At Genesco, quarterly fell by 3.3 percent to $451.7 million, while earnings from continuing operations shot up by 554.9 percent to $23.7 million. The gross profit margin for the quarter, which ended Jan. 31, slipped by 0.2 percentage points to 48.6 percent compared with the same quarter last year.
Adjusted for various charges, including significant ones for litigation related to the merger with the Finish Line in the 2008 quarter, earnings from continuing operations were 9.5 percent less at $23.9 million. Comparable store sales fell by 5 percent overall, and fell for each of its businesses: Journeys Group by 2 percent, Underground Station by 12 percent, and Johnston & Murphy retail by 17 percent.
The company said that sales in the fourth quarter were erratic, up and down from week to week, though comparable figures were up in the weeks before and after Christmas. Revenues were down from what Genesco forecast in January because of a marked weakening in the middle of that month.
The Journeys Group saw fourth-quarter sales up by 1.2 percent to $229.5 million, while those of the Underground Station Group fell by 20.6 percent to $34.0 million and the Johnston & Murphy Group dropped by 15.8 percent. The quarterly operating income for Journeys Group crept up by 2.1 percent to $24.5 million, but fell significantly for Underground Station and Johnston & Murphy, by 74.0 percent to $593,000 and by 74.6 percent to $1.87 million respectively.
Within the Journeys Group, comp sales were down by 3 percent for Journeys stores for the quarter. At Journeys Kidz, fourth quarter footwear comps fell by 1 percent. The average sales price grew by 6.6 percent. Shi by Journeys had a jump in comparable stores sales of 11 percent, and average selling prices grew by 12.7 percent. Underground Station had a 7 percent drop in footwear comps, and average sales price fell by 3 percent.
For the year, Genesco saw a 3.3 percent increase in sales, and the jump in earnings from continuing operations was even more significant: up by 1,763 percent to $158.1 million. Adjusted for the unusual charges in 2008, though, net earnings fell by 4.2 percent to $40.8 million.
The annual revenues at Journeys Group were up by 6.5 percent to $760.0 million, but they fell by 10.6 percent to $110.9 million for Underground Station and by 7.5 percent to $178.0 million for Johnston & Murphy. Operating income for the year fell at Journeys Group by 4.0 percent to $49.1 million and at Johnston & Murphy by 49.2 percent to $10.1 million, while Underground Station’s loss improved to $5.66 million, from a loss of $7.71 million the year before.
The Journeys Group includes the Journeys, Journeys Kidz and Shi by Journeys chains. Average selling prices rose by 1 percent at Journeys stores for the year, and comps were also up by 1 percent. At Journeys Kidz, average unit prices were up by 3.2 percent. Margins at Shi by Journeys were satisfactory.
At the end of the year, the Journeys Group had 1,012 stores, up from 967 at the end of the 2008 fiscal year. Underground Station net closed 12 stores for a total of 180 as of Jan. 31, 2009, and Johnston & Murphy saw an increase of just four stores to157.
For the current fiscal year, Genesco has left itself a wide range for its expected results, because of the uncertainty in the global economy. Its «baseline» plan looks to an improvement in the second half, forecasting comparable store sales down about 3 percent each in the first and second quarters, but flat in the third quarter and growing by about 2 percent for the fourth quarter, partly because of the weakness of 2008 and 2009’s fourth quarters. For the full year this translates to comparable store sales down by 1 percent.
Looking at it more pessimistically, Genesco could see drop in comps of 4 percent in each of the first two quarters, and then down by 3 percent in the next two quarters, for negative 3 percent for the year.
However, the company did note that in February, comparable store sales were up by 7 percent, with Journeys Group seeing a 10 percent increase while Underground Station fell by 1 percent. Nonetheless, it said that it did not think the «choppiness in sales» was behind it. It now sees its previous plan to make Underground Station profitable in the current year as unlikely.
The company plans to open 12 new Journeys stores in the current fiscal year while closing 10. It expects to open as many as 10 Journeys by Kidz stores and two or three Shi by Journeys.