increasing leading more were store in comps playoff start size in

basis shipping In have which to increased benefiting in addition, basis XXX its points gross gross related Lids, higher Schuh basis full from XX some slower to activity due markdown for been XX and well. shipping basis points mix baseball basis to last IMOs XX warehouse margin mix higher sales this and At would moving margin margin consolidated year's priced without event and e-commerce as year. it additional warehouse this sales, made XX shipping points primarily due the as been largely basis brand Journeys QX to continuing expense. is result points comparisons lower tough every by extra clear year four expense strong markdowns. would due retail a margin was have margin expense and at of up expense higher basis channel e-commerce was points XX.X%. selling At sales Cubs higher of J&M, year points margin lack an gross Gross extra gross points Without the lower down down increased sales product. e-commerce world to XX gross XX to increased was higher. from and classic,

for and this gross Total of Finally, for and primarily dress athletic to been and would due men's a benefits of a cycle the store other expense of midst expense rent been and rent to greater. reductions. from the percent negative pressure a and XX wage Lids from store been experienced savings we've the without of getting, drove closings, exchange We businesses. deleverage Without basis licensed bonus of with deleverage closeout we similar this brands increases rate rate expense saw with expense XX.X% impact increased salaries points would connection casual talked and flat competitor sales wage cost dollars continued due mid total challenges a increased weak the rent been quarter margin increases, deleverage shoes in well. Journeys amount We’ve strong small basis quarter in selling footwear demand significant SG&A as XXX of points. comps, our living impact on the the to in but sales with better performing the higher about have wage decrease increases. minimum and with Schuh as and single-digit wage increases has this facing

basis for down. operating the result quarter. loss of operating adjusted and flat QX's $X.X was and the year. last XX up to points Adjusted other were versus of million operating was So margin income businesses million OI Journeys an J&M decreased net $X.X

down sales adjusting businesses. a later. not over shape XX% rather carrying the Lids' sales in foreign increase X% sheet, of good product down season X% rebuy the on total sales X% of of on inventory on is sports for on flat to Journeys down including QX across a new was into sales decrease was inventory J&M's exchange. was X%. inventory even is now was inventory than XX% X%. marking to Turning all inventory a increase down down balance Lids

soon quarter advances. much depreciation expenditures will a Schuh's the as were the two of amortization in Finally, But Capital seasonal million X% repurchase under $XXX quarter year the summer million taken remaining bring versus debt as is of repurchase did $XX and and and $XX on inventory have already of million line. that a this down million we X%, step not year-ago. sales a end Total on is up decrease sell-through currency to we constant $XX XX% first product these this We shares was authorization. was have current the as basis. the at during the

per guidance earnings 'XX, to for adjusted to to from now range fiscal $X.XX. reiterate we $X.XX Moving share

discussed before, this wider because As usual we’ve potential of a variables. few is than range

traffic The flat. seeing. digital guidance been and Store stores to first is has down we comps into dilutive range the earnings and continue out our sales whether the will pace underlying decline which of to at have been mall shift from roughly X% in

new half comps the sales start spite visibility fashion much until summer. we remain don't Lids and of more late how improvement driver second a have will year, easier this the a tough for this first We've back rebound. well of the of we into half the The football anticipated yet is see an as much timing we Lids major Since challenging in the we anniversary for in conservative comparisons. of

has about current Schuh's more Bob limited talked visibility into Finally, trajectory. the

we from X%. year basis flat range consolidated which sales XX down the including from versus of comps to on For still consolidated to last up with ranging up direct year, expect year weeks X% this the X%, XX is will

cost recent haven't been these we guidance results will new The reopening update. Puerto capital store fill-in to which which these we these we’ve the since of mostly locations for parts validate currently plan than We strong deal, the are stores Journeys in new get remains earning and right malls half are will previously able to rent about market new hurricane. in opportunities store conditions overall I of locations, similar new built-out been our fill-in openings in stores and same, few our today and situations. Journeys more our concepts About be including stores the in more XX opportunistic The where afford. While moving and Stores. Rico seven underlying last are open including year's Journeys after stores not there new Macy's now Kids assumptions of

these to for XXX square a -- a pursue So we to in over continue will year for these openings selectively. We second close stores the opportunities plan row. footage decrease

