NASHVILLE, Tenn., Sept. 3, 2020 /PRNewswire/ --
Second Quarter Fiscal 2021 Financial Summary
- Net sales decreased 20% from last year to $391 million with stores open about 70% of
days
- Robust 144% e-commerce growth
- Generated $74 million of
operating cash flow
Genesco Inc. (NYSE: GCO) today reported a GAAP loss from
continuing operations per diluted share of ($1.33) for the three months ended August 1, 2020, compared to earnings from
continuing operations per diluted share of $0.05 in the second quarter last year.
Adjusted for the excluded items in both periods, the Company
reported a second quarter loss from continuing operations per
diluted share of ($1.23), compared to
earnings from continuing operations per diluted share of
$0.15 last year.
Mimi E. Vaughn, Genesco Board
Chair, President and Chief Executive Officer, said, "The second
quarter began with consumers enthusiastically returning to our
physical locations as we began reopening stores and continuing to
actively engage and shop with us online. The speed and executional
excellence our teams demonstrated in getting our stores open and
operational was a huge advantage as we often opened on the first
day permitted by local authorities. Despite our stores being
open for about 70% of the days in the second quarter, total net
revenue decreased only 20% as the drop in store volume was
partially offset by a notable 144% increase in e-commerce sales as
we pivoted to digital. Equally encouraging was our ability to
reduce expenses and inventories in line with sales and to generate
cash during the quarter. Journeys generated a positive
operating income for the quarter, but gross margin headwinds
especially at Johnston & Murphy and Schuh led to a consolidated
operating loss.
"Towards the end of the second quarter and to begin the third
quarter, our business in North
America was significantly impacted by the changes in
back-to-school timing brought on by the pandemic. This includes
schools in several areas of the country starting later than last
year and many others not returning to in-person learning. As such
we believe the back-to-school selling season will extend deeper
into the third quarter which has limited visibility as we head into
the back half. I am incredibly proud of how our teams have
responded to the unprecedented challenges we've faced thus far in
Fiscal 2021. This, along with the strong strategic
positioning of our businesses and current liquidity, gives me
confidence that we will successfully weather this storm and emerge
strong to take advantage of the many opportunities on the other
side."
Store Re-Opening Update
Currently, the Company is
operating in 96% of its locations, including approximately 1,130
Journeys, 160 Johnston & Murphy, and 125 Schuh
locations.
All store locations are operating under enhanced measures to
ensure the health and safety of employees and customers.
Genesco will continue its phased approach to reopen stores
when:
- state and local governments have allowed stores to
operate,
- the Company believes it can operate safely under its enhanced
health and safety measures, and
- the Company believes that it can ensure the safety of its
employees and customers.
Second Quarter Review
Net sales for the second quarter
of Fiscal 2021 decreased 20% to $391
million from $487 million in
the second quarter of Fiscal 2020. This sales decrease was
driven by store closures, a later start to back-to-school, lower
store comps and lower wholesale sales, partially offset by digital
comp growth of 144%. As a result of the store closures and
gradual reopening of stores in response to COVID-19, the Company
has not included second quarter Fiscal 2021 comparable sales,
except for comparable direct sales, as it believes that overall
sales is a more meaningful metric during this period.
Comparable
Sales
|
|
|
|
Comparable Same
Store and Direct Sales:
|
2QFY21
|
2QFY20
|
Journeys
Group
|
NA
|
4%
|
Schuh
Group
|
NA
|
0%
|
Johnston & Murphy
Group
|
NA
|
1%
|
Total Genesco
Comparable Sales
|
NA
|
3%
|
Same Store
Sales
|
NA
|
1%
|
Comparable Direct
Sales
|
144%
|
20%
|
Overall sales were down 12% for Journeys, 22% at Schuh, and 64%
at J&M while sales were up 62% at Licensed Brands due to the
Togast acquisition.
Second quarter gross margin this year was 42.7%, down 590 basis
points, compared with 48.6% last year. The decrease as a percentage
of sales is due primarily to higher shipping and warehouse expense
in all divisions driven by the increase in penetration of
e-commerce, significant inventory reserves taken at Johnston &
Murphy, and increased promotional activity at Schuh.
Adjusted selling and administrative expense for the second
quarter this year increased 40 basis points as a percentage of net
sales due to lower sales as a result of COVID-19. On a dollar
basis, expenses decreased 19% compared to the same period last year
driven by disciplined expense management, including: reduced
selling salaries, occupancy, and compensation expense along with
lower travel, advertising and bonus expenses.
Genesco's GAAP operating loss for the second quarter was
$(22.0) million, or (5.6)% of sales
this year compared with operating income of $3.0 million, or 0.6% of sales last year.
Adjusted for the excluded items in both periods, the operating loss
for the second quarter was $(20.9)
million this year compared with operating income of
$4.7 million last year.
Adjusted operating margin was (5.3)% of sales in the second quarter
of Fiscal 2021 and 1.0% last year.
