In a preliminary statement about its results for the fourth quarter ending in late January, Genesco said its overall revenues were flat in the period through Jan. 5, exceeding its earlier expectations. On a comparable basis, sales declined by 2 percent at its physical stores but grew by 11 percent through e-commerce and direct catalog sales.
The company's Journeys Group of shoe retail stores performed badly, as its comparable store sales fell by 6 percent during the period. They were already down by 12 percent in November. At an investors' conference, the management blamed the lack of an on-trend assortment in the stores and said it will correct that by the spring, offering more sneakers and athletic styles and adding fresh products in January and February.
Journeys Kids, a chain that may be expanded from 200 to 400 stores, went through its fourteenth year of comparable store gains. A double-digit increase was recorded at the Journeys.com website, which will benefit from new investments in an expanded distribution center with a focus on consumers' orders.
Journeys' poor performance was compensated by same-store increases of 8 percent for the Lids Sports Group. Comparable store sales were down by one percent at Johnston & Murphy, and they were up by one percent at Genesco's U.K.-based subsidiary, the Schuh Group, which braved a promotional sales environment induced by Brexit. The weaker pound was a drag on Schuh's earnings, but the gross margin was higher at Lids.
The management said it expected to give up some gross margin for the quarter in order to optimize inventories across the group, but adjusted earnings per share will likely end up at the high end of the company's most recent projections. Overall, comparable store sales should be flat or down by about one percent for the quarter, compared with a previously projected decline of two to three percent. The final results for the quarter and the financial year will be disclosed on March 10.
Another major American shoe retailer, Shoe Carnival, told analysts at the same conference that it had to cut down prices to clear merchandise during the recent holiday season, giving up 2.1 percentage points of margin. After a 3.3 percent sales drop on a same-store basis in November, traffic declined further in December at the company's physical stores.
Shoe Carnival is targeting 30 percent revenue growth from e-commerce in the next three years, driven primarily by shopping on mobile devices, which already accounts for 40 percent of online sales. The company's omni-channel initiatives include in-store ordering and shipping home or to the store. The selection will expand greatly for the customer through a new initiative based on vendor-drop shipping.
Steve Madden said its sales declined in the fourth quarter ended Dec. 31 by 2.3 percent to $336.4 million as compared to the same period a year earlier. Retail sales grew by 7.1 percent to $84.9 million, but the wholesale division booked a 5.1 percent drop to $251.5 million. Gross margins improved beyond expectations at the wholesale level, however.
The management said it was pleased with the quarterly performance, which came in spite of a “challenging retail environment.” Sales were lower than expected because of softness in cold-weather accessories and the group's decision to wind down a distribution agreement in Asia, where it is going to transition to a new business model in the course of this year. No details were given about the change at this stage.
For the full financial year, Steve Madden's sales were down by 0.4 percent to around $1.4 billion. While wholesale revenues fell by 2.4 percent to $1.1 billion, retail sales grew by 9.3 percent to $262.8 million, with growth of 9.3 percent on a same-store basis.
An American shoe retailer that went public recently, Boot Barn, reported preliminary figures for its third quarter, ended Dec. 24, which showed a 3 percent drop in sales to around $199 million, but same-store sales went up by about 0.2 percent, performing better online than offline.
The management blamed unseasonably warm weather in the core market, uncertain market conditions due to the presidential elections and continued sales pressure in markets impacted by lower prices for oil and other commodities. November was particularly challenging, but the business strengthened in December.
Boot Barn opened seven new stores during the quarter. It successfully launched touch screen shopping tables at some stores, offering a much broader assortment for shipping within two days.