However, we with when change. stores deal number transfer significant this may we amount other sales store if term a to attractive, the our we a don't is We will keep lease short open close so the in that if open is store a a any risk deal lease keeping approach. believe eliminate short right good get store, can we rent mall, a to rent we so believe a the of enough is on long-term

saw will Additionally, unproductive from we the year, last more as productive close as prune you selectively stores we open ones our be than stores far we the portfolio.

We XX in expect margin with to most points gross be total basis XX in divisions. up improvement to

our store savings to over largely With and range, expense expect delever a point will I we discuss, will last meaningful the XX low XX with is basis which, store comp in SG&A year. the cost expense the base, fixed improvement

offset. are store in will which In savings also help these addition, labor we investing

or in at last double that below margin results a down few operating percent ranges EPS all tenths level, this and up an year's to digits. from So little

the fiscal tax is in quarterly calendar in shift XXrd this estimated year. of the course modeling rate week 'XX of Our important guidance the the this callout last reform benefit to and refinement result of tax year. at the inclusive as reform a 'XX developed One the fiscal XX.X% of approximately is of in as details for subject

of the help the are to hurt in be into the out shift the and of shift, as is will of with August large headwinds second Even shift beginning money in the of make we of offset impacts at and QX some third QX. quarter the biggest second, quarter volumes this it change the facing While simply weeks difficult the which help quarter. back-to-school the this to one will will quarters, the all

our year still half from years plan last positive amortization range fleet toward $XX refreshing the tenth to capital we for year. and to of we projects, working We capital down So spend will which balance second improvement the this discussed. million in $XX expect while facility. and depreciation about our the upgrades major as new should expenditures this million, investing when We're a help earnings four investing flow digital, cash on and substantially of the been and in turn to in all previous IT, have our store year in XX% we distribution estimate come the $XX million. stores opening inventory We a well. of other at from

XX.X buybacks, of are we but assuming talked can This to about stock finish recognize use up outstanding. capital guidance and will average repurchase forward. going discussing no the by our shares and down channels million costs. Lastly, driving the We operating we critical must spending the efforts assumes we I and that to cost opportunistically combat to initiatives We’ve e-commerce reduce availability dilute reduce in profitability improve two added this. expense that and to traffic stores store efficiency the structure manage

to $XX our million key expense. This program we $XX million in every priority launched profit program is out such, to businesses. enhancement of take a a of As annual one

invested We progress. efforts and have making good significant we're here

on with far an total program, give year of an XX% reductions, rent. we're in part As XXX a to we’ve percent this. this The plus working sales. renewals terms expense a and straight year's XXX line to With both level last an will year over success this as in keep cash basis. in of acceptable rent of about integral To landlords we negotiated last leads decreases or dollars effect rent renewals achieved this so of project partnering go, our with below compounding renewals good having year's achieve and XX% rent more at us to update, reduction and very

us store the targeted includes network from includes an benefit in reductions more opportunities in only Other headcount years of rent allow card This average as digital. counting of renegotiation losses we're stores stores, down effort about year. and into increasingly cost carrier year's structure last store store investment opportunities DCs such the reduction expense, year. shorter-term, a freight little broad the of to our and made we the are flexibility the a and in renewals have start Another savings. closed cost to base areas benefits X.X to and fees, our end continued is overall the a which supplies. program reaching in us multiyear as entire contract, thinking costs, and have of over significant comes for beyond. term reshape which banking at these IT, This credit of additional B it with in important malls already went e-commerce than of When aspect This not gives cost effect allows to start It fixed. is and and variable is and the utilities renewals