The effective tax rate for the quarter was 20.3% in Fiscal 2021
compared to 70.7% last year. The adjusted tax rate,
reflecting excluded items, was 23.0% in Fiscal 2021 compared to
45.2% last year. The lower adjusted tax rate for this year
primarily reflects the inability to recognize a tax benefit for
certain foreign losses.
The GAAP loss from continuing operations was $(18.9) million in the second quarter of Fiscal
2021, compared to earnings from continuing operations of
$0.8 million in the second quarter
last year. Adjusted for the excluded items in both periods,
the second quarter loss from continuing operations was $(17.4) million, or ($1.23) loss per share in Fiscal 2021, compared
to earnings from continuing operations of $2.5 million, or $0.15 earnings per share last
year.
Cash, Borrowings and Inventory
Cash and cash
equivalents at August 1, 2020, were
$299.1 million, compared with
$58.0 million at August 3, 2019. Cash increased $60.6 million during the second quarter driven
primarily by operating activities generating $74.4 million, partially offset by a use of cash
in financing activities of $12.0
million, capital expenditures and other activities.
Total debt at the end of the second quarter of Fiscal 2021
was $210.9 million compared with
$75.1 million at the end of last
year's second quarter. Total unused availability as of August 1, 2020 was $63.4
million. Inventories decreased 18% in the second
quarter of Fiscal 2021 on a year-over-year basis.
Capital Expenditures and Store Activity
For the second
quarter, capital expenditures were $4
million, primarily related to digital and omni-channel
initiatives and store projects already in progress.
Depreciation and amortization was $12
million. During the quarter, the Company opened three
new stores and closed six stores. The Company ended the
quarter with 1,476 stores compared with 1,494 stores at the end of
the second quarter last year, or a decrease of 1%. Square
footage was down 1% on a year-over-year basis.
Share Repurchases
The Company did not repurchase any
shares during the second quarter of Fiscal 2021.
Fiscal 2021 Outlook
Due to the continued uncertainty
in the overall economy driven by COVID-19, the Company is not
providing guidance at this time.
Conference Call, Management Commentary and Investor
Presentation
The Company has posted detailed financial
commentary and a supplemental financial presentation of second
quarter results on its website, www.genesco.com, in the investor
relations section. The Company's live conference call on
September 3, 2020, at 7:30 a.m. (Central time), may be accessed
through the Company's 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.
Safe Harbor Statement
This release contains
forward-looking statements, including those regarding the
performance outlook for the Company and its individual businesses
(including, without limitation, those regarding back-to-school and
holiday selling seasons and its ability to keep stores open,
operate the stores safely and ensure the safety of customers and
employees) 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. These include
adjustments to estimates and projections reflected in
forward-looking statements, including as a result of the effects of
COVID-19 on the Company's business including whether there are
periods of increases in the number of COVID-19 cases in
locations in which the Company operates, further closures of stores
due to COVID-19, weakness in store and shopping mall traffic,
restrictions on operations imposed by government entities and
landlords, changes in public safety and health requirements, the
Company's ability to adequately staff stores, limitations on the
Company's ability to provide adequate personal protective equipment
to employees, and the Company's ability to maintain social
distancing requirements; stores closures and effects on the
business as a result of civil disturbances; the level and timing of
promotional activity necessary to maintain inventories at
appropriate levels; the imposition of tariffs on products imported
by the Company or its vendors as well as the ability and costs to
move production of products in response to tariffs; the Company's
ability to obtain from suppliers products that are in-demand on a
timely basis and effectively manage disruptions in product supply
or distribution, including disruptions as a result of COVID-19;
unfavorable trends in fuel costs, foreign exchange rates, foreign
labor and material costs, and other factors affecting the cost of
products; the effects of the British decision to exit the European
Union and other sources of weakness in the U.K. market; the
effectiveness of the Company's omnichannel initiatives; costs
associated with changes in minimum wage and overtime requirements;
wage pressure in the U.S. and the U.K.; weakness in the consumer
economy and retail industry; competition and fashion trends in the
Company's markets; risks related to the potential for terrorist
events; risks related to public health and safety events, including
for example, the COVID-19 coronavirus; changes in buying patterns
by significant wholesale customers; retained liabilities
associated with divestitures of businesses including potential
liabilities under leases as the prior tenant or as a guarantor of
certain leases; and changes in the timing of holidays or in the
onset of seasonal weather affecting period-to-period sales
comparisons. Additional factors that could cause differences from
expectations include the ability to renew leases in existing stores
and control or lower occupancy costs, and to conduct required
remodeling or refurbishment on schedule and at expected expense
levels; the Company's ability to eliminate stranded costs
associated with dispositions, including the sale of the Lids Sport
Group business; the Company's ability to realize anticipated cost
savings, including rent savings; deterioration in the performance
of individual businesses or of the Company's market value relative
to its book value, resulting in impairments of fixed assets,
operating lease right of use assets or intangible assets or other
adverse financial consequences and the timing and amount of such
impairments or other consequences; unexpected changes to the market
for the Company's shares or for the retail sector in general; costs
and reputational harm as a result of disruptions in the Company's
business or information technology systems either by security
breaches and incidents or by potential problems associated with the
implementation of new or upgraded systems; and the cost and outcome
of litigation, investigations and environmental matters involving
the Company. Additional factors are cited in the "Risk Factors,"
"Legal Proceedings" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" sections of, and
elsewhere in, the Company's SEC filings, copies of which may be
obtained from the SEC website, www.sec.gov, or by contacting the
investor relations department of Genesco via the Company's website,
www.genesco.com. Many of the factors that will determine the
outcome of the subject matter of this release are beyond Genesco's
ability to control or predict. Genesco undertakes no obligation to
release publicly the results of any revisions to these
forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events. Forward-looking statements reflect the
expectations of the Company at the time they are made. The Company
disclaims any obligation to update such statements.
