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GENESCO EXPECTS LOWER FISCAL 1994 EARNINGS

 NASHVILLE, Tenn., Oct. 6 /PRNewswire/ -- GENESCO Inc. (NYSE: GCO) today announced it expects a profit for the fiscal year ending Jan. 31, 1994, but at a level substantially below the year- earlier total. In fiscal 1993, the company reported earnings of $9.7 million, or $.40 per share, before an extraordinary loss of $583,000, or $.02 per share, from the early retirement of debt.
 "Based on the trends in our business through the first fiscal half, we had anticipated an improved performance for fiscal 1994 as a whole. Results to date for the third quarter, however, have not met our expectations, causing us to revise the outlook for the full year," E. Douglas Grindstaff, GENESCO president and chief executive officer, said.
 "Although there is a full month remaining in the current quarter, we expect to operate essentially at no profit for the period compared with the year-earlier net income of $4.9 million, or $.21 per share," he said.
 GENESCO said the key factor affecting its operating performance is the "sluggishness which persists in overall retail spending."
 "We also will incur substantial non-recurring costs for the quarter related to the labor difficulties experienced at The Greif Companies in negotiating the new collective bargaining agreement reached last week," Grindstaff said.
 "Compared with a year ago, there appears to be considerably more uncertainty among consumers which is having an effect on both our retailing and wholesale activities," Grindstaff said.
 "During September there were indications of some improvement in demand, but no sustained pattern has yet developed. We are benefiting from the contribution of several new acquired brands and expect to report higher sales for the third quarter as a whole compared with the $146.1 million a year ago.
 "The incremental sales, however, are not proving sufficient to offset the higher marketing expenses from these brands. Margins are further being adversely affected by the interest expenses we are incurring this year."
 GENESCO said the level of shipments for the various footwear and apparel brands are "generally below earlier expectations."
 "We had planned a particularly strong gain in boots for fiscal 1994 because of the strong demand for this product category during the second half of fiscal 1993," Grindstaff said. "We expect higher sales of boots for the year as a whole, but the noticeable shift in fashion away from western wear has dampened the success of this rapidly growing business. Accordingly, we have taken steps to reduce manufacturing levels and inventories throughout wholesale operations as well as to lower advertising and marketing expenses."
 GENESCO expects earnings in the fourth fiscal quarter to offset any loss through the first nine months, resulting in a profit for GENESCO for fiscal 1994 as a whole.
 "The magnitude of our profitability, however, will depend importantly on the retail environment over the balance of the year," Grindstaff said. "The inconsistency in consumer sentiment this year has had a particularly significant impact on profitability because of the higher costs that were planned in support of several new footwear lines. We remain firm in our commitment to invest in the opportunities for building further on the strong brand ownership we have in both footwear and apparel."
 GENESCO, headquartered in Nashville, is a consumer products company with operations in footwear and men's tailored clothing.
 -0- 10/6/93
 /CONTACT: (Media) Teresa Miller Mangelsdorf, 615-367-8281, or (Financial) James S. Gulmi, 615-367-8325, both of GENESCO/
 (GCO)


CO; GENESCO Inc. ST: Tennessee IN: TEX SU: ERN

CM -- CH001 -- 9189 10/06/93 08:36 EDT
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Publication:PR Newswire
Date:Oct 6, 1993
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