Genesco cuts outlook

Changing footwear trends took a bite out of Genesco Inc.’s sales in the second quarter.



The company reported net income of $14.6 million, up from a year-earlier profit of $7.5 million.



Genesco’s revenue for the second quarter, ended on July 30, fell 4.6% to a less-than-expected $625.6 million.



Total same-store sales fell 1%, with a 4% decline at the Journeys Group.



“We experienced a sudden shift away from many of the core styles that have fueled Journeys' strong performances in recent years,” said Robert Dennis, CEO of Genesco, which operates more than 2,800 l stores and leased departments throughout the U.S., Canada and Europe under assorted banners, including Journeys, Schuh, Lids, and Johnston & Murphy. “We were able to offset the effect this headwind had on our bottom line through a meaningful improvement in Lids Sports Group and continued strength at Johnston & Murphy combined with share repurchases over the past year."



Dennis sounded a warning note about the third quarter, saying it was off to a difficult start driven largely by the impact of the fashion shift at Journeys during the height of the back to school season. The company’s same-store sales for the third quarter through Saturday, August 27, 2016, are down 5% from the same period last year.



"Based on our comparable sales trend and expectations for sustained challenges due to the fashion rotation at Journeys and conditions at Schuh (its U.K. brand), we are lowering our full year outlook,” he said. “We now expect adjusted diluted earnings per share for the fiscal year ending January 28, 2017, in the range of $3.80 to $4.00, compared to our previously issued guidance range of $4.80 to $4.90."