About Genesco Inc.
Genesco Inc., a Nashville-based specialty retailer, sells
footwear and accessories in more than 1,475 retail stores
throughout the U.S., Canada, the
United Kingdom and the
Republic of Ireland, principally
under the names Journeys, Journeys Kidz, Schuh, Schuh Kids, Little
Burgundy, Johnston & Murphy, and on internet websites
www.journeys.com, www.journeyskidz.com, www.journeys.ca,
www.littleburgundyshoes.com, www.schuh.co.uk,
www.johnstonmurphy.com, www.johnstonmurphy.ca, and
www.dockersshoes.com. In addition, Genesco sells wholesale
footwear under its Johnston & Murphy brand, the licensed
Dockers brand, the licensed Levi's brand, the licensed Bass brand,
and other brands. For more information on Genesco and its operating
divisions, please visit www.genesco.com.
______________________
1 Excludes retail store asset impairment charges and
a change in vacation policy, net of tax effect in the second
quarter of Fiscal 2021 ("Excluded Items"). A reconciliation
of earnings/loss and earnings/loss per share from continuing
operations in accordance with U.S. Generally Accepted Accounting
Principles ("GAAP") with the adjusted earnings/loss and
earnings/loss per share numbers is set forth on Schedule B to this
press release. The Company believes that disclosure of
earnings and earnings per share from continuing operations adjusted
for the items not reflected in the previously announced
expectations will be meaningful to investors, especially in light
of the impact of such items on the results.
|
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|
GENESCO
INC.
|
|
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
Quarter 2
|
|
|
|
|
|
|
|
Aug.
1,
|
%
of
|
|
Aug. 3,
|
% of
|
|
|
|
|
|
|
|
2020
|
Net
Sales
|
|
2019
|
Net Sales
|
|
|
|
|
Net sales
|
|
|
$
391,217
|
100.0%
|
|
$ 486,573
|
100.0%
|
|
|
|
|
Cost of
sales
|
|
224,217
|
57.3%
|
|
250,040
|
51.4%
|
|
|
|
|
Gross
margin
|
|
167,000
|
42.7%
|
|
236,533
|
48.6%
|
|
|
|
|
Selling and
administrative expenses
|
187,261
|
47.9%
|
|
231,796
|
47.6%
|
|
|
|
|
Asset impairments and
other, net
|
1,733
|
0.4%
|
|
1,775
|
0.4%
|
|
|
|
|
Operating income (loss)
|
(21,994)
|
-5.6%
|
|
2,962
|
0.6%
|
|
|
|
|
Other components of
net periodic benefit cost
|
(182)
|
0.0%
|
|
(93)
|
0.0%
|
|
|
|
|
Interest expense,
net
|
|
1,918
|
0.5%
|
|
347
|
0.1%
|
|
|
|
|
Earnings (loss) from continuing operations
before
|
|
|
|
|
|
|
|
|
|
income
taxes
|
|
(23,730)
|
-6.1%
|
|
2,708
|
0.6%
|
|
|
|
|
Income tax expense
(benefit)
|
(4,806)
|
-1.2%
|
|
1,915
|
0.4%
|
|
|
|
|
Earnings (loss) from continuing operations
|
(18,924)
|
-4.8%
|
|
793
|
0.2%
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(112)
|
0.0%
|
|
(216)
|
0.0%
|
|
|
|
|
Net
Earnings (Loss)
|
|
$
(19,036)
|
-4.9%
|
|
$
577
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
Before discontinued operations
|
$
(1.33)
|
|
|
$
0.05
|
|
|
|
|
|
Net earnings (loss)
|
|
$
(1.34)
|
|
|
$
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
Before discontinued operations
|
$
(1.33)
|
|
|
$
0.05
|
|
|
|
|
|
Net earnings (loss)
|
|
$
(1.34)
|
|
|
$
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,179
|
|
|
15,959
|
|
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|
Diluted
|
|
|
14,179
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|
|
16,028
|
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|
GENESCO
INC.
|
|
|
|
Condensed
Consolidated Statements of Operations
|
|
|
|
(in thousands,
except per share data)
|
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|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
Aug.
