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GENESCO Inc. Reports Operating Results (10-Q)

December 06, 2012 | About:
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10qk

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GENESCO Inc. (GCO) filed Quarterly Report for the period ended 2012-10-27.

Genesco, Inc. has a market cap of $3.4 billion; its shares were traded at around $54.78 . Genesco, Inc. had an annual average earning growth of 8.2% over the past 10 years. GuruFocus rated Genesco, Inc. the business predictability rank of 2-star.
This is the annual revenues and earnings per share of GCO over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of GCO.


Highlight of Business Operations:

The Company's net sales increased 7.8% during the third quarter of Fiscal 2013 compared to the same quarter of Fiscal 2012. The increase reflected (i) the acquisition of the Schuh Group in the second quarter last year, which contributed $92.3 million in sales during the three months ended October 27, 2012 as compared to $78.2 million during the third quarter of Fiscal 2012, (ii) a 10% increase in Journeys Group sales, (iii) a 10% increase in Johnston & Murphy Group sales, and (iv) a 7% increase in Licensed Brands sales. Gross margin as a percentage of net sales was down slightly at 50.3% during the third quarter of Fiscal 2013, compared to 50.4% for the same period last year. Selling and administrative expenses decreased as a percentage of net sales during the third quarter of Fiscal 2013, reflecting expense decreases as a percentage of net sales in all of the Company's business segments, except Schuh Group and Licensed Brands. Earnings from operations increased as a percentage of net sales during the third quarter of Fiscal 2013, reflecting improved earnings from operations as a percentage of net sales in Journeys Group, offset by decreased earnings from operations as a percentage of net sales in Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands.

The Company's net sales in the nine months ended October 27, 2012 increased 15.3% to $1.808 billion from $1.569 billion in the nine months ended October 29, 2011. Gross margin increased 15.3% to $914.0 million in the nine months this year from $793.0 million in the same period last year but was flat as a percentage of net sales at 50.6% . Selling and administrative expenses in the nine months this year increased 12.5% from the nine months last year but decreased as a percentage of net sales from 45.8% to 44.7%. The Company records buying and merchandising and occupancy costs in selling and administrative expense.

Net earnings for the nine months ended October 27, 2012 were $72.0 million ($2.98 diluted earnings per share) compared to net earnings of $40.5 million ($1.70 diluted earnings per share) for the nine months ended October 29, 2011. Net earnings for the nine months ended October 29, 2011 included a $1.0 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 28.9% in the first nine months this year compared to 40.4% in the same period last year.

Johnston & Murphy Group net sales increased 7.8% to $152.8 million for the nine months ended October 27, 2012 from $141.8 million for the nine months ended October 29, 2011, reflecting primarily a 4% increase in comparable store sales and a 16% increase in Johnston & Murphy wholesale sales offset by a 2% decrease in average stores operated for Johnston & Murphy retail operations. Unit sales for the Johnston & Murphy wholesale business increased 20% in the first nine months of Fiscal 2013, while the average price per pair of shoes decreased 3% for the same period. Retail operations accounted for 70.3% of the Johnston & Murphy Group's sales in the first nine months this year, down from 72.3% in the first nine months last year. The comparable store sales increase in the nine months ended October 27, 2012 reflects a 4% increase in the average price per pair of shoes for Johnston & Murphy retail operations, while footwear unit comparable sales were flat.

Cash provided by operating activities was $6.6 million in the first nine months of Fiscal 2013 compared to $12.9 million in the first nine months of Fiscal 2012. The $6.3 million decrease in cash flow from operating activities from last year reflects decreases in cash flow from changes in accounts payable and inventory of $43.0 million and $9.6 million, respectively, offset by increased earnings and a $13.6 million increase in cash flow from changes in other assets and liabilities. The $43.0 million decrease in cash flow from changes in accounts payable was due to changes in buying patterns and payment terms negotiated with individual vendors. The $9.6 million decrease in cash flow from inventory reflects seasonal increases in retail inventory to support holiday sales. The $13.6 million increase in cash flow from other assets and liabilities reflects the increase in the deferred purchase price accrual and contingent bonus accrual related to the Schuh acquisition.

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