Genesco Reports Fourth Quarter, Fiscal 2012 Results
-- Fourth Quarter Comparable Store Sales Increased 12% --

NASHVILLE, Tenn., March 2, 2012 /PRNewswire/ -- Genesco Inc. (NYSE: GCO) today reported earnings from continuing operations for the fourth quarter ended January 28, 2012, of $41.5 million, or $1.72 per diluted share, compared to earnings from continuing operations of $31.4 million, or $1.34 per diluted share, for the fourth quarter ended January 29, 2011. Fiscal 2012 fourth quarter results reflect pretax items of $3.7 million, or $0.25 per diluted share after tax, including compensation expense related to deferred purchase price payments in connection with the acquisition of Schuh Group Limited in June 2011 and other legal matters, and an effective tax rate reflecting the non-deductibility of the compensation expense related to the deferred purchase price.  As previously announced, because the obligation to pay the deferred purchase price for Schuh is contingent upon the continued employment of the payees, U.S. Generally Accepted Accounting Principles require that it be treated as compensation expense.  For tax purposes, however, the obligation is treated as purchase price, and is therefore not deductible.  Fiscal 2011 fourth quarter results were favorably affected by $0.08 per share due to a lower tax rate offset by pretax items totaling $2.8 million, or $0.07 per diluted share after tax, primarily related to network intrusion expenses, asset impairments and purchase price accounting adjustments.

Adjusted for the items described above in both periods, earnings from continuing operations were $47.5 million, or $1.97 per diluted share, for the fourth quarter of Fiscal 2012, compared to earnings from continuing operations of $31.3 million, or $1.33 per diluted share, for the fourth quarter of Fiscal 2011.   For consistency with Fiscal 2012'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. Additionally, the Company believes that the presentation of earnings from continuing operations before the compensation expense associated with the Schuh deferred purchase price will enable investors to understand the effect attributable to incorporating a continuing employment condition into the obligation to pay deferred purchase price.  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 fourth quarter of Fiscal 2012 increased 29% to $723 million from $560 million in the fourth quarter of Fiscal 2011.  Comparable store sales in the fourth quarter of Fiscal 2012 increased by 12%.  The Lids Sports Group's comparable store sales increased by 13%, the Journeys Group increased by 14%, Johnston & Murphy Retail increased by 8%, and Underground Station decreased by 4%.

Robert J. Dennis, chairman, president and chief executive officer of Genesco, said, "We finished Fiscal 2012 with an excellent fourth quarter, led by strong performances from our two largest businesses, Journeys Group and Lids Sports Group. In addition, Schuh and Johnston & Murphy also contributed meaningfully to our results. Our merchandise strategies continued to drive strong full price selling in our stores and on our websites, helping push adjusted fourth quarter operating margin above 10% for the first time in five years.

"Fiscal 2013 has started well, with February consolidated comparable store sales up 13%. While we expect these trends to moderate, we continue to look for positive comparable store sales on top of the challenging quarterly comparisons ahead of us."

Dennis also discussed the Company's updated outlook.  "Based on current visibility we expect adjusted Fiscal 2013 diluted earnings per share to be in the range of $4.58 to $4.70, which represents a 12% to 15% increase over last year's adjusted earnings per share of $4.09. Consistent with previous guidance, these expectations do not include expected non-cash asset impairments and other charges, which are estimated in the range of $1.4 million to $2.5 million pretax, or $0.04 to $0.06 per share, after tax, in Fiscal 2013. They also do not reflect compensation expense associated with the Schuh deferred purchase price as described above, which are currently estimated at approximately $12.0 million, or $0.49 per diluted share, for the full year. This guidance assumes comparable sales of 2% to 3% for the full fiscal 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.

Fiscal Year 2012
The Company also reported earnings from continuing operations for the fiscal year ended January 28, 2012, of $83.0 million, or $3.48 per diluted share, compared to earnings from continuing operations of $54.5 million, or $2.29 per diluted share, for the fiscal year ended January 29, 2011. Fiscal 2012 earnings reflected after-tax charges of $0.61 per diluted share, including compensation expense associated with the Schuh deferred purchase price, acquisition expenses, asset impairments, other legal matters and network intrusion-related expenses.  Fiscal 2011 earnings reflected after-tax charges of $0.19 per diluted share, including asset impairments, purchase price accounting adjustments, network intrusion-related expenses, flood loss and other legal matters, partially offset by a lower effective tax rate.

Adjusted for the listed items in both years, earnings from continuing operations were $97.5 million, or $4.09 per diluted share, for Fiscal 2012, compared to earnings from continuing operations of $59.0 million, or $2.48 per diluted share, for Fiscal 2011.  For consistency with previously announced earnings expectations, which did not reflect the listed items, the Company believes that disclosure of earnings from continuing operations adjusted for those items will be useful to investors. A reconciliation of the adjusted financial measures to their corresponding measures as reported pursuant to U.S. Generally Accepted Accounting Principles is included in Schedule B to this press release. Net sales for Fiscal 2012 increased 28% to $2.29 billion from $1.79 billion in Fiscal 2011.