1,
|
%
of
|
|
Aug. 3,
|
% of
|
|
|
|
|
|
|
|
2020
|
Net
Sales
|
|
2019
|
Net Sales
|
|
|
|
|
Net sales
|
|
|
$
670,449
|
100.0%
|
|
$
982,224
|
100.0%
|
|
|
|
|
Cost of
sales
|
|
383,305
|
57.2%
|
|
500,783
|
51.0%
|
|
|
|
|
Gross
margin
|
|
287,144
|
42.8%
|
|
481,441
|
49.0%
|
|
|
|
|
Selling and
administrative expenses
|
376,303
|
56.1%
|
|
468,351
|
47.7%
|
|
|
|
|
Goodwill
impairment
|
|
79,259
|
11.8%
|
|
-
|
0.0%
|
|
|
|
|
Asset impairments and
other, net
|
9,594
|
1.4%
|
|
1,044
|
0.1%
|
|
|
|
|
Operating income (loss)
|
(178,012)
|
-26.6%
|
|
12,046
|
1.2%
|
|
|
|
|
Other components of
net periodic benefit cost
|
(306)
|
0.0%
|
|
(179)
|
0.0%
|
|
|
|
|
Interest expense,
net
|
|
2,774
|
0.4%
|
|
181
|
0.0%
|
|
|
|
|
Earnings (loss) from continuing operations
before
|
|
|
|
|
|
|
|
|
|
income
taxes
|
|
(180,480)
|
-26.9%
|
|
12,044
|
1.2%
|
|
|
|
|
Income tax expense
(benefit)
|
(26,932)
|
-4.0%
|
|
4,781
|
0.5%
|
|
|
|
|
Earnings (loss) from continuing operations
|
(153,548)
|
-22.9%
|
|
7,263
|
0.7%
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(265)
|
0.0%
|
|
(340)
|
0.0%
|
|
|
|
|
Net
Earnings (Loss)
|
|
$
(153,813)
|
-22.9%
|
|
$
6,923
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
|
Before discontinued operations
|
$
(10.86)
|
|
|
$
0.43
|
|
|
|
|
|
Net earnings (loss)
|
|
$
(10.87)
|
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share:
|
|
|
|
|
|
|
|
|
|
Before discontinued operations
|
$
(10.86)
|
|
|
$
0.43
|
|
|
|
|
|
Net earnings (loss)
|
|
$
(10.87)
|
|
|
$
0.41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,145
|
|
|
16,802
|
|
|
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|
Diluted
|
|
|
14,145
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|
16,939
|
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|
GENESCO
INC.
|
|
|
|
Sales/Earnings
Summary by Segment
|
|
|
|
(in
thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
Quarter 2
|
|
|
|
|
|
|
|
Aug.
1,
|
%
of
|
|
Aug. 3,
|
% of
|
|
|
|
|
|
|
|
2020
|
Net
Sales
|
|
2019
|
Net Sales
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
Journeys Group
|
|
$
276,631
|
70.7%
|
|
$ 315,175
|
64.8%
|
|
|
|
|
Schuh Group
|
|
71,732
|
18.3%
|
|
92,476
|
19.0%
|
|
|
|
|
Johnston & Murphy Group
|
24,097
|
6.2%
|
|
67,267
|
13.8%
|
|
|
|
|
Licensed Brands
|
|
18,757
|
4.8%
|
|
11,583
|
2.4%
|
|
|
|
|
Corporate and Other
|
|
-
|
0.0%
|
|
72
|
0.0%
|
|
|
|
|
Net Sales
|
|
|
$
391,217
|
100.0%
|
|
$ 486,573
|
100.0%
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
|
Journeys Group
|
|
$
10,160
|
3.7%
|
|
$
11,329
|
3.6%
|
|
|
|
|
Schuh Group
|
|
(6,838)
|
-9.5%
|
|
39
|
0.0%
|
|
|
|
|
Johnston & Murphy Group
|
(18,243)
|
-75.7%
|
|
1,518
|
2.3%
|
|
|
|
|
Licensed Brands
|
|
(1,222)
|
-6.5%
|
|
(251)
|
-2.2%
|
|
|
|
|
Corporate and Other(1)
|
|
(5,851)
|
-1.5%
|
|
(9,673)
|
-2.0%
|
|
|
|
|
Operating income
(loss)
|
(21,994)
|
-5.6%
|
|
2,962
|
0.6%
|
|
|
|
|
Other components of
net periodic benefit cost
|
(182)
|
0.0%
|
|
(93)
|
0.0%
|
|
|
|
|
Interest,
net
|
|
|
1,918
|
0.5%
|
|
347
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
from continuing operations
before
|
|
|
|
|
|
|
|
|
income taxes
|
|
(23,730)
|
-6.1%
|
|
2,708
|
0.6%
|
|
|
|
|
Income tax expense
(benefit)
|
(4,806)
|
-1.2%
|
|
1,915
|
0.4%
|
|
|
|
|
Earnings (loss) from
continuing operations
|
(18,924)
|
-4.8%
|
|
793
|
0.2%
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(112)
|
0.0%
|
|
(216)
|
0.0%
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(19,036)
|
-4.9%
|
|
$
577
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Includes a $1.7 million charge in the
second quarter of Fiscal 2021 for retail store asset
impairments. Includes a $1.7 million charge in
|
|
|
|
the
second quarter of Fiscal 2020 which includes $1.0 million for lease
terminations and $0.7 million for retail store asset
impairments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
|
Sales/Earnings
Summary by Segment
|
|
|
|
(in
thousands)
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
Aug.
