Genesco (GCO) swung back to profit in the fourth quarter after being in red in the last two quarters. Profits improved 20% to $56.3 million over last year mainly driven by Journeys. Top-line improved 5% to $930.4 million beating street estimates.
Due to the recent income tax reforms, the retailer saw tax benefits of $19.8 million in the quarter. Adjusted earnings were flat at $2.15 per share over the last year, while it more than doubled sequentially.
Comp sales improved 1% in the quarter aided by double-digit growth (11%) from Journeys. But this was offset by a 14% fall in Lids Sports Group. Digital sales rose 15%, which shows the shift in shopping preferences from physical stores to digital platforms.
Considering the lower footfalls in stores and other headwinds, the company expects non-GAAP earnings to be between $3.05 and $3.45 per share in the current fiscal year. It also expects to save $35 million to $40 million through cost savings initiatives.