Attached files
| file | filename |
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| EX-99.2 - EXHIBIT 99.2 - GENESCO INC | ex992earnings083117.htm |
| 8-K - 8-K - GENESCO INC | a8-kearnings083117.htm |
Exhibit 99.1
Financial Contact: Mimi E. Vaughn (615) 367-7386
Media Contact: Claire S. McCall (615) 367-8283
GENESCO REPORTS SECOND QUARTER FISCAL 2018 RESULTS
NASHVILLE, Tenn., Aug. 31, 2017 -- Genesco Inc. (NYSE: GCO) today reported a loss from continuing operations for the second quarter ended July 29, 2017, of $3.9 million, or ($0.20) per diluted share, compared to earnings from continuing operations of $14.5 million, or $0.72 per diluted share, for the second quarter ended July 30, 2016. Fiscal 2018 second quarter results reflect the negative impact from new accounting guidelines for share-based payments totaling $2.2 million, or $0.11 per diluted share after-tax, and a pre-tax charge of $0.3 million, or $0.01 per diluted share after-tax in acquisition transition expenses, partially offset by after-tax gain of $0.5 million, or $0.02 per diluted share from income tax matters. Fiscal 2017 second quarter results reflect a pretax gain of $10.4 million, or $0.34 per diluted share after tax, including an $8.9 million gain on network intrusion expenses as a result of a litigation settlement, and a $2.5 million gain on the sale of Lids Team Sports, partially offset by $1.0 million for asset impairment charges, plus an after-tax gain of $0.9 million, or $0.04 per diluted share from income tax matters.
Adjusted for the items described above in both periods, the loss from continuing operations was $2.0 million, or ($0.10) per diluted share, for the second quarter of Fiscal 2018, compared to earnings from continuing operations of $6.9 million, or $0.34 per diluted share, for the second quarter of Fiscal 2017. For consistency with Fiscal 2018’s previously announced earnings expectations and with previously reported adjusted results for the prior year period, the Company believes that the disclosure of the results from continuing operations adjusted for these items will be useful to investors. A reconciliation of earnings and earnings per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles with the adjusted earnings and earnings per share numbers presented in this paragraph is set forth on Schedule B to this press release.
Net sales for the second quarter of Fiscal 2018 decreased 1.4% to $617 million from $626 million in the second quarter of Fiscal 2017. Without the sale in December of the SureGrip business and the impact of foreign exchange, revenue would have been flat. Consolidated second quarter 2018 comparable sales, including same store sales and comparable e-commerce and catalog sales, were flat, with a 1% increase in the Journeys Group, a 2% decrease in the Lids Sports Group, a 3% increase in the Schuh Group, and a 1% decrease in the Johnston & Murphy Group. Comparable sales for the Company included a 2% decrease in same store sales and a 30% increase in e-commerce sales.
Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, “The second quarter was a bit more challenging than we expected, as positive momentum at Journeys was offset by increasing headwinds at Lids. Journeys comps improved significantly, as we emerged from the latest fashion cycle. We also continued to experience a more dramatic shift in consumer shopping away from stores to digital across our divisions which pressured profitability, as we deleveraged our fixed expenses on negative store comps. As a result of the overall flat comp and these factors, combined with gross margin headwinds, primarily from higher e-commerce sales, product mix shifts, and increased promotional activity, earnings were considerably lower than last year and slightly below our internal forecasts.
“The positive sales trends we experienced at Journeys and Schuh during the second quarter accelerated nicely during August in the important back-to-school selling period, and we believe that both
Exhibit 99.1
businesses are in stronger merchandise positions heading into the holiday season compared with a year ago. Unfortunately, current trends at Lids continue to run well below our expectations which will make it more difficult to lap the tough comparisons we face beginning in October from last year’s Cubs World Series win. In addition, we have adopted a more conservative outlook for store-based sales given the anemic level of mall traffic year-to-date and the more pronounced shift in consumer spending away from stores to online. Therefore, we now expect adjusted diluted earnings per share for the year in the range of $3.35 to $3.65, compared to our previously issued guidance range of $3.90 to $4.05, a wider range than usual given some of the opportunities and challenges in our business.” These expectations do not include expected non-cash asset impairments and other charges, estimated in the range of $4.7 million to $5.8 million pretax, or $0.16 to $0.20 per share after tax, for the full fiscal year. They also do not include certain tax effects related to equity grants pursuant to the newly effective ASU 2016-09, estimated at $0.11 per share after tax. This guidance assumes comparable sales in the range of -1% to 1% for the full year. A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release.