Dennis concluded, "We are entering the new fiscal year from a position of strength. With a diversified portfolio of businesses that generate significant cash flow, we are well situated to take advantage of the profitable growth opportunities ahead of us. We believe our recent operating performance confirms we are on the right strategic course to achieve our goals of $3.1 billion in sales and operating margins of 9% by Fiscal 2016."

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 March 2, 2012 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, earnings and operating margins), 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 reflected in forward-looking statements, including the amount of required accruals related to the earn-out bonus potentially payable to Schuh management in four years based on the achievement of certain performance objectives; the costs of responding to and liability in connection with the network intrusion announced in December 2010; the timing and amount of non-cash asset impairments; weakness in the consumer economy; competition in the Company's markets; inability of customers to obtain credit; fashion trends that affect the sales or product margins of the Company's retail product offerings; changes in buying patterns by significant wholesale customers; bankruptcies or deterioration in financial condition of significant wholesale customers; disruptions in product supply or distribution; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; the Company's ability to continue to complete and integrate acquisitions, expand its business and diversify its product base; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. 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 maintain reductions in occupancy costs achieved in recent lease negotiations, 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; and the 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 2,380 retail stores throughout the U.S., Canada and the United Kingdom, principally under the names Journeys, Journeys Kidz, Shi by Journeys, Schuh, Lids, Lids Locker Room, Johnston & Murphy, and Underground Station, and on internet websites www.journeys.com, www.journeyskidz.com, www.shibyjourneys.com, www.undergroundstation.com, www.schuh.co.uk, www.johnstonmurphy.com, www.dockersshoes.com,  www.lids.com,  www.lids.ca, www.lidslockerroom.com , www.keukafootwear.com and www.lidsteamsports.com.  The Company's Lids Sports Group division operates the Lids headwear stores and the lids.com website, the Lids Locker Room and other team sports fan shops and single team clubhouse stores, and the Lids Team Sports team dealer business.   In addition, Genesco sells wholesale footwear under its Johnston & Murphy brand, the licensed Dockers brand, Keuka, and other brands. For more information on Genesco and its operating divisions, please visit www.genesco.com.

GENESCO INC.













Consolidated Earnings Summary















Fourth Quarter




Fiscal Year Ended





January 28,  


January 29,  


January 28,  


January 29,  


In Thousands



2012


2011


2012


2011


Net sales



$      723,369


$        560,494


$   2,291,987


$           1,789,839


Cost of sales



366,298


287,503


1,137,938


887,992


Selling and administrative expenses


285,548


222,713


1,007,502


807,197


Restructuring and other, net


741


2,003


2,677


8,567


Earnings from operations*


70,782


48,275


143,870


86,083


Interest expense, net



1,628


354


5,092


1,122


Earnings from continuing operations










   before income taxes


69,154


47,921


138,778


84,961


Income tax expense



27,656


16,508


55,794


30,414


Earnings from continuing operations


41,498


31,413


82,984


54,547













Provision for discontinued operations


(28)


(552)


(1,025)


(1,336)


Net  Earnings



$        41,470


$          30,861


$        81,959


$                53,211












*Includes $3.0 million and $13.9 million, respectively, of acquisition related expenses for  the three months

 and fiscal year ended January 28, 2012.  













Earnings Per Share Information







Fourth Quarter




Fiscal Year Ended





January 28,  


January 29,  


January 28,  


January 29,  


In Thousands (except per share amounts)     


2012


2011


2012


2011


Preferred dividend requirements


$46


$49


$193


$197













Average common shares - Basic EPS


23,462


22,825


23,234


23,209













Basic earnings per share:










   Before discontinued operations

$1.77


$1.37


$3.56


$2.34


   Net earnings



$1.77


$1.35


$3.52


$2.28













Average common and common









   equivalent shares - Diluted EPS

24,095


23,500


23,848


23,716













Diluted earnings per share:










   Before discontinued operations

$1.72


$1.34


$3.48


$2.29


   Net earnings



$1.72


$1.31


$3.43


$2.24












GENESCO INC.