1,
|
%
of
|
|
Aug. 3,
|
% of
|
|
|
|
|
|
|
|
2020
|
Net
Sales
|
|
2019
|
Net Sales
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
Journeys Group
|
|
$
445,556
|
66.5%
|
|
$
639,147
|
65.1%
|
|
|
|
|
Schuh Group
|
|
118,897
|
17.7%
|
|
169,320
|
17.2%
|
|
|
|
|
Johnston & Murphy Group
|
62,946
|
9.4%
|
|
142,001
|
14.5%
|
|
|
|
|
Licensed Brands
|
|
43,050
|
6.4%
|
|
31,666
|
3.2%
|
|
|
|
|
Corporate and Other
|
|
-
|
0.0%
|
|
90
|
0.0%
|
|
|
|
|
Net Sales
|
|
|
$
670,449
|
100.0%
|
|
$
982,224
|
100.0%
|
|
|
|
|
Operating Income
(Loss):
|
|
|
|
|
|
|
|
|
|
|
Journeys Group
|
|
$
(26,923)
|
-6.0%
|
|
$
30,305
|
4.7%
|
|
|
|
|
Schuh Group
|
|
(21,924)
|
-18.4%
|
|
(5,389)
|
-3.2%
|
|
|
|
|
Johnston & Murphy Group
|
(27,827)
|
-44.2%
|
|
6,624
|
4.7%
|
|
|
|
|
Licensed Brands
|
|
(3,723)
|
-8.6%
|
|
178
|
0.6%
|
|
|
|
|
Corporate and Other(1)
|
|
(18,356)
|
-2.7%
|
|
(19,672)
|
-2.0%
|
|
|
|
|
Goodwill Impairment
|
|
(79,259)
|
-11.8%
|
|
-
|
0.0%
|
|
|
|
|
Operating income
(loss)
|
(178,012)
|
-26.6%
|
|
12,046
|
1.2%
|
|
|
|
|
Other components of
net periodic benefit cost
|
(306)
|
0.0%
|
|
(179)
|
0.0%
|
|
|
|
|
Interest,
net
|
|
|
2,774
|
0.4%
|
|
181
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
from continuing operations
before
|
|
|
|
|
|
|
|
|
income taxes
|
|
(180,480)
|
-26.9%
|
|
12,044
|
1.2%
|
|
|
|
|
Income tax expense
(benefit)
|
(26,932)
|
-4.0%
|
|
4,781
|
0.5%
|
|
|
|
|
Earnings (loss) from
continuing operations
|
(153,548)
|
-22.9%
|
|
7,263
|
0.7%
|
|
|
|
|
Loss from
discontinued operations, net of tax
|
(265)
|
0.0%
|
|
(340)
|
0.0%
|
|
|
|
|
Net Earnings
(Loss)
|
|
$
(153,813)
|
-22.9%
|
|
$
6,923
|
0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Includes a $9.6 million charge in the
first six months of Fiscal 2021 which includes a $5.3 million
charge for trademark impairment and a $4.7
|
|
|
|
|
million
charge for retail store asset impairments, partially offset by a
$(0.4) million gain for the release of an earnout related to the
Togast
|
|
|
|
|
acquisition. Includes a $1.0 million charge in the first six months
of Fiscal 2020 for retail store asset impairments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
|
|
|
|
(in
thousands)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aug. 1,
2020
|
|
Aug. 3,
2019
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
299,144
|
|
$
57,965
|
|
|
|
|
Accounts
receivable
|
|
|
54,793
|
|
26,626
|
|
|
|
|
Inventories
|
|
|
365,267
|
|
444,706
|
|
|
|
|
Other current
assets
|
|
|
58,454
|
|
45,040
|
|
|
|
|
Total
current assets
|
|
|
777,658
|
|
574,337
|
|
|
|
|
Property and
equipment
|
|
|
220,458
|
|
261,924
|
|
|
|
|
Operating lease right
of use assets
|
|
670,323
|
|
754,537
|
|
|
|
|
Goodwill and other
intangibles
|
|
|
67,939
|
|
116,685
|
|
|
|
|
Other non-current
assets
|
|
|
33,650
|
|
48,044
|
|
|
|
|
Total
Assets
|
|
|
$
1,770,028
|
|
$
1,755,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
$
178,541
|
|
$
157,822
|
|
|
|
|
Current portion
long-term debt
|
|
|
24,860
|
|
14,896
|
|
|
|
|
Current portion
operating lease liabilities
|
|
199,392
|
|
141,233
|
|
|
|
|
Other current
liabilities
|
|
|
88,047
|
|
87,511
|
|
|
|
|
Total
current liabilities
|
|
|
490,840
|
|
401,462
|
|
|
|
|
Long-term
debt
|
|
|
186,049
|
|
