Genesco(US:GCO)2020-03-12 19:54Financial Data and Key Metrics Changes - For fiscal year 2020, adjusted EPS increased by 40% to $4.58, exceeding guidance of $4.10 to $4.40, driven by stronger-than-expected results at Schuh and lower-than-planned expenses [10][12][23] - Consolidated revenue for Q4 was slightly above last year's level, with consolidated comps at 1%, driven by direct comps of 19% and store comps that decreased by 2% [24][25] - Adjusted operating income improved by 9%, increasing from $91 million to $99 million [23] Business Line Data and Key Metrics Changes - Journeys posted a positive comp increase in Q4, with strong full-price selling and record digital sales growth, despite negative store comps [15][16] - Schuh exceeded expectations with low-single-digit comp increases for the second consecutive quarter, benefiting from omni-channel capabilities [17][18] - Johnston & Murphy experienced negative comps but showed sequential improvement, focusing on product innovation to drive future growth [19][26] Market Data and Key Metrics Changes - Store traffic in North America slowed post-holiday, particularly affecting Journeys, while Schuh saw robust post-holiday sales driven by clearance activity [20] - The company noted a decline in store traffic at tourist locations, particularly in the U.K. and North America, due to the impact of COVID-19 [21][64] Company Strategy and Development Direction - The company aims to accelerate digital and omni-channel potential while growing its branded side, with a five-year plan forecasting average annual growth of 3% to 4% [43][44] - Key strategic pillars include building consumer insights, intensifying product innovation, and pursuing synergistic acquisitions [45][56] - The acquisition of Togast and securing the Levi's footwear license are seen as significant growth opportunities [57] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for fiscal 2021, projecting adjusted EPS between $4.90 and $5.40, with expectations for a stronger second half of the year [22][35] - The impact of COVID-19 on consumer demand is being closely monitored, with management noting potential pent-up demand once the situation stabilizes [65][75] Other Important Information - The company successfully eliminated $9 million in stranded costs related to the Lids divestiture, contributing to improved financial performance [28][29] - Capital expenditures for the year totaled $30 million, with plans for increased spending in fiscal 2021 [33][40] Q&A Session Summary Question: Impact of COVID-19 on airport and tourist stores - Management acknowledged a decline in traffic at tourist locations, particularly in major cities and airports, and noted that the majority of stores are in non-tourist locations [64][66] Question: Guidance for Journeys in Q1 - Management indicated that softness in boot sales and weather conditions contributed to the guidance of down 7% to down 3% for Journeys [67][68] Question: Contingency planning amid low visibility - Management emphasized careful expense management and the importance of experienced teams to navigate through challenging times [73][75] Question: Broader slowdown outside airport and tourist locations - Management confirmed that no additional slowdown was built into the guidance beyond current business trends [76]