Dennis concluded, “While we are disappointed with our reduced outlook, we believe we have established new ranges for sales and earnings that better reflect the current operating environment. I believe that our approach to managing the business strikes the right balance between protecting near-term profitability and executing our long range plans, and we expect our concepts to emerge from the ongoing retail transformation in even stronger strategic positions.”
Conference Call and Management Commentary
The Company has posted detailed financial commentary in writing on its website, www.genesco.com, in the investor relations section. The Company's live conference call on August 31, 2017 at 7:30 a.m. (Central time), may be accessed through the Company's internet website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.
Cautionary Note Concerning Forward-Looking Statements
This release contains forward-looking statements, including those regarding the performance outlook for the Company and its individual businesses (including, without limitation, sales, expenses, margins, growth and earnings) and all other statements not addressing solely historical facts or present conditions. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to estimates and projections reflected in forward-looking statements, including the level and timing of promotional activity necessary to maintain inventories at appropriate levels; the timing and amount of non-cash asset impairments related to retail store fixed assets and intangible assets of acquired businesses, especially in view of the Company’s recent market valuation; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; the level of chargebacks from credit card users for fraudulent purchases or other reasons; weakness in the consumer economy and retail industry; effects on local consumer demand or on the national economy related to Hurricane Harvey; competition in the Company's markets, including online; fashion trends that affect the sales or product margins of the Company's retail product offerings; weakness in shopping mall traffic and challenges to the viability of malls where the Company operates stores, including weakness related to planned closings of anchor and department stores and other stores or other factors; the imposition of tariffs on imported products; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers or the inability of wholesale customers or consumers to obtain credit; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates,
Exhibit 99.1
foreign labor and material costs, and other factors affecting the cost of products; the effects of the British decision to exit the European Union, including potential effects on consumer demand, currency exchange rates, and the supply chain; the Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons; and the performance of athletic teams, the participants in major sporting events such as the Super Bowl and World Series, developments with respect to certain individual athletes, and other sports-related events or changes that may affect period-to-period comparisons in the Company's Lids Sports Group retail businesses. Additional factors that could affect the Company's prospects and cause differences from expectations include the ability to build, open, staff and support additional retail stores and to renew leases in existing stores and control occupancy costs, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets or intangible assets or other adverse financial consequences; unexpected changes to the market for the Company's shares; variations from expected pension-related charges caused by conditions in the financial markets; disruptions in the Company’s information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; and the cost and outcome of litigation, investigations and environmental matters involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, our SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via our website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.
About Genesco Inc.
Genesco Inc., a Nashville-based specialty retailer, sells footwear, headwear, sports apparel and accessories in more than 2,740 retail stores and leased departments throughout the U.S., Canada, the United Kingdom, the Republic of Ireland and Germany, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Schuh Kids, Little Burgundy, Lids, Locker Room by Lids, Lids Clubhouse, Johnston & Murphy, and on internet websites www.journeys.com, www.journeyskidz.com, www.journeys.ca, www.shibyjourneys.com, www.schuh.co.uk, www.littleburgundyshoes.com, www.johnstonmurphy.com, www.lids.com, www.lids.ca, www.lidslockerroom.com, www.lidsclubhouse.com, www.neweracap.com, www.trask.com, and www.dockersshoes.com. The Company's Lids Sports Group division operates the Lids headwear stores, the Locker Room by Lids and other team sports fan shops and single team clubhouse stores. In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the Trask brand, the licensed Dockers brand, G.H. Bass & Co., and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.