60,244
|
|
|
|
|
Long-term operating
lease liabilities
|
|
593,723
|
|
671,047
|
|
|
|
|
Other long-term
liabilities
|
|
|
38,552
|
|
38,153
|
|
|
|
|
Equity
|
|
|
460,864
|
|
584,621
|
|
|
|
|
Total
Liabilities and Equity
|
|
|
$
1,770,028
|
|
$
1,755,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
Store Count
Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
Balance
|
|
|
|
|
Balance
|
|
|
|
02/02/19
|
Open
|
Close
|
|
02/01/20
|
|
Open
|
Close
|
|
08/01/20
|
|
|
Journeys
Group
|
1,193
|
8
|
30
|
|
1,171
|
|
3
|
5
|
|
1,169
|
|
|
Schuh
Group
|
136
|
1
|
8
|
|
129
|
|
1
|
3
|
|
127
|
|
|
Johnston & Murphy
Group
|
183
|
3
|
6
|
|
180
|
|
2
|
2
|
|
180
|
|
|
Total Retail
Units
|
1,512
|
12
|
44
|
|
1,480
|
|
6
|
10
|
|
1,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
Store Count
Activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
|
|
|
|
Balance
|
|
|
|
|
05/02/20
|
Open
|
Close
|
|
08/01/20
|
|
|
|
Journeys
Group
|
1,171
|
2
|
4
|
|
1,169
|
|
|
|
Schuh
Group
|
127
|
1
|
1
|
|
127
|
|
|
|
Johnston & Murphy
Group
|
181
|
0
|
1
|
|
180
|
|
|
|
Total Retail
Units
|
1,479
|
3
|
6
|
|
1,476
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
Comparable
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
|
Six
Months
|
|
|
|
|
|
Aug.
1,
|
|
Aug. 3,
|
|
|
Aug.
1,
|
|
Aug. 3,
|
|
|
|
|
|
2020(1)
|
|
2019
|
|
|
2020(1)
|
|
2019
|
|
|
Journeys
Group
|
|
|
NA
|
|
4%
|
|
|
NA
|
|
5%
|
|
|
Schuh
Group
|
|
|
NA
|
|
0%
|
|
|
NA
|
|
1%
|
|
|
Johnston & Murphy
Group
|
|
|
NA
|
|
1%
|
|
|
NA
|
|
0%
|
|
|
Total
Comparable Sales
|
|
|
NA
|
|
3%
|
|
|
NA
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same Store
Sales
|
|
|
NA
|
|
1%
|
|
|
NA
|
|
3%
|
|
|
Comparable Direct
Sales
|
|
|
144%
|
|
20%
|
|
|
105%
|
|
17%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) As a
result of store closures in response to the COVID-19 pandemic, the
Company has not included second quarter or
|
|
|
|
year to
date Fiscal 2021 comparable sales, except for comparable direct
sales, as it believes that overall net sales is a
|
|
|
|
more
meaningful metric during this period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GENESCO
INC.
|
|
|
|
|
COVID-19 Related
Adjustments
|
|
|
|
|
(in
thousands)
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
Six
Months
|
|
|
|
|
|
|
|
Aug. 1,
2020
|
|
Aug. 1,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
impairment
|
|
|
$
-
|
|
$
79,259
|
|
|
|
|
Incremental retail
store asset impairment(1)
|
|
1,002
|
|
3,736
|
|
|
|
|
Trademark
impairment(1)
|
|
|
-
|
|
5,260
|
|
|
|
|
Release of Togast
earnout(1)
|
|
|
-
|
|
(441)
|
|
|
|
|
Excess
inventory(2)
|
|
|
2,469
|
|
4,277
|
|
|
|
|
Non-productive
compensation(3) and (4)
|
|
1,443
|
|
4,688
|
|
|
|
|
UK property tax
relief(3)
|
|
|
(3,934)
|
|
(5,489)
|
|
|
|
|
Incremental bad debt
reserve(3)
|
|
|
643
|
|
3,065
|
|
|
|
|
Other(3) and
(5)
|
|
|
1,092
|
|
894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total COVID-19
related adjustments
|
|
$
2,715
|
|
$
95,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)Included in asset impairments and
other, net on the Condensed Consolidated Statements of
|
|
|
|
|
Operations.
|
|
|
|
|
|
|
|
|
|
(2)Included in cost of sales on the
Condensed Consolidated Statements of Operations.
