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GENESCO Inc. Reports Operating Results (10-Q)

September 09, 2010 | About:
10qk

10qk

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GENESCO Inc. (GCO) filed Quarterly Report for the period ended 2010-07-31.

Genesco Inc. has a market cap of $643.5 million; its shares were traded at around $26.6 with a P/E ratio of 12.7 and P/S ratio of 0.4. Genesco Inc. had an annual average earning growth of 6.4% over the past 10 years.GCO is in the portfolios of Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

The Company recorded a pretax charge to earnings of $2.0 million in the second quarter of Fiscal 2011, including $1.9 million in asset impairments and $0.1 million for other legal matters. The Company recorded a pretax charge to earnings of $4.4 million in the first six months of Fiscal 2011, including $4.3 million in asset impairments and $0.1 million for other legal matters.

The Company recorded a pretax charge to earnings of $3.3 million in the second quarter of Fiscal 2010, including $3.4 million in asset impairments offset by a $0.1 million gain for other legal matters. The Company recorded a pretax charge to earnings of $8.3 million in the first six months of Fiscal 2010, including $7.9 million in asset impairments, $0.3 million for other legal matters and $0.1 million for lease terminations.

The net loss for the second quarter ended July 31, 2010 was $(3.2) million ($0.14 diluted loss per share) compared to $(2.7) million ($0.13 diluted loss per share) for the second quarter ended August 1, 2009. The net loss for the second quarter ended July 31, 2010 included a $0.8 million ($0.04 diluted loss per share) charge to earnings (net of tax) primarily for anticipated costs of environmental remediation related to facilities formerly operated by the Company. The Company recorded an effective income tax rate of 34.3% in the second quarter this year compared to 30.6% in the same period last year. The variance in the effective tax rate for the second quarter this year compared to the second quarter last year is primarily attributable to the mix in earnings between a profit in the Canadian operations and a loss in the U.S. operations.

Corporate and other expense for the second quarter ended July 31, 2010 was $9.7 million compared to $8.0 million for the second quarter ended August 1, 2009. Corporate expense in the second quarter this year included $2.0 million in restructuring and other charges, primarily for retail store asset impairments and other legal matters, a $0.5 million charge due to flood loss and $0.5 million in acquisition related professional fees. Last years expense in the second quarter included $3.3 million in restructuring and other charges, primarily for retail store asset impairments, other legal matters and lease terminations. Excluding the charges listed above, corporate and other expense increased primarily due to increased bonus accruals as a result of improving performance in the second quarter this year compared to deteriorating performance in the second quarter last year which led to bonus accrual reversals in the second quarter last year.

Earnings from continuing operations before income taxes (pretax earnings (loss)) for the six months ended July 31, 2010 were $10.7 million compared to a pretax loss of $(9.2) million for the six months ended August 1, 2009. Pretax earnings for the six months ended July 31, 2010 included restructuring and other charges of $4.4 million, primarily for retail store asset impairments and other legal matters. The pretax loss for the six months ended August 1, 2009 included a loss on the early retirement of debt of $5.1 million and restructuring and other charges of $8.3 million primarily for retail store asset impairments, other legal matters and lease terminations.

Net earnings for the six months ended July 31, 2010 were $5.4 million ($0.22 diluted earnings per share) compared to a net loss of $(8.5) million ($0.42 diluted loss per share) for the six months ended August 1, 2009. The net earnings for the six months ended July 31, 2010 included $0.7 million ($0.03 diluted loss per share) charge to earnings (net of tax) primarily for anticipated costs of environmental remediation related to facilities formerly operated by the Company. The net loss for the six months ended August 1, 2009 included $0.2 million ($0.01 diluted loss per share) charge to earnings (net of tax) primarily for anticipated costs of environmental remediation related to facilities formerly operated by the Company. The Company recorded an effective income tax rate of 42.2% in the first six months this year compared to 9.7% in the same period last year. The variance in the effective tax rate for the first six months this year compared to the first six months last year is primarily attributable to the non-deductibility of certain items incurred in connection with the inducement of the conversion of the 4 1/8% Debentures for common stock in the first six months last year.

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