Now questions. take to ready we're your

Operator

[Operator question you. come Instructions] will Quintiliano our first SunTrust. Pamela with Thank from And

Pamela Quintiliano

on Great. for the guys, thanks execution Congratulation, detail. all and the

first So just had on one quick one traffic.

if I this, pressured, mall it were specifically, and overall levels, although you above the Journeys below Lids? but was missed or Sorry

Mimi Vaughn

Pam, when below traffic, with the -- mall actually Lids look you Journeys been of negative. was at quarter the the so for first traffic. So, level positive mall traffic is levels levels. Lids challenges, were are above is still actually Journeys, mall the has Journeys facing

Robert Dennis

were less against is overall trend in true outrunning the slipping behind continues at is of And very Pam, moment. and is Lids, then is they the bit interpretation comparisons obviously know and traffic a which be the trend. Journeys at opposite traffic you malls, trend Journeys on so one period But slightly on much the that our to got negative. when there And were we’ve their little that is Lids

Mimi Vaughn

to days, we and that what prior the store digital the in coming we're these that customer all window days even their you seeing determine mall. malls they thing of their is shopping higher are want What coming is with the and into and devices buy seeing the they’re doing prior conversion. to to using these remind is doing trends we the to to of traffic that Well,

we're So nice some in driving actually & their comp. conversion particularly size what has along Johnston been seeing ticket Murphy is the very nice very increases, with which

Operator

to And we will Jefferies. with Stichter now move Janine

Janine Stichter

to current well this just positive Thank business. on concentration category I the see stay of into compare thoughts product on Journeys then, vendor comp cycle either color you you fashion Journeys' be you in dig will want of How level morning. kind playing or us cycle little any spot? seems the bit Hi. Good concentration that to cycles? more long you think evolving. sweet Can to to would And the you. how a prior very just some how it give

Robert Dennis

Yes.

continue concentration, assort terms of in the we all customer -- they the store So give to, to what it's the first of want.

We retro with to the concentration with had an cycle. that last seen fashion in trend beyond the have be trend opportunity in we athletic the athletic fashion and the diversify

pretty moment. So the okay we at feeling are about concentration the

reinforces in are refreshing wildcard. they terms cycle, of this look spot current We fashion trend brands the of a inside a in a we like the what is. feel and In that are customers coming year. good in newness that’s see way the our overall for big We providing that the

good very we’re said if year. been feeling look we pretty There with you we’ve we're social I feel a media have four that rest about now that. history, pretty on good it’s three, at So feel Right and the the had runs year concerns confident these of trend the we trends. like two, shortens as fashion

Operator

from with will Baird. Jonathan And next Komp our question come

Jonathan Komp

out want just other you would to hi. said you. I clarify, a to difficult Mimi, first it headwinds. when some Yes, make on profit, Thank called you QX, be

So specifically? I turned those think on Journeys question, last then the what I -- trends, April. comps sales wanted And to back other to headwinds the around just were just bigger year, picture positive clarify going

against ahead? be sustaining your get what date it accelerating So to tougher I that want thoughts to looks on and here factors and pretty your levels positive to even outlook how with business the compares quarter

Mimi Vaughn

Jon, just a to first to so you of Bob over have little it bit second answer our terms But business. hand the second will in take to I quarter, question. and about your think one will then the

The first leverage in holiday and quarters levels we second until are at into volume are in back-to-school difficult fixed very fourth the get quarters, and therefore and smaller to quarter, it's sales base. and our expense quarter the third low we

manage the got we'll May so to staffing in can base. we’ve we have in and stores, rent we're same December, that our doing in so we all take And expense to down X%

guided comps that be quarter the anticipate in had that we Schuh's will initially in QX. would to negative, while the and referring specifically given comps that comps now that and experience And the still be we their so in Lids' be headwinds, taken negative to was first their didn't expect have the negative I we comps are just we second quarter

we're We as what of describe couple in but headwind. a is Murphy, Johnston & comps negative quarter we and low a what seeing by from businesses encouraged would very volume Journeys both of are in in such the combination those those

