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GENESCO Inc. Reports Operating Results (10-Q)

June 09, 2010 | About:
10qk

10qk

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GENESCO Inc. (GCO) filed Quarterly Report for the period ended 2010-05-01.

Genesco Inc. has a market cap of $682.9 million; its shares were traded at around $28.4 with a P/E ratio of 13.7 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, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.

Highlight of Business Operations:

37 stores in seven states as of May 1, 2010, for a preliminary purchase price of $13.9 million plus assumed debt of $1.6 million with $4.5 million of that amount withheld until satisfaction of certain closing contingencies. Subsequently, in the first quarter of Fiscal 2011, $3.0 million of the $4.5 million was paid to the seller.

The Company recorded a pretax charge to earnings of $2.4 million in the first quarter of Fiscal 2011, primarily for asset impairments. The Company recorded a pretax charge to earnings of $5.0 million in the first quarter of Fiscal 2010, including $4.5 million in asset impairments, $0.4 million for other legal matters and $0.1 million for lease terminations.

Earnings from continuing operations before income taxes (pretax earnings (loss)) for the first quarter ended May 1, 2010 were $14.3 million compared to a pretax loss of $(5.3) million for the first quarter ended May 2, 2009. Pretax earnings for the first quarter ended May 1, 2010 included restructuring and other charges of $2.4 million, primarily for retail store asset impairments. The pretax loss for the first quarter ended May 2, 2009 included a loss on the early retirement of debt of $5.1 million and restructuring and other charges of $5.0 million, primarily for retail store asset impairments, other legal matters and lease terminations.

Net earnings for the first quarter ended May 1, 2010 were $8.6 million ($0.36 diluted earnings per share) compared to a net loss of $(5.8) million ($0.31 diluted loss per share) for the first quarter ended May 2, 2009. The Company recorded an effective income tax rate of 40.2% in the first quarter this year compared to (5.3)% in the same period last year. The variance in the effective tax rate for the first quarter this year compared to the first quarter 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 quarter last year.

Corporate and other expense for the first quarter ended May 1, 2010 was $12.0 million compared to $18.5 million for the first quarter ended May 2, 2009. Corporate expense in the first quarter this year included $2.4 million in restructuring and other charges, primarily for retail store asset impairments. Last years expense in the first quarter included a $5.1 million loss on the early retirement of debt and $5.0 million in restructuring and other charges, primarily for retail store asset

Cash provided by operating activities was $35.9 million in the first three months of Fiscal 2011 compared to $23.1 million in the first three months of Fiscal 2010. The $12.8 million increase in cash flow from operating activities from last year reflects increases in cash flow from improved earnings and changes in other accrued liabilities and accounts payable of $8.9 million and $8.2 million, respectively, offset by a decrease in cash flow from changes in inventory of $11.9 million. The $8.9 million increase in cash flow from other accrued liabilities was due to increased accrued income taxes in the first quarter this year compared to the first quarter last year and increased bonus accruals. The $8.2 million increase in cash flow from accounts payable reflected changes in buying patterns and payment terms negotiated with individual vendors. The $11.9 million decrease in cash flow from inventory reflected last years efforts to reduce wholesale and Journeys Group inventories and this years increased purchases in the Journeys Group and Lids Sports Group to support sales offset by decreased inventory in the wholesale businesses.

Read the The complete Report

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