Exhibit 99.1
GENESCO INC. | |||||||||||||||
Consolidated Earnings Summary | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
July 29, | July 30, | July 29, | July 30, | ||||||||||||
In Thousands | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net sales | $ | 616,506 | $ | 625,557 | $ | 1,259,874 | $ | 1,274,350 | |||||||
Cost of sales | 309,999 | 310,820 | 634,454 | 629,916 | |||||||||||
Selling and administrative expenses | 308,459 | 302,662 | 624,459 | 610,905 | |||||||||||
Asset impairments and other, net | 58 | (7,945 | ) | 177 | (4,388 | ) | |||||||||
Earnings from operations | (2,010 | ) | 20,020 | 784 | 37,917 | ||||||||||
Gain on sale of Lids Team Sports | — | (2,485 | ) | — | (2,485 | ) | |||||||||
Interest expense, net | 1,249 | 1,306 | 2,426 | 2,443 | |||||||||||
Earnings (loss) from continuing operations | |||||||||||||||
before income taxes | (3,259 | ) | 21,199 | (1,642 | ) | 37,959 | |||||||||
Income tax expense | 616 | 6,695 | 1,236 | 12,891 | |||||||||||
Earnings (loss) from continuing operations | (3,875 | ) | 14,504 | (2,878 | ) | 25,068 | |||||||||
Provision for discontinued operations | (73 | ) | 74 | (185 | ) | (80 | ) | ||||||||
Net Earnings (Loss) | $ | (3,948 | ) | $ | 14,578 | $ | (3,063 | ) | $ | 24,988 | |||||
Earnings Per Share Information | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
July 29, | July 30, | July 29, | July 30, | ||||||||||||
In Thousands (except per share amounts) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Average common shares - Basic EPS | 19,152 | 20,195 | 19,171 | 20,505 | |||||||||||
Basic earnings (loss) per share: | |||||||||||||||
Before discontinued operations | $ | (0.20 | ) | $ | 0.72 | $ | (0.15 | ) | $ | 1.22 | |||||
Net earnings (loss) | $ | (0.21 | ) | $ | 0.72 | $ | (0.16 | ) | $ | 1.22 | |||||
Average common and common | |||||||||||||||
equivalent shares - Diluted EPS | 19,152 | 20,244 | 19,171 | 20,617 | |||||||||||
Diluted earnings (loss) per share: | |||||||||||||||
Before discontinued operations | $ | (0.20 | ) | $ | 0.72 | $ | (0.15 | ) | $ | 1.22 | |||||
Net earnings (loss) | $ | (0.21 | ) | $ | 0.72 | $ | (0.16 | ) | $ | 1.21 | |||||
Exhibit 99.1
GENESCO INC. | |||||||||||||||
Consolidated Earnings Summary | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
July 29, | July 30, | July 29, | July 30, | ||||||||||||
In Thousands | 2017 | 2016 | 2017 | 2016 | |||||||||||
Sales: | |||||||||||||||
Journeys Group | $ | 258,953 | $ | 252,134 | $ | 543,072 | $ | 546,355 | |||||||
Schuh Group | 97,625 | 96,960 | 174,081 | 172,630 | |||||||||||
Lids Sports Group | 180,230 | 188,912 | 357,131 | 368,288 | |||||||||||
Johnston & Murphy Group | 64,860 | 65,151 | 137,653 | 135,126 | |||||||||||
Licensed Brands | 14,697 | 22,100 | 47,707 | 51,566 | |||||||||||
Corporate and Other | 141 | 300 | 230 | 385 | |||||||||||
Net Sales | $ | 616,506 | $ | 625,557 | $ | 1,259,874 | $ | 1,274,350 | |||||||
Operating Income (Loss): | |||||||||||||||
Journeys Group(1) | $ | (2,194 | ) | $ | 4,481 | $ | 5,278 | $ | 24,101 | ||||||
Schuh Group | 4,538 | 5,693 | 3,851 | 3,032 | |||||||||||
Lids Sports Group | 3,040 | 7,132 | 1,254 | 13,169 | |||||||||||
Johnston & Murphy Group | 1,547 | 2,255 | 5,367 | 7,097 | |||||||||||
Licensed Brands | (1,051 | ) | 234 | 1,224 | 2,087 | ||||||||||
Corporate and Other (2) | (7,890 | ) | 225 | (16,190 | ) | (11,569 | ) | ||||||||
Earnings (loss) from operations | (2,010 | ) | 20,020 | 784 | 37,917 | ||||||||||
Gain on sale of Lids Team Sports | — | (2,485 | ) | — | (2,485 | ) | |||||||||
Interest, net | 1,249 | 1,306 | 2,426 | 2,443 | |||||||||||
Earnings (loss) from continuing operations | |||||||||||||||
before income taxes | (3,259 | ) | 21,199 | (1,642 | ) | 37,959 | |||||||||
Income tax expense | 616 | 6,695 | 1,236 | 12,891 | |||||||||||
Earnings (loss) from continuing operations | (3,875 | ) | 14,504 | (2,878 | ) | 25,068 | |||||||||
Provision for discontinued operations | (73 | ) | 74 | (185 | ) | (80 | ) | ||||||||
Net Earnings (Loss) | $ | (3,948 | ) | $ | 14,578 | $ | (3,063 | ) | $ | 24,988 | |||||
(1) Includes a $0.3 million charge for acquisition transition expenses.
