US firm Genesco's operating income jumps 7.3%, gross margin up 210 bps

The same store sales increased 25 per cent over last year, store sales were above pre-pandemic levels and the e-commerce sales increased 79 per cent from third quarter two years ago.

The company is continuing its business principally under the names Journeys, Journeys Kidz, Little Burgundy, Schuh, Schuh Kids, Johnston & Murphy. The overall sales for the third quarter this year compared to the third quarter of fiscal 2021 were up 20 per cent at Journeys, up 33 per cent at Schuh, up 69 per cent at Johnston & Murphy and up 6 per cent at Licensed Brands.

"Our third quarter results exceeded our expectations and were well above pre-pandemic levels. Strong sales growth, solid gross margins, and well managed expenses fueled a 69% increase in operating income versus the third quarter Fiscal 2020 two years ago, helping deliver record third quarter adjusted EPS of $2.36 compared to $1.33 in Fiscal 2020." Thomas A George, Genesco’s chief financial officer, said in a press release.

The gross margin of the company stood at 49.2 per cent of sales with an increase of 210 basis points, compared with 47.1 per cent last year.

Genesco's GAAP operating income for the third quarter was $43.8 million or 7.3 per cent of sales this year, compared with $8.2 million or 1.7 per cent of sales last year and $25.9 million or 4.8 per cent of sales in the third quarter of fiscal 2020.

As of October 30, 2021, the cash and cash equivalents were $282.8 million, compared with $115.1 million in the same period last year. The total debt at the end of the third quarter of fiscal 2022 was $15.6 million compared with $32.9 million at the end of last year's third quarter. On the other hand, the inventories decreased 8 per cent in the third quarter of present fiscal on a year-over-year basis.

The company also repurchased 521,693 shares during the quarter at a cost of $30.6 million or an average of $58.71 per share.

Based on the quarter’s performance, the company expects the sales to be up by 9 per cent to 11 per cent, compared to fiscal 2020 and the adjusted diluted earnings per share from continuing operations in the range of $6.40 to $6.90, which represents growth of approximately 45 per cent at the mid-point compared to fiscal 2020, with an expectation that earnings per share for the year will be near the mid-point of the range.

Fibre2Fashion News Desk (DD)