Genesco Q3 net earnings fall
Nashville, Tenn. – Genesco’s net earnings fell 34% to $27.7 million, from $42.1 million during the third quarter of fiscal 2013 for Genesco. The company also reported a slight increase in net sales, to $666.3 million from $664.4 million, during the same period.
Genesco attributed part of its net earnings decline to expenses including charges relating to accounting for deferred bonuses, deferred purchase price payments in connection with the acquisition of Schuh Group Limited which are required to be expensed as compensation, intrusion expenses, asset impairment charges and other legal matters. Same-store sales fell 1%.
“We continue to focus on successfully navigating the current headwinds while staying the course on our long-term strategic direction,” said Robert J. Dennis, chairman, president and CEO of Genesco. “We recently updated our five-year plan and now expect annual sales to hit $3.9 billion and operating margins to be approximately 9% to 9.5% by Fiscal 2018. We remain confident in our strategic position and our ability to achieve our growth targets and generate increased value for our shareholders."
Choppy environment cause for concern at Genesco
Genesco, the company behind Lids and Journeys, is the latest company to express concern about the holiday season and lower fourth-quarter expectations after producing a solid third-quarter performance.
The operator of roughly 2,500 footwear, apparel, accessories and headwear stores said its third-quarter sales were essentially flat with the prior year at roughly $666 million while same-store sales fell 1%. A 5% comp increase at the 1,002 unit Lids division was offset by a 2% comp decline at Journeys. The company also saw a 10% decrease at its Schuh Group while the Johnston & Murphy footwear group increased 7%. Profits from continuing operations adjusted to exclude a litany of non-recurring items were $33.8 million, or $1.43 a share, compared to $34.5 million, or $1.44 the prior year.
"As we expected, easier comparisons in our U.S.-based retail businesses as the third quarter progressed allowed for a modest improvement in consolidated comparable sales relative to recent quarters and overall results in line with our expectations,” said Robert Dennis, Genesco chairman, president and CEO. "Comparable sales for the fourth quarter to date through Tuesday, December 3, were flat. Because the retail environment remains somewhat choppy and the calendar shifts make meaningful comparisons difficult, we are adopting a slightly more cautious outlook for the balance of the year.”
The company said its expects full-year adjusted profits from continuing operations to range from $5.10 to $5.20, 10 cents lower than its earlier forecast range.
"We continue to focus on successfully navigating the current headwinds while staying the course on our long-term strategic direction,” Dennis said. “We recently updated our five year plan and now expect annual sales to hit $3.9 billion and operating margins to be approximately 9% to 9.5% by fiscal 2018. We remain confident in our strategic position and our ability to achieve our growth targets and generate increased value for our shareholders."
Big Lots Q3 loss widens; to shutter Canadian operations
Columbus, Ohio – Big Lots reported a net loss of $9.5 million for the third quarter of fiscal 2013, up from a net loss of about $6 million in the year-ago period. The retailer also said it will exit the unprofitable Canadian market, which it entered through an acquisition in 2011.
Net sales grew about 2% in the same period, to $1.15 billion from $1.13 billion, and consolidated same-store sales declined about 2.5%.
Higher operating expenses offset the increase in net sales, resulting in the net loss, which came in higher than anticipated by Wall Street. For the full year fiscal 2013, Big Lots is forecasting a consolidated same-store sales decline of 2% to 3% and a total U.S. sales decrease in the range of 1% to 2%.
The retailer said it will close its stores in Canada, where it operates 73 locations. The stores are part of the Liquidation World Liquidation World chain that Big Lots acquired in 2011. Big Lots intends to begin an orderly wind-down process immediately and expect that principal operations will cease during the first quarter of fiscal 2014.
“We acquired a struggling Canadian business in July 2011 with the intention of revitalizing it and using it as the base for bringing extreme value merchandising and the Big Lots brand to customers in Canada,” the company said its earnings release. “Over the last two years, we have invested in this business and our team in Canada has worked diligently to turn it around. However, we have not been able to gain the necessary traction in the Canadian marketplace that had originally been anticipated and believe that the significant further capital investments and execution risk associated with continuing to pursue a turnaround would not be in the best interests of our company and shareholders.”
Big Lots also plans to close down its wholesale operations in the fourth quarter of this fiscal year, at which time it will be treated as discontinued operations.