Boosted by the ongoing strength of their U.S. footwear businesses, several big retailers in the country posted upbeat preliminary results, often surpassing expectations. Genesco posted a comparable sales increase of 4 percent for the quarter ended on Jan. 10, 2019. This came after the company posted a 4 percent same-store sales gain in the third quarter, its highest increase in more than two years. However, the highly promotional U.K. market continued to negatively impact the performance of its British retail subsidiary, the Schuh Group.
Also on a comparable basis, sales were up by 3 percent from the year-ago period at Genesco's physical stores, while e-commerce sales jumped by 8 percent.
Looking at the group's various retail chains, sales grew by 7 percent at the Journeys Group, by 2 percent at the Lids Sports Group and by 5 percent at Johnston & Murphy Group.
However, they declined by 9 percent at the Schuh Group. The management warned last quarter that it anticipated a challenging and promotional holiday season in the U.K., due to a sharp slowdown in consumer spending in the autumn. This was attributed to a lack of progress in the Brexit negotiations with the European Union, coupled with a transitory pick-up in inflation and cooled-down retail sales in the U.K., which put even more pressure on the already struggling footwear and apparel categories.
Despite this poor performance from Schuh, the management said that the company pulled off a very solid holiday selling season, with stronger than expected results, especially at Journeys.
Genesco plans to announce its final results for the fourth quarter and fiscal year ending Feb. 2, 2019, on March 14, 2019.
On Dec. 14, the company announced that it has entered into a definitive agreement for the sale of Lids for $100 million in cash to FanzzLids Holdings, a company controlled by affiliates of Ames Watson Capital. Ames Watson is the owner of Fanzz, a specialty retailer of officially licensed sports apparel. The group expects that the cash proceeds will be used to repurchase shares of the company's common stock.