Genesco posts highest comp sales in two years

Genesco Inc. (GCO) surpassed market expectations on revenue and earnings numbers for the second quarter of 2019. Net sales grew 6% to $654 million versus the prior-year period. Meanwhile, total comparable sales rose 3%, reflecting the highest gain in over two years. The stock shot up 8.5% during pre-market hours.

GAAP earnings from continuing operations were $0.2 million or $0.01 per share compared to a loss of $3.9 million or $0.20 per share in the same period last year. Adjusted earnings from continuing operations came in at $0.8 million or $0.04 per share for the quarter.

Genesco posted sales increases for all its segments except for the Lids Sports Group, helped by positive comps. Same store sales grew 2% while comparable direct sales improved 7%.

The company posted comparable sales increases for the Journeys Group and Johnston & Murphy Group while the Lids Sports Group and Schuh Group saw declines. The drop in Schuh Group’s comps were mainly due to a challenging sales environment in the UK.

The retailer has been seeing an improving trend in comp sales thus far in the third quarter due to strength in the US footwear businesses driven by the back-to-school season. During the quarter, Genesco opened eight new stores and closed 31.

Genesco reaffirmed its guidance for full-year 2019 and expects comparable sales to be up 1-3%. Adjusted diluted EPS is expected to come in the range of $3.05 to $3.45.