Consolidated Earnings Summary







Fourth Quarter




Fiscal Year Ended





January 28,  


January 29,  


January 28,  


January 29,  


In Thousands



2012


2011*


2012


2011*


Sales:











   Journeys Group



$      290,308


$        253,315


$      927,743


$              804,149


   Underground Station Group


26,440


29,405


92,373


94,351


   Schuh Group



100,077


-


212,262


-


   Lids Sports Group



226,578


198,072


759,324


603,345


   Johnston & Murphy Group


59,957


56,010


201,725


185,011


   Licensed Brands



19,717


23,325


97,444


101,644


   Corporate and Other


292


367


1,116


1,339


   Net Sales



$      723,369


$        560,494


$   2,291,987


$           1,789,839


Operating Income (Loss):










   Journeys Group



$        39,071


$          27,877


$        82,785


$                52,639


   Underground Station Group


1,560


1,341


(333)


(2,997)


   Schuh Group(1)



7,371


-


11,711


-


   Lids Sports Group



31,347


22,883


82,349


56,026


   Johnston & Murphy Group


5,653


4,149


13,682


7,595


   Licensed Brands



1,458


2,247


9,456


12,359


   Corporate and Other(2)


(15,678)


(10,222)


(55,780)


(39,539)


  Earnings from operations


70,782


48,275


143,870


86,083













  Interest, net



1,628


354


5,092


1,122













Earnings from continuing operations


    before income taxes


69,154


47,921


138,778


84,961













Income tax expense



27,656


16,508


55,794


30,414


Earnings from continuing operations


41,498


31,413


82,984


54,547













Provision for discontinued operations


(28)


(552)


(1,025)


(1,336)


Net Earnings



$        41,470


$          30,861


$        81,959


$                53,211












*Certain expenses previously allocated to corporate in Fiscal 2011 have been reallocated to operating divisions to conform to current year presentation.  Fiscal 2011 has been restated to reflect this new allocation.


(1) Includes $2.9 million and $7.2 million, respectively, in deferred payments related to the Schuh acquisition for the three months and fiscal year ended January 28, 2012.


(2) Includes a $0.8 million charge in the fourth quarter of Fiscal 2012 which includes $0.6 million in other legal matters and $0.2 million for network intrusion expenses and includes $2.7 million of other charges in Fiscal 2012 which includes $1.1 million for asset impairments, $0.7 million for network intrusion expenses and $0.9 million for other legal matters. The fourth quarter and year of Fiscal 2012 also included $0.1 million and $6.7 million, respectively, of acquisition related expenses.  Includes a $2.0 million charge in the fourth quarter of Fiscal 2011, which includes $1.3 million for intrusion expenses, and $0.8 million in asset impairments offset slightly by $0.1 million in other legal matters. Includes $8.6 million of other charges in Fiscal 2011 which includes $7.2 million in asset impairments, $1.3 million for intrusion expenses and $0.1 million in other legal matters.


GENESCO INC.
























Consolidated Balance Sheet

















January 28,


January 29,


In Thousands







2012


2011


Assets











Cash and cash equivalents






$        53,790


$                55,934


Accounts receivable







43,713


44,512


Inventories







435,113


359,736


Other current assets







75,001


52,873


Total current assets







607,617


513,055


Property and equipment






227,717


198,691


Other non-current assets






403,976


249,336


Total Assets







$   1,239,310


$              961,082


Liabilities and Equity










Accounts payable







$      138,938


$              117,001


Current portion long-term debt






8,773


-


Other current liabilities







180,679


117,362


Total current liabilities







328,390


234,363


Long-term debt







31,931


-


Other long-term liabilities






161,379


99,898


Equity







717,610


626,821


Total Liabilities and Equity






$   1,239,310


$              961,082





GENESCO INC.










