(2) Includes a $0.1 million charge and a $0.2 million charge in the second quarter and first six months of Fiscal 2018, respectively,
for asset impairments.
Includes a $7.9 million gain in the second quarter of Fiscal 2017 which includes an $8.9 million gain for network intrusion expenses as a result of a litigation settlement, partially offset by $1.0 million for asset impairments. Includes a $4.4 million gain for the first six months of Fiscal 2017 which includes an $8.9 million gain for network intrusion expenses as a result of a litigation settlement, partially offset by $4.4 million for asset impairments and $0.1 million for other legal matters.
Exhibit 99.1
GENESCO INC. | |||||||
Consolidated Balance Sheet | |||||||
July 29, | July 30, | ||||||
In Thousands | 2017 | 2016 | |||||
Assets | |||||||
Cash and cash equivalents | $ | 43,520 | $ | 41,466 | |||
Accounts receivable | 39,411 | 46,469 | |||||
Inventories | 670,104 | 663,708 | |||||
Other current assets | 83,578 | 69,382 | |||||
Total current assets | 836,613 | 821,025 | |||||
Property and equipment | 362,304 | 321,231 | |||||
Goodwill and other intangibles | 364,488 | 366,186 | |||||
Other non-current assets | 34,108 | 70,216 | |||||
Total Assets | $ | 1,597,513 | $ | 1,578,658 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 242,729 | $ | 269,371 | |||
Current portion long-term debt | 2,051 | 10,620 | |||||
Other current liabilities | 106,252 | 127,714 | |||||
Total current liabilities | 351,032 | 407,705 | |||||
Long-term debt | 188,823 | 124,981 | |||||
Pension liability | 5,989 | 9,487 | |||||
Deferred rent and other long-term liabilities | 134,772 | 149,566 | |||||
Equity | 916,897 | 886,919 | |||||
Total Liabilities and Equity | $ | 1,597,513 | $ | 1,578,658 | |||
Exhibit 99.1
GENESCO INC. | ||||||||||||||||||||
Retail Units Operated - Six Months Ended July 29, 2017 | ||||||||||||||||||||
Balance | Balance | Balance | ||||||||||||||||||
1/30/2016 | Open | Close | 1/28/2017 | Open | Close | 7/29/2017 | ||||||||||||||
Journeys Group | 1,222 | 51 | 24 | 1,249 | 26 | 28 | 1,247 | |||||||||||||
Schuh Group | 125 | 7 | 4 | 128 | 3 | — | 131 | |||||||||||||
Lids Sports Group* | 1,332 | 15 | 107 | 1,240 | 9 | 61 | 1,188 | |||||||||||||
Johnston & Murphy Group | 173 | 8 | 4 | 177 | 2 | — | 179 | |||||||||||||
Total Retail Units | 2,852 | 81 | 139 | 2,794 | 40 | 89 | 2,745 | |||||||||||||
Retail Units Operated - Three Months Ended July 29, 2017 | ||||||||||||
Balance | Balance | |||||||||||
4/29/2017 | Open | Close | 7/29/2017 | |||||||||
Journeys Group | 1,250 | 13 | 16 | 1,247 | ||||||||
Schuh Group | 129 | 2 | — | 131 | ||||||||
Lids Sports Group* | 1,199 | 4 | 15 | 1,188 | ||||||||
Johnston & Murphy Group | 178 | 1 | — | 179 | ||||||||
Total Retail Units | 2,756 | 20 | 31 | 2,745 | ||||||||
*Includes 124 Locker Room by Lids in Macy's stores as of July 29, 2017.
