Although e-commerce sales decreased 5 per cent in FY23 compared to the previous year, they were up 67 per cent compared to pre-pandemic levels in FY20. Furthermore, Genesco’s comparable direct sales were flat in FY23 compared to a 2 per cent decrease in FY22, the company said in a press release.
Genesco reported a 2 per cent decline in net sales in FY23, primarily driven by foreign exchange pressure in the Schuh business and a decrease in e-commerce sales. However, sales were up 9 per cent compared to FY20. The company expects sales to be flat to up 2 per cent in FY24 and adjusted diluted earnings per share to be in the range of $5.10 to $5.90.
Genesco’s overall sales for fiscal 2023 compared to fiscal 2022 increased 2 per cent at Schuh and 24 per cent at Johnston & Murphy, partially offset by a decrease of 6 per cent at Journeys and a decrease of 8 per cent at Genesco Brands Group. On a constant currency basis, Schuh sales were up 15 per cent for FY23.
The company’s gross margin for FY23 was 47.6 per cent, down 120 basis points compared with 48.8 per cent in FY22 and down 80 basis points compared with FY20 at 48.4 per cent.
Genesco’s GAAP operating income for FY23 was $93.2 million, or 3.9 per cent of sales, compared to $155.6 million, or 6.4 per cent of sales the previous year and $83.3 million, or 3.8 per cent of sales for FY20. Adjusted for the excluded items in all periods, operating income was $96.8 million this year compared to $151.5 million last year and operating income of $99.2 million in FY20. Adjusted operating margin was 4.1 per cent of sales in FY23 and 6.3 per cent of sales the previous year and 4.5 per cent in FY20.
In the fourth quarter (Q4) of FY23, Genesco reported net sales of $725 million, which was essentially flat compared to the previous year and increased 7 per cent over Q4FY20. The company’s e-commerce sales were up 15 per cent compared to Q4FY22 and up 57 per cent compared to Q4FY20. E-commerce sales represented 25 per cent of retail sales compared to 22 per cent the previous year and increased from 17 per cent of retail sales in Q4FY20. Genesco’s GAAP EPS from continuing operations was $3.23, while non-GAAP EPS from continuing operations was $3.06.
For FY24, Genesco expects sales to be flat to up 2 per cent, or down 1 per cent to up 1 per cent excluding the 53rd week this year, compared to FY23. The company expects adjusted diluted earnings per share from continuing operations to be in the range of $5.10 to $5.90, with an expectation that earnings per share for the year will be near the midpoint of the range, the release added.
“I am encouraged by the top-line momentum we gained through fiscal 2023 even as headwinds strengthened, culminating in a 5 per cent increase in fourth quarter total comparable sales. Fiscal 2024 has started slowly as we lap a strong prior year period that was marked by higher levels of consumer discretionary spending, and higher retailer order books. With some additional pressure expected on sales this year, especially in the first half, we are balancing our focus on investing for the future and driving down costs as we expect some of the recent cost pressures to persist in the near-term. We believe we are taking the necessary steps to best serve our customers and our shareholders in this turbulent market,” said Thomas A George, Genesco chief financial officer.
Fibre2Fashion News Desk (DP)