US: Genesco swings to Q2 loss of $4.2m
Footwear, headwear and accessories retailer Genesco Inc today (30 August) said it swung to a second quarter loss, blaming a late start to the back-to-school season and sales tax holidays in Texas and Florida, coupled with "a generally challenging retail environment."
The Nashville, Tennessee-based firm, which is being bought by athletic shoe and apparel retailer The Finish Line in a deal worth around $1.5bn, reported a net loss for the quarter of $4.2m, or 19 cents a share, compared with net income of $5.9m, or 24 cents a share, a year earlier.
Results included costs of $5.5m, or approximately $0.13 per diluted share, related to the merger and the closure of its Underground Station stores.
Net sales for the quarter rose 8% to $328m from $304m in the same period last year.
Genesco chairman and chief executive officer Hal N Pennington said: "While back-to-school season is still in progress, we are encouraged by the improving trend in sales for the third quarter to date."
Net sales in the Journeys Group increased 8% to $148m in the second quarter, while same store sales declined 7%. Hat World Group sales rose 15% to $90m, while same store sales declined 2%.
Sales for the Underground Station Group, which includes the remaining Jarman stores, were $25m, and same store sales declined 23%, in line with expectations.
Johnston & Murphy Group's net sales increased 9% to $46m. Wholesale sales rose 18%, same store sales for the shops were up 5% and operating margin increased 200 basis points to 7.9%.
Second quarter sales of Licensed Brands increased 18% to $19m, with the Dockers footwear product performing well.
The company said that because of its merger agreement with a subsidiary of The Finish Line it does not expect to issue specific guidance with respect to sales and earnings expectations for the balance of the year.
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