Comparable Sales (including same store and comparable direct sales) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
July 29, | July 30, | July 29, | July 30, | ||||||||
2017 | 2016 | 2017 | 2016 | ||||||||
Journeys Group | 1 | % | (4 | )% | (2 | )% | (1 | )% | |||
Schuh Group | 3 | % | (1 | )% | 6 | % | (3 | )% | |||
Lids Sports Group | (2 | )% | — | % | (1 | )% | 1 | % | |||
Johnston & Murphy Group | (1 | )% | 3 | % | (2 | )% | 4 | % | |||
Total Comparable Sales | 0 | % | (1 | )% | 0 | % | 0 | % | |||
Exhibit 99.1
Schedule B
Genesco Inc. | ||||||||||||||||||
Adjustments to Reported Earnings (Loss) from Continuing Operations | ||||||||||||||||||
Three Months Ended July 29, 2017 and July 30, 2016 | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
July 29, 2017 | July 30, 2016 | |||||||||||||||||
Net of | Per Share | Net of | Per share | |||||||||||||||
In Thousands (except per share amounts) | Pretax | Tax | Amounts | Pretax | Tax | Amounts | ||||||||||||
Earnings (loss) from continuing operations, as reported | $ | (3,875 | ) | $ | (0.20 | ) | $ | 14,504 | $ | 0.72 | ||||||||
Pretax adjustments: | ||||||||||||||||||
Impairment charges | $ | 58 | 44 | — | $ | 1,018 | 665 | 0.03 | ||||||||||
Acquisition transition expenses | 288 | 199 | 0.01 | — | — | — | ||||||||||||
Sale of Lids Team Sports | — | — | — | (2,485 | ) | (1,602 | ) | (0.08 | ) | |||||||||
Network intrusion expenses | — | — | — | (8,963 | ) | (5,777 | ) | (0.29 | ) | |||||||||
Total adjustments | $ | 346 | 243 | 0.01 | $ | (10,430 | ) | (6,714 | ) | (0.34 | ) | |||||||
Tax impact for share-based awards | 2,167 | 0.11 | — | — | ||||||||||||||
Resolution of income tax matters | (520 | ) | (0.02 | ) | (872 | ) | (0.04 | ) | ||||||||||
Adjusted earnings (loss) from continuing operations (1) & (2) | $ | (1,985 | ) | $ | (0.10 | ) | $ | 6,918 | $ | 0.34 | ||||||||
(1) The adjusted tax rate for the second quarter of Fiscal 2018 is 32.9% excluding a FIN 48 discrete item of less than $0.1 million. The adjusted tax rate for the second quarter of Fiscal 2017 is 35.0% excluding a FIN 48 discrete item of $0.1 million.
(2) EPS reflects 19.2 and 20.2 million share count for Fiscal 2018 and 2017, which includes common stock equivalents in 2017, but not 2018 due to loss.
The Company believes that disclosure of earnings and earnings per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
Exhibit 99.1
Schedule B
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income (Loss) | |||||||||
Three Months Ended July 29, 2017 and July 30, 2016 | |||||||||
Three Months Ended July 29, 2017 | |||||||||
Operating | Adj Operating | ||||||||
In Thousands | Inc (Loss) | Other Adj | Inc (Loss) | ||||||
Journeys Group | $ | (2,194 | ) | $ | 288 | $ | (1,906 | ) | |
Schuh Group | 4,538 | — | 4,538 | ||||||
Lids Sports Group | 3,040 | — | 3,040 | ||||||
Johnston & Murphy Group | 1,547 | — | 1,547 | ||||||
Licensed Brands | (1,051 | ) | — | (1,051 | ) | ||||
Corporate and Other | (7,890 | ) | 58 | (7,832 | ) | ||||
Total Operating Income (Loss) | $ | (2,010 | ) | $ | 346 | $ | (1,664 | ) | |
Three Months Ended July 30, 2016 | |||||||||
Operating | Adj Operating | ||||||||
In Thousands | Income | Other Adj | Income | ||||||
Journeys Group | $ | 4,481 | $ | — | $ | 4,481 | |||
Schuh Group | 5,693 | — | 5,693 | ||||||
Lids Sports Group | 7,132 | — | 7,132 | ||||||
Johnston & Murphy Group | 2,255 | — | 2,255 | ||||||
Licensed Brands | 234 | — | 234 | ||||||
Corporate and Other | 225 | (7,945 | ) | (7,720 | ) | ||||
Total Operating Income | $ | 20,020 | $ | (7,945 | ) | $ | 12,075 | ||
Exhibit 99.1
Schedule B
Genesco Inc. | ||||||||||||||||||
Adjustments to Reported Earnings (Loss) from Continuing Operations | ||||||||||||||||||
Six Months Ended July 29, 2017 and July 30, 2016 | ||||||||||||||||||
Six Months Ended | ||||||||||||||||||