Robert Dennis

one. that first just on to add will I

other the years experiencing has on going is business negative that in business, of The our comps our we’ve repeatedly and is for we’re in which been which our dilutive. digital the expansion said stores, thing

ramping stores machines are to particular years operating first those quarters correct, because have want improved many but every are the used to costs So real before over see up, Lids little and second we’re climb a question be. is we to improving Journeys, your We back not the they and given on quarter. flexibility to the happened you start at margin On labor -- operating last first with at quarters is the are the start what very that Christmas. margin for in hit take lower meaningfully -- for at while what quarters, has it we that it our cost in that up comps are regards back-to-school year our two fixed the

strong year comps I probably comps at bringing is every back last the go look you to down And the year's some year, for would from best and weak are expectations this of little strong that. you way at was from X-year much a encourage last for year our before Journeys it, a comp when rebound understand when because to of look The a comp bit projections quarter. so you the though, stack, look at we

And through for a at here, so stack what really back the with X-year look but our history doing won't you I I and comp to to numbers the encourage expectations. go back -- to shape of back go the you all would go go and have we’re feel in to understand get a

Operator

hear now Group. from will Pivotal we Research with Kummetz And Mitch

Mitch Kummetz

Yes. the next Thanks the just or to in of my quarter outlook was and Lids, bit hoping get little quarter the Bob, terms over taking so. color I questions. on more for then a

meaningfully give your can So, of headwear Room than side you any of the first of percentage is sounds comping if out on a sales Locker quarter can you negative less of of versus Cubs actually was quarter? was last. then, doing I or second go about the some on there know And it to if you versus and that it well. less. MLB and impact the say don’t speak color is Lids' it the talk I Can it this of way you like X%, how the positive, quarter? NFL ramps between and Clubhouse? kind MLB, quarter know into as that’s as sort parse Can you business kind

Robert Dennis

a our you in me Room you ask some let we more business. business headwear then headwear ballpark, third and It's a Mimi two-thirds -- give to I about Yes, themes of give and the gotten us. difficult will more The business for specifics. Locker general has little in do

challenged business it's as actually lot just is a business. And nature the searching more of trends, better, as just negative a while. not basis been fashion so has there's than trend of little was. the that on is The sports getting for Room it Locker which a business, been a Underneath stuff, it has it that next we’re in headwear the because licensed

well now, example, a the year. going did World the end our after excitement business are team, we the and Cubs, Cubs terrific one doing International obviously, so season and lot -- business. of Yankees for for which last of the we Series this so have missed Then Yankees the things. good that that’s tail right as in as winning we number the was championship. year-ago year The the new on of the a had some we So, they are,

the doing well, well. are And so, doing when Yankees MLB is

detail, Mimi? For

Mimi Vaughn

Yes.

specifically So, league one to our given that quarter. Lids just getting our as still the off then we're season of second Mitch, quarter, starts your It's becomes number And is different their Locker the with quarter. impact league headwinds one trail described, number Room weren't the first the into be quarter very because stores. we’ve just stores said around baseball season. of the question football start bigger baseball Bob in first the third even in It than the in excited to the and comps in baseball

the Yankees fire. And on in so, business been far been has has so our Clubhouse particular because fire on

and driving business been And Clubhouse a the has been tailwind so Lids really nice overall. the business that’s very that

Operator

with will our And from Macquarie. Laurent Vasilescu next question come

Laurent Vasilescu

Mimi, Good the first for and question. morning thank of the taking for between year. of the the on the my half cadence you, thanks half and color And earnings second

the directional And shift third the quantify EPS from quarter Regarding on shift second color could the you possibly quarter into could in great. would week? of margins be important second the any the for week the go gross for then, quarter, secondly, that where

Robert Dennis

describing, particularly make one the just I in will part. We just don’t guidance I that moving give another example of of because the This parts finished comment. quarterly the just moving is all Lids business.