Retail Units Operated - Twelve Months Ended January 28, 2012





Balance




Acquisi-




Balance



Acquisi-



Balance





01/31/10


Open


tions


Close


01/29/11


Open

tions

Close


01/28/12



Journeys Group


1,025


9


0


17


1,017


18

0

18


1,017



   Journeys


819


6


0


12


813


14

0

15


812



   Journeys Kidz


150


3


0


4


149


4

0

1


152



   Shi by Journeys


56


0


0


1


55


0

0

2


53



Underground Station Group      

170


0


0


19


151


0

0

14


137



Schuh Group


0


0


0


0


0


6

75

3


78



    Schuh UK


0


0


0


0


0


6

51

1


56



    Schuh ROI


0


0


0


0


0


0

8

0


8



    Schuh Concessions

0


0


0


0


0


0

16

2


14



Lids Sports Group


921


41


58


35


985


40

10

33


1,002



Johnston & Murphy Group

160


3


0


7


156


6

0

9


153



   Shops


116


2


0


7


111


1

0

9


103



   Factory Outlets


44


1


0


0


45


5

0

0


50



Total Retail Units


2,276


53


58


78


2,309


70

85

77


2,387








































Retail Units Operated - Three Months Ended January 28, 2012

















Balance




Acquisi-




Balance











10/29/11


Open


tions


Close


01/28/12









Journeys Group


1,017


4


0


4


1,017









   Journeys


811


4


0


3


812









   Journeys Kidz


153


0


0


1


152









   Shi by Journeys


53


0


0


0


53









Underground Station Group 

139


0


0


2


137









Schuh Group


75


4


0


1


78









    Schuh UK


52


4


0


0


56









    Schuh ROI


8


0


0


0


8









    Schuh Concessions 

15


0


0


1


14









Lids Sports Group


1,000


9


0


7


1,002









Johnston & Murphy Group 

156


1


0


4


153









   Shops


106


1


0


4


103









   Factory Outlets


50


0


0


0


50









Total Retail Units


2,387


18


0


18


2,387















































Comparable Store Sales























Three Months Ended




Twelve Months Ended













January 28,


January 29,


January 28,


January 29,













2012


2011


2012


2011











Journeys Group


14%


12%


15%


7%











Underground Station Group 

-4%


-4%


6%


-1%











Lids Sports Group


13%


6%


12%


9%











Johnston & Murphy Group 

8%


12%


10%


8%











Total Comparable Store Sales


12%


9%


13%


7%











Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Three Months Ended January 28, 2012 and January 29, 2011









3 mos

Impact

3 mos

Impact

In Thousands (except per share amounts)


Jan 2012

on EPS

Jan 2011

on EPS

Earnings from continuing operations, as reported


$         41,498

$       1.72

$           31,413

$       1.34







Adjustments:  (1)






Impairment charges


32

-

487

0.02

Acquisition expenses


142

0.01

-

-

Deferred payment - Schuh acquisition


2,917

0.12

-

-

Other legal matters


387

0.02

(39)

-

Purchase price accounting adjustment - margin


-

-

476

0.02

Purchase price accounting adjustment - expense


-

-

-

-

Network intrusion expenses


86

-

816

0.03

Higher (lower) effective tax rate


2,391

0.10

(1,863)

(0.08)







Adjusted earnings from continuing operations (2)


$         47,453

$       1.97

$           31,290

$       1.33













(1) All adjustments are net of tax where applicable.  The tax rate for the fourth quarter of Fiscal 2012 is 34.8%

   excluding a FIN 48 discrete item of $0.1 million.  The tax rate for the fourth quarter of Fiscal 2011 is 38.0%

   excluding a FIN 48 discrete item of $0.1 million.







(2) Reflects 24.1 million share count for Fiscal 2012 and 23.5 million share count for Fiscal 2011 which includes

    common stock equivalents in both years.







The Company believes that disclosure of earnings and earnings per share from continuing operations on a

pro forma basis 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.



Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Twelve Months Ended January 28, 2012 and January 29, 2011









12 mos

Impact

12 mos

Impact

In Thousands (except per share amounts)


Jan 2012

on EPS

Jan 2011

on EPS

Earnings from continuing operations, as reported


$         82,984

$       3.48

$           54,547

$         2.29







Adjustments:  (1)






Impairment charges


706

0.03

4,410

0.19

Acquisition expenses


5,770

0.24

-

-

Deferred payment - Schuh acquisition


7,218

0.30

-

-

Other legal matters


567

0.02

56

-

Flood loss


-

-

215

0.01

Purchase price accounting adjustment - margin


-

-

1,242

0.05

Purchase price accounting adjustment - expense


-

-

266

0.01

Expenses related to aborted acquisition


-

-

127

0.01

Network intrusion expenses


415

0.02

816

0.03

Lower effective tax rate


(160)

-

(2,639)

(0.11)







Adjusted earnings from continuing operations (2)


$         97,500

$       4.09

$           59,040

$         2.48














(1) All adjustments are net of tax where applicable.  The tax rate for Fiscal 2012 is 36.95% excluding a FIN 48 discrete


    item of $0.4 million.  The tax rate for Fiscal 2011 is 38.4% excluding a FIN 48 discrete item of $0.5 million.



(2) Reflects 23.8 million share count for Fiscal 2012 and 23.7 million share count for Fiscal 2011 which includes


    common stock equivalents in both years.







The Company believes that disclosure of earnings and earnings per share from continuing operations on a


pro forma basis 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.



Genesco Inc.

Adjustments to Forecasted Earnings from Continuing Operations

Fiscal Year Ending February 2, 2013







In Thousands (except per share amounts)


High Guidance

Low Guidance



Fiscal 2013

Fiscal 2013

Forecasted earnings from continuing operations


$        100,337

$           4.15

$       97,303

$           4.03







Adjustments:  (1)






Impairment


1,466

0.06

1,466

0.06

Deferred payment - Schuh acquisition


11,778

0.49

11,778

0.49







Adjusted forecasted earnings from continuing operations (2)


$        113,581

$           4.70

$     110,547

$           4.58







(1) All adjustments are net of tax where applicable.  The forecasted tax rate for Fiscal 2013 is 37% excluding a FIN 48


    discrete item of $0.5 million.












(2) Reflects 24.3 million share count for Fiscal 2013 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.  








SOURCE Genesco Inc.

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