Shares of Genesco were up 1.2% in Friday’s extended trading after the stock closed 4.4% higher on Dec. 4, following better-than-expected 3Q results. The specialty retailer’s 3Q EPS of $0.85 declined 36.1% year-over-year but topped analysts’ estimates for a loss of $0.14 per share. Revenue declined 11% to $479 million but came ahead of the consensus estimates of $457.2 million.
Genesco’s (GCO) CEO Mimi E. Vaughn said that 3Q revenues improved compared with the 2Q results, “as more stores were open and digital sales remained robust.” Vaughn further added that the company’s earnings improved sequentially due to “the decisive cost cutting actions we took early in the outbreak and one-time expense relief benefits, combined with better gross margins, solid profitability in our e-commerce channel and a lower tax rate.”
Genesco’s consolidated comps increased 4% in the quarter, highlighted by robust e-commerce comp growth of 62%, the company said. (See GCO stock analysis on TipRanks)
Looking ahead, Vaughn stated, “consumer demand has been very different this year due to the pandemic, which has caused us to take a conservative approach to our outlook.” During the earnings call, Dave Slater, the vice president of financial planning and analysis, said, “we would expect Q4 sales to decline just a little bit more than we saw in Q3.”
Following the results, Susquehanna analyst Sam Poser raised the stock’s price target to $41 (27.7% upside potential) from $33 and maintained a Buy rating. Poser said, “The multiple increase is warranted, as we are confident that the improvements in consumer engagement, strong merchandise mix at Journeys, and improving digital trends at SCHUH and Journeys will continue to drive strong results.”
Meanwhile, the Street has a bullish outlook on the stock with a Strong Buy analyst consensus backed by 3 unanimous Buy ratings. The average price target stands at $39.33 and implies upside potential of about 22.5% to current levels. Shares have declined 33% year-to-date.
Related News:
Kroger Drops 4% As 3Q Sales Lag Estimates, Oppenheimer Remains Sidelined
DocuSign 3Q Sales Soar 53%; Street Sees 12% Upside
Marvell’s 3Q Earnings Meet Estimates; Shares Slip 6% On Supply-Chain Constraint
