Quick market observation: Genesco Inc. (NYSE: GCO)

On 13 May 2020, Genesco Inc. (NYSE: GCO) spotted trading -71.50% off 52-week high price. On the other end, the stock has been noted 174.89% away from the low price over the last 52-weeks. The stock changed -7.50% to recent value of $15.16. The stock transacted 266560 shares during most recent day however it has an average volume of 529.04K shares. The company has 14.11M of outstanding shares and 13.84M shares were floated in the market.

Genesco Inc. (GCO) recently stated GAAP earnings from continuing operations per diluted share of $2.49 for the three months ended February 1, 2020, contrast to earnings from continuing operations per diluted share of $1.53 in the fourth quarter last year.  Adjusted for the Excluded Items in both periods, the Company stated fourth quarter earnings from continuing operations per diluted share of $3.09, contrast to earnings from continuing operations per diluted share of $2.18 last year.

Fourth Quarter Review
Net sales for the fourth quarter of Fiscal 2020 were flat at $678M contrast to the fourth quarter of Fiscal 2019. Not Including the impact of lower exchange rates this year, revenue was still flat for the quarter.  Comparable sales increased 1%, with stores down 2% and direct up 19%. Direct-to-consumer sales were 16.6% of total retail sales for the quarter, contrast to 13.7% last year.

Fourth quarter gross margin this year was 46.9%, up 20 basis points, contrast with 46.7% last year. The increase as a percentage of sales reflects reduced markdowns for Journeys Group, more full-price selling for Schuh Group, partially offset by increased markdowns at Johnston & Murphy retail.

Selling and administrative expense as a percentage of sales for the fourth quarter this year was 38.5%, down 40 basis points, contrast to 38.9% of sales for the same period last year.  Adjusted selling and administrative expenses were flat for the fourth quarter this year.  Expenses reflect lower bonus expense and improved rent, offset by increased marketing expense.

Genesco’s GAAP operating income for the fourth quarter was $45.3M, or 6.7% of sales this year, contrast with $50.6M, or 7.5% of sales last year.  Adjusted for the Excluded Items in both periods, operating income for the fourth quarter was $59.3M, or 8.8% of sales this year, contrast with $58.5M, or 8.7% of sales last year.

The effective tax rate for the quarter was 21.0% in Fiscal 2020 contrast to 40.6% last year.  The adjusted tax rate, reflecting Excluded Items, was 25.3% in Fiscal 2020 contrast to 27.5% last year.  The lower adjusted tax rate for this year reflects ­­­­­­­­­­­­­­­­­­the benefit of additional income taxed at lower jurisdictional statutory tax rates, partially offset by a reduction in U.S. federal tax credits.

Cash, Borrowings and Inventory
Cash and cash equivalents at February 1, 2020, were $81.4M , contrast with $167.4M at February 2 , 2019.   Total debt at the end of the fourth quarter of Fiscal 2020 was $14.4M contrast with $65.7M at the end of last year’s fourth quarter, a decrease of 78%. Inventories were flat in the fourth quarter of Fiscal 2020 on a year-over-year basis.

Capital Expenditures and Store Activity
For the fourth quarter, capital expenditures were $8M, which consisted of $5M related to store remodels and new stores and $3M related to direct to consumer, omnichannel, information technology, distribution center and other projects. Depreciation and amortization was $12M.  During the quarter, the Company opened three new stores and closed 15 stores.  The Company ended the quarter with 1,480 stores contrast with 1,512 stores at the end of the fourth quarter last year, or a decrease of 2%.  Square footage was down 2% on a year-over-year basis.

Share Repurchases
For the fourth quarter of Fiscal 2020, the Company did not repurchase any shares.  Since late December 2018 through the end of Fiscal 2020, the Company has spent about $235M repurchasing over 5.5M shares across three authorizations totaling $325M, including a new $100M authorization reported in late September 2019.

Its earnings per share (EPS) expected to touch remained 45.20% for this year while earning per share for the next 5-years is expected to reach at 10.00%. GCO has a gross margin of 48.40% and an operating margin of 3.80% while its profit margin remained 2.80% for the last 12 months.   According to the most recent quarter its current ratio was 1.4 that represents company’s ability to meet its current financial obligations. The price moved ahead of -8.46% from the mean of 20 days, -12.27% from mean of 50 days SMA and performed -56.01% from mean of 200 days price. Company’s performance for the week was -1.49%, -12.32% for month and YTD performance remained -68.36%.

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