|
|
|
|
|
(3)Included in selling and administrative
expenses on the Condensed Consolidated Statements of
|
|
|
|
|
Operations.
|
|
|
|
|
|
|
|
|
|
(4)Certain
compensation paid to furloughed workers and commission based
associates, net of the
|
|
|
|
|
CARES Act, UK and Canadian
government relief.
|
|
|
|
|
|
|
|
|
(5)Includes primarily severance and
increased cleaning and personal protective equipment expenses
in
|
|
|
|
the
second quarter and first six months of Fiscal 2021 and is partially
offset by the reversal of
|
|
|
|
|
percentage rent for the first six months of Fiscal 2021.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genesco
Inc.
|
|
|
Adjustments to
Reported Earnings (Loss) from Continuing Operations
|
|
|
Three Months Ended
August 1, 2020 and August 3, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes
that disclosure of earnings (loss) and earnings (loss) per share
from continuing operations and operating income (loss) adjusted for
the items
|
|
|
not reflected in the
previously announced expectations will be meaningful to investors,
especially in light of the impact of such items on the
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter
2
|
|
|
|
|
|
August 1,
2020
|
|
August 3,
2019
|
|
|
|
|
|
|
Net
of
|
Per
Share
|
|
|
Net
of
|
Per
Share
|
|
|
|
In Thousands (except
per share amounts)
|
|
Pretax
|
Tax
|
Amounts
|
|
Pretax
|
Tax
|
Amounts
|
|
|
|
Earnings (loss) from
continuing operations, as reported
|
|
|
$
(18,924)
|
($1.33)
|
|
|
$
793
|
$0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments and
other adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Retail store
asset impairment charges
|
|
$
1,733
|
1,313
|
0.09
|
|
$
731
|
451
|
0.03
|
|
|
|
Loss on lease
terminations
|
|
-
|
-
|
0.00
|
|
1,044
|
717
|
0.04
|
|
|
|
Change in
vacation policy
|
|
(616)
|
(463)
|
(0.03)
|
|
-
|
-
|
0.00
|
|
|
|
Gain on
Hurricane Maria
|
|
-
|
-
|
0.00
|
|
-
|
2
|
0.00
|
|
|
|
Total asset
impairments and other adjustments
|
|
$
1,117
|
850
|
0.06
|
|
$
1,775
|
1,170
|
0.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact
share based awards
|
|
|
1,129
|
0.08
|
|
|
(54)
|
0.00
|
|
|
|
Other tax
items
|
|
|
(471)
|
(0.04)
|
|
|
547
|
0.03
|
|
|
|
Total income
tax expense adjustments
|
|
|
658
|
0.04
|
|
|
493
|
0.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) from continuing
operations(1)and(2)
|
|
$
(17,416)
|
($1.23)
|
|
|
$
2,456
|
$0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)The
adjusted tax rate for the second quarter of Fiscal 2021 and 2020 is
23.0% and 45.2%, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)EPS
reflects 14.2 million and 16.0 million share count for the second
quarter of Fiscal 2021 and 2020, respectively, which excludes
common stock equivalents
|
|
in
the second quarter of Fiscal 2021 due to the loss from continuing
operations and includes common stock equivalents in the second
quarter of Fiscal 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genesco
Inc.
|
|
|
Adjustments to
Reported Operating Income (Loss)
|
|
|
Three Months Ended
August 1, 2020 and August 3, 2019
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 2 -
August 1, 2020
|
|
|
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
|
|
In
Thousands
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
|
|
Journeys
Group
|
|
$
10,160
|
$
(263)
|
$
9,897
|
|
|
Schuh
Group
|
|
(6,838)
|
-
|
(6,838)
|
|
|
Johnston & Murphy
Group
|
|
(18,243)
|
(96)
|
(18,339)
|
|
|
Licensed
Brands
|
|
(1,222)
|
(39)
|
(1,261)
|
|
|
Corporate and
Other
|
|
(5,851)
|
1,515
|
(4,336)
|
|
|
Total Operating
Loss
|
|
$
(21,994)
|
$
1,117
|
$
(20,877)
|
|
|
% of
sales
|
|
-5.6%
|
|
-5.3%
|
|
|
|
|
|
|
|
|
|
|
|
Quarter 2 -
August 3, 2019
|
|
|
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
|
|
In
Thousands
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
|
|
Journeys
Group
|
|
$
11,329
|
$
-
|
$
11,329
|
|
|
Schuh
Group
|
|
39
|
-
|
39
|
|
|
Johnston & Murphy
Group
|
|
1,518
|
-
|
1,518
|
|
|
Licensed
Brands
|
|
(251)
|
-
|
(251)
|
|
|
Corporate and
Other
|
|
(9,673)
|
1,775
|
(7,898)
|
|
|
Total Operating
Income
|
|
$
2,962
|
$
1,775
|
$
4,737
|
|
|
% of
sales
|
|
0.6%
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schedule B
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genesco
Inc.
