Nashville, TN-based Genesco Inc. (GCO) reported a 10% increase in its comparable-store sales (comps), including both stores and direct sales, for the fourth-quarter-to-date period ended Jan 3, 2015. On a stand-alone basis, comps at the company’s stores were up 9% while its eCommerce and catalog direct sales businesses reported comps growth of 25%.
The improvement in overall comps was primarily led by 15% growth at the Journeys Group division on the back of favorable fashion trends and efficient execution. This was followed by 6% comps growth at both Lids Sports Group and the Schuh Group. Lastly, the Johnston & Murphy Group division posted a 3% increase in comps for the period.
While the Lids Sports Group posted positive overall comps for the period, the company noted that this improvement was partly due to the promotional pricing adopted to manage inventory. Moreover, the company remains cautious about the performance of this division through the rest of the quarter as results partly depend on the performance of certain teams and also due to difficult comparisons from last year.
Despite the encouraging holiday comps trends and its continuation into January, the company retained its adjusted earnings guidance for fiscal 2015 on account of gross margin pressures, lower-than-expected non-comparable sales and impact from exchange rate translations in certain businesses. The company continues to project earnings per share in the range of $4.75 to $4.85.
Shares of this apparel retailer dropped 4.2% to $76.48 during yesterday’s trade as investors were disappointed with the company’s reaffirmed guidance despite solid holiday comps.
Genesco, which is scheduled to report fourth quarter and fiscal 2015 results on Mar 12, currently carries a Zacks Rank #4 (Sell).
The holiday shopping season this year has been an uplifting one for most retailers with many of them reporting solid sales data for the months of November and December. Further, these retailers, including Pacific Sunwear of California Inc. (PSUN) and American Eagle Outfitters Inc. (AEO), raised their outlook for the fourth quarter of fiscal 2014.
Another retailer that posted impressive results this holiday season is Aeropostale Inc. (ARO), which has narrowed its loss estimate for the fourth quarter. This was driven by a 9% decline in comps for November and December, compared with a 15% decline reported in the year-ago period.
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