July 29, 2017 | July 30, 2016 | |||||||||||||||||
Net of | Per Share | Net of | Per share | |||||||||||||||
In Thousands (except per share amounts) | Pretax | Tax | Amounts | Pretax | Tax | Amounts | ||||||||||||
Earnings (loss) from continuing operations, as reported | $ | (2,878 | ) | $ | (0.15 | ) | $ | 25,068 | $ | 1.22 | ||||||||
Pretax adjustments: | ||||||||||||||||||
Impairment charges | $ | 177 | 122 | — | $ | 4,453 | 2,870 | 0.14 | ||||||||||
Acquisition transition expenses | 288 | 199 | 0.01 | — | — | — | ||||||||||||
Sale of Lids Team Sports | — | — | — | (2,485 | ) | (1,602 | ) | (0.08 | ) | |||||||||
Other legal matters | — | — | — | 90 | 57 | — | ||||||||||||
Network intrusion expenses | — | — | — | (8,931 | ) | (5,756 | ) | (0.28 | ) | |||||||||
Total adjustments | $ | 465 | 321 | 0.01 | $ | (6,873 | ) | (4,431 | ) | (0.22 | ) | |||||||
Tax impact for share-based awards | 2,167 | 0.11 | — | — | ||||||||||||||
Resolution of income tax matters | (496 | ) | (0.02 | ) | (766 | ) | (0.04 | ) | ||||||||||
Adjusted earnings (loss) from continuing operations (1) & (2) | $ | (886 | ) | $ | (0.05 | ) | $ | 19,871 | $ | 0.96 | ||||||||
(1) The adjusted tax rate for the first six months of Fiscal 2018 is 31.1% excluding a FIN 48 discrete item of $0.1 million. The adjusted tax rate for the first six months of Fiscal 2017 is 35.6% excluding a FIN 48 discrete item of $0.2 million.
(2) EPS reflects 19.2 and 20.6 million share count for Fiscal 2018 and 2017, which includes common stock equivalents in 2017, but not 218 due to loss.
The Company believes that disclosure of earnings and earnings per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.
Exhibit 99.1
Schedule B
Genesco Inc. | |||||||||
Adjustments to Reported Operating Income | |||||||||
Six Months Ended July 29, 2017 and July 30, 2016 | |||||||||
Six Months Ended July 29, 2017 | |||||||||
Operating | Adj Operating | ||||||||
In Thousands | Income | Other Adj | Income | ||||||
Journeys Group | $ | 5,278 | $ | 288 | $ | 5,566 | |||
Schuh Group | 3,851 | — | 3,851 | ||||||
Lids Sports Group | 1,254 | — | 1,254 | ||||||
Johnston & Murphy Group | 5,367 | — | 5,367 | ||||||
Licensed Brands | 1,224 | — | 1,224 | ||||||
Corporate and Other | (16,190 | ) | 177 | (16,013 | ) | ||||
Total Operating Income | $ | 784 | $ | 465 | $ | 1,249 | |||
Six Months Ended July 30, 2016 | |||||||||
Operating | Adj Operating | ||||||||
In Thousands | Income | Other Adj | Income | ||||||
Journeys Group | $ | 24,101 | $ | — | $ | 24,101 | |||
Schuh Group | 3,032 | — | 3,032 | ||||||
Lids Sports Group | 13,169 | — | 13,169 | ||||||
Johnston & Murphy Group | 7,097 | — | 7,097 | ||||||
Licensed Brands | 2,087 | — | 2,087 | ||||||
Corporate and Other | (11,569 | ) | (4,388 | ) | (15,957 | ) | |||
Total Operating Income | $ | 37,917 | $ | (4,388 | ) | $ | 33,529 | ||
Exhibit 99.1
Schedule B
Genesco Inc. | ||||||||||||
Adjustments to Forecasted Earnings from Continuing Operations | ||||||||||||
Fiscal Year Ending February 3, 2018 | ||||||||||||
In Thousands (except per share amounts) | High Guidance | Low Guidance | ||||||||||
Fiscal 2018 | Fiscal 2018 | |||||||||||
Forecasted earnings from continuing operations | $ | 65,152 | $ | 3.38 | $ | 58,629 | $ | 3.04 | ||||
Adjustments: (1) | ||||||||||||
Asset impairment and other charges | 3,061 | 0.16 | 3,774 | 0.20 | ||||||||
Tax impact for share-based awards | 2,167 | 0.11 | 2,167 | 0.11 | ||||||||
Adjusted forecasted earnings from continuing operations (2) | $ | 70,380 | $ | 3.65 | $ | 64,570 | $ | 3.35 | ||||
(1) All adjustments are net of tax where applicable. The forecasted tax rate for Fiscal 2018 is approximately 35.2%.
(2) EPS reflects 19.3 million share count for Fiscal 2018 which includes common stock equivalents.
This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.