|
|
|
Adjustments to
Reported Earnings (Loss) from Continuing Operations
|
|
|
Six Months Ended
August 1, 2020 and August 3, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company believes
that disclosure of earnings (loss) and earnings (loss) per share
from continuing operations and operating income (loss) adjusted for
the items
|
|
|
not reflected in the
previously announced expectations will be meaningful to investors,
especially in light of the impact of such items on the
results.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six
Months
|
|
|
|
|
|
August 1,
2020
|
|
August 3,
2019
|
|
|
|
|
|
|
Net
of
|
Per
Share
|
|
|
Net
of
|
Per
Share
|
|
|
|
In Thousands (except
per share amounts)
|
|
Pretax
|
Tax
|
Amounts
|
|
Pretax
|
Tax
|
Amounts
|
|
|
|
Earnings (loss) from
continuing operations, as reported
|
|
|
$
(153,548)
|
($10.86)
|
|
|
$
7,263
|
$0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairments and
other adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Retail store
asset impairment charges
|
|
$
4,775
|
3,541
|
0.25
|
|
$
1,038
|
663
|
0.04
|
|
|
|
Trademark
impairment
|
|
5,260
|
5,153
|
0.36
|
|
-
|
-
|
0.00
|
|
|
|
Goodwill
impairment
|
|
79,259
|
79,259
|
5.60
|
|
-
|
-
|
0.00
|
|
|
|
Loss on lease
terminations
|
|
-
|
-
|
0.00
|
|
44
|
28
|
0.00
|
|
|
|
Release Togast
earnout
|
|
(441)
|
(323)
|
(0.02)
|
|
-
|
-
|
0.00
|
|
|
|
Change in
vacation policy
|
|
(1,232)
|
(914)
|
(0.06)
|
|
-
|
-
|
0.00
|
|
|
|
Gain on
Hurricane Maria
|
|
-
|
-
|
0.00
|
|
(38)
|
(24)
|
0.00
|
|
|
|
Total asset
impairments and other adjustments
|
|
$
87,621
|
86,716
|
6.13
|
|
$
1,044
|
667
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Tax impact
share based awards
|
|
|
1,129
|
0.08
|
|
|
(54)
|
0.00
|
|
|
|
Other tax
items
|
|
|
(3,161)
|
(0.22)
|
|
|
489
|
0.02
|
|
|
|
Total income
tax expense adjustments
|
|
|
(2,032)
|
(0.14)
|
|
|
435
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) from continuing
operations(1)and(2)
|
|
$
(68,864)
|
($4.87)
|
|
|
$
8,365
|
$0.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)The
adjusted tax rate for the first six months of Fiscal 2021 and 2020
is 25.8% and 36.1%, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)EPS
reflects 14.1 million and 16.9 million share count for the first
six months of Fiscal 2021 and 2020, respectively, which excludes
common stock equivalents
|
|
in
the first six months of Fiscal 2021 due to the loss from continuing
operations and includes common stock equivalents in the first six
months of Fiscal 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Genesco
Inc.
|
|
|
|
Adjustments to
Reported Operating Income (Loss)
|
|
|
|
Six Months Ended
August 1, 2020 and August 3, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months -
August 1, 2020
|
|
|
|
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
|
|
|
In
Thousands
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
|
|
|
Journeys
Group
|
|
$
(26,923)
|
$
(526)
|
$
(27,449)
|
|
|
|
Schuh
Group
|
|
(21,924)
|
-
|
(21,924)
|
|
|
|
Johnston & Murphy
Group
|
|
(27,827)
|
(192)
|
(28,019)
|
|
|
|
Licensed
Brands
|
|
(3,723)
|
(78)
|
(3,801)
|
|
|
|
Corporate and
Other
|
|
(97,615)
|
88,417
|
(9,198)
|
|
|
|
Total Operating
Loss
|
|
$
(178,012)
|
$
87,621
|
$
(90,391)
|
|
|
|
% of
sales
|
|
-26.6%
|
|
-13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months -
August 3, 2019
|
|
|
|
|
|
Operating
|
Asset
Impair
|
Adj
Operating
|
|
|
|
In
Thousands
|
|
Income
(Loss)
|
& Other
Adj
|
Income
(Loss)
|
|
|
|
Journeys
Group
|
|
$
30,305
|
$
-
|
$
30,305
|
|
|
|
Schuh
Group
|
|
(5,389)
|
-
|
(5,389)
|
|
|
|
Johnston & Murphy
Group
|
|
6,624
|
-
|
6,624
|
|
|
|
Licensed
Brands
|
|
178
|
-
|
178
|
|
|
|
Corporate and
Other
|
|
(19,672)
|
1,044
|
(18,628)
|
|
|
|
Total Operating
Income
|
|
$
12,046
|
$
1,044
|
$
13,090
|
|
|
|
% of
sales
|
|
1.2%
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/genesco-inc-reports-fiscal-2021-second-quarter-results-301123485.html
SOURCE Genesco Inc.