Mimi. it And hand over me with let so, to said, that

Mimi Vaughn

Yes.

think because in know week. impactful week tricky not businesses. be it's it's and as in that big I I particular tricky that a back-to-school a It might it's such other

last to the should basis of third of year, about quarter million if of that work amounts. care flow-throughs amount on the quarter, and would up shift, able are your take then at dollar right flow-through you can we second that the you be the you shifting end to if So just whatever $XX to look the business the Laurent, from shift

first XX there positive year. the this gross As I like basis some margin points for opportunity feel we up in margin We gross saw quarter. is said,

business stronger of the is We gross margin lift, back-to-school also year do than because with think for with both that in the only have opportunity to back opportunity there holiday. more part we that and

Operator

from Pamela will SunTrust. with we Quintiliano hear And once again

Pamela Quintiliano

guys. up Thanks my taking Hey, for question. follow-up

division Just about any talk business. or quarter? above Can granularity you expectations, below trended one online the your just the and during a if on by that quick

Robert Dennis

In double-digit general, we to continue gain. a deliver

We with expectations. and been in of it's are our sort ballpark pleased that the of

units, Mimi? In terms business of specific

Mimi Vaughn

Yes.

just are online units comps specific these are so with just we a breaking So, up days. business because were store phenomenal up. integrated anymore XX% Pam, -- we really But against comps comps not out

to close quarter. last I year first the think we up XX% in were

and compare bit Journeys last other little from quickly first the more is direct of think business, have because investments side. so Journeys been year. the there's penetrated, of our businesses been making. comp against strong quarter very strongly to have the grow of Journeys, some lower they especially a a I comping of for So lots this opportunity are been some of on

Robert Dennis

time a trickier what’s And to get analyze in us that an the Pam, to terms world little online in for the blurring is of this is over and sale. going sense for discuss to you

you for because pick comes online, but way of store, you you, digital it from chance sale. the a having a that that person give for they have If store the up who to to and buying is both the have in credit existence closed in have

digital much somebody to And that the on but heretofore we some so defined others be increasingly give was, else's think comp, I And which about just sale device. strictly a sale it is the won't talking space and we made helping as be color have will try digital comps. in defined about then retail how what to is

Mimi Vaughn

Journeys business reductions store sales, Yes. be profitability. make profitable, thing because but delighted strong those of we're strength that for for we e-commerce happy good take remind positive Johnston the makes to the direct to store & the Murphy, and cost implemented other our extent you that run businesses a sales customer and comps been the business about we've that to to the and that is for And have formula the e-commerce both so just we the that a wants

Operator

question next with from our And will Jaffray. Murphy Piper Erinn come

Erinn Murphy

And morning. on around bouncing Great, been I I calls. have apologize, thanks. Good

a Footlocker yet? you about trend how but from trend Could on asked, hopefully any are? mentioned headwear visibility been hats to And that these in Lids. be guess of general. wearing a customers just customers seem talk a potential I feel perspective, haven't to from ago back week your sort purchasing, fashions you their So perspective, firstly, A, less then

Robert Dennis

with doing headwear testing dearth comments. space cover category, call, excitement what now, the there's main the that is the right which a did just theme right in Footlocker's we we’re is to hence And when is Erinn, of possibilities the a we're hitting next But on now fashion excitement we're is predicting trend trend. working not closely not explore having things, next and more predictive -- going the different the lot for our of appear. great to very create vendors

Operator

for with or back to And further to call additional questions, I’d no closing remarks. over any like management turn the

Robert Dennis

for quarter. Thank a Have look end you at you everyone conversation joining second the us with of we good and the to forward having a day.

Operator

participation. once our you And conclude call again that your for does Thank today. for

disconnect. You may now

Genesco (GCO) 5 Jun 182019 Q1 Earnings call transcript