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Sears Hometown and Outlet Stores reports mostly negative Q3 results

BY Dan Berthiaume

Hoffman Estates, Ill. – Sears Hometown and Outlet Stores reported mostly negative financial results for the third quarter of fiscal 2013. Net earnings fell about 12% to $7.69 million, from $8.76 million.

A 2% decrease in same-store sales and unfavorable calendar shift due to the 53rd week in fiscal 2012 offset slight growth in net sales to $561.1 million from $556.9 million.

“Sales of home appliances increased during the quarter, while sales of lawn and garden, consumer electronics, and apparel (which is only sold in Outlet Stores) declined,” said Bruce Johnson, CEO and president. “The fourth quarter of 2013 will be the last quarter where we will have a significant negative comparable store sales impact due to our exit from consumer electronics in most stores in our Hometown segment. In our Outlet segment, we completed the initial test of franchising and began rolling out this model, which generated higher initial franchise revenues in the quarter and allows us to continue our transition to an asset light, franchised operation. We also completed a successful test of furniture sales in our Outlet stores and have a limited selection of furniture inventory in place across the format for the holiday season. This continues our strategy of shifting our product mix toward higher margin categories, which began last fall with reductions in consumer electronics and expansion in mattresses and tools."

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Genesco Q3 net earnings fall

BY Dan Berthiaume

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."

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Choppy environment cause for concern at Genesco

BY CSA STAFF

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."

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