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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Quarter Ended
July 30, 2022
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from to
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Commission File No.
1-3083
Genesco Inc.
(Exact name of registrant as specified in its charter)
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Tennessee
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62-0211340
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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535 Marriott Drive
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37214
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Nashville,
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Tennessee
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(Zip Code)
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(Address of principal executive offices)
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Registrant's telephone number, including area code:
(615)
367-7000
Securities registered pursuant to Section 12(b) of the
Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Common Stock, $1.00 par value
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GCO
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New York Stock Exchange
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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such report), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☒
No
☐
Indicate by check mark whether the registrant has submitted
electronically every Interactive Data File required to be submitted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large
accelerated filer; an accelerated filer; a non-accelerated filer; a
smaller reporting company; or an emerging growth company. See
definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company” and “emerging growth company” in Rule
12b-2 of the Exchange Act:
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act) Yes
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No
☒
As of August 26, 2022, there were
13,069,101
shares of the registrant's common stock outstanding.
INDEX
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Part I. Financial Information
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Item 1. Financial Statements:
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Condensed Consolidated Balance Sheets - July 30, 2022, January 29,
2022 and July 31, 2021
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4
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Condensed Consolidated Statements of Operations - Three and Six
Months ended July 30, 2022 and July 31, 2021
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5
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Condensed Consolidated Statements of Comprehensive Income - Three
and Six Months ended July 30, 2022 and July 31, 2021
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6
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Condensed Consolidated Statements of Cash Flows - Six Months ended
July 30, 2022 and July 31, 2021
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7
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Condensed Consolidated Statements of Equity - Three and Six Months
ended July 30, 2022 and July 31, 2021
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8
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Notes to Condensed Consolidated Financial Statements
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9
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
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16
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Item 3. Quantitative and Qualitative Disclosures about Market
Risk
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24
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Item 4. Controls and Procedures
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24
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Part II. Other Information
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25
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Item 1. Legal Proceedings
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25
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Item 1A. Risk Factors
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25
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Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds
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25
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Item 6. Exhibits
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26
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Signature
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27
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2
cautionary notice regarding forward-looking statements
Statements in this Quarterly Report on Form 10-Q include certain
forward-looking statements, which include statements regarding our
intent, belief or expectations and all statements other than those
made solely with respect to historical fact. Actual results could
differ materially from those reflected by the forward-looking
statements in this Quarterly Report on Form 10-Q and a number of
factors may adversely affect the forward-looking statements and our
future results, liquidity, capital resources or prospects. These
include, but are not limited to, risks related to public health and
safety issues, including, for example, risks related to the ongoing
novel coronavirus ("COVID-19") pandemic; disruptions to our
business, sales, supply chain and financial results; the level of
consumer spending on our merchandise and interest in our brands and
in general, the level and timing of promotional activity necessary
to maintain inventories at appropriate levels; our ability to pass
on price increases to our customers; the timing and amount of any
share repurchases by us; risks related to doing business
internationally, including the manufacturing of a portion of our
products in China; the imposition of tariffs on products imported
by us or our vendors as well as the ability and costs to move
production of products in response to tariffs; our ability to
obtain from suppliers products that are in-demand on a timely basis
and effectively manage disruptions in product supply or
distribution; unfavorable trends in fuel costs, foreign exchange
rates, foreign labor and material costs; a disruption in shipping
or increase in cost of our imported products, and other factors
affecting the cost of products; our dependence on third-party
vendors and licensors for the products we sell; the effects of the
withdrawal of the United Kingdom ("U.K.") from the European Union
("Brexit"), impacts of the Russia-Ukraine war, and other sources of
market weakness in the U.K. and the Republic of Ireland (the
“ROI”); the effectiveness of our omnichannel initiatives; costs
associated with changes in minimum wage and overtime requirements;
wage pressure in the U.S. and the U.K.; labor shortages; the
effects of inflation, including our ability to pass increased cost
on to consumers; effects resulting from wars and other military
operations; the evolving regulatory landscape related to our use of
social media; the establishment and protection of our intellectual
property; weakness in the consumer economy and retail industry;
competition and fashion trends in our markets, including trends
with respect to the popularity of casual and dress footwear;
weakness in shopping mall traffic; any failure to increase sales at
our existing stores, given our high fixed expense cost structure,
and in our e-commerce businesses; risks related to the potential
for terrorist events; changes in buying patterns by significant
wholesale customers; changes in consumer preferences; our ability
to continue to complete and integrate acquisitions; our ability to
expand our business and diversify our product base; impairment of
goodwill in connection with acquisitions; payment related risks
that could increase our operating cost, expose us to fraud or
theft, subject us to potential liability and disrupt our business;
retained liabilities associated with divestitures of businesses
including potential liabilities under leases as the prior tenant or
as a guarantor of certain leases; and changes in the timing of
holidays or in the onset of seasonal weather affecting
period-to-period sales comparisons. Additional factors that could
cause differences from expectations include our ability to open
additional retail stores, renew leases in existing stores, control
or lower occupancy costs, to conduct required remodeling or
refurbishment on schedule and at expected expense levels; realize
anticipated cost savings, including rent savings; realize any
anticipated tax benefits, and achieve expected digital gains and
gain market share; deterioration in the performance of individual
businesses or of our market value relative to our book value,
resulting in impairments of fixed assets, operating lease right of
use assets or intangible assets or other adverse financial
consequences and the timing and amount of such impairments or other
consequences; unexpected changes to the market for our shares or
for the retail sector in general; our ability to meet our
sustainability, stewardship, emission and diversity, equity and
inclusion related ESG projections, goals and commitments; costs and
reputational harm as a result of disruptions in our business or
information technology systems either by security breaches and
incidents or by potential problems associated with the
implementation of new or upgraded systems, and the cost and outcome
of litigation, investigations and environmental matters that
involve us. For a full discussion of risk factors, see Item 1A,
"Risk Factors".
Readers are cautioned not to place undue reliance on
forward-looking statements as such statements speak only as of the
date they were made and involve risks and uncertainties that could
cause actual events or results to differ materially from the events
or results described in the forward-looking statements. The most
important factors which could cause our actual results to differ
from our forward-looking statements are set forth in our
description of risk factors in Item 1A
contained in our Annual Report on Form 10-K for the fiscal year
ended January 29, 2022,
which should be read in conjunction with the forward-looking
statements in this Quarterly Report on Form 10-Q. Forward-looking
statements speak only as of the date they are made, and we do not
undertake any obligation to update any forward-looking
statement.
The events described in the forward-looking statements might not
occur or might occur to a different extent or at a different time
than we have described. As a result, our actual results may differ
materially from the results contemplated by these forward-looking
statements.
We maintain a website at
www.genesco.com
where investors and other interested parties may obtain, free of
charge, press releases and other information as well as gain access
to our periodic filings with the Securities and Exchange Commission
(“SEC”). The information contained on this website should not be
considered to be a part of this or any other report filed with or
furnished to the SEC.
3
PART I - FINANCIAL
INFORMATION
Item 1. Financial Statements
(unaudited)
Genesco Inc. and Subsidiaries
Condensed Consolidated
Balance Sheets
(In thousands, except share amounts)
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Assets
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July 30, 2022
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January 29, 2022
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July 31, 2021
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Current Assets:
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Cash
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$
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44,939
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$
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320,525
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$
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304,039
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Accounts receivable, net of allowances of $5,335 at
July 30, 2022,
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$4,656 at
January 29, 2022 and $4,440 at
July 31, 2021
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42,782
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39,509
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31,872
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Inventories
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507,236
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278,200
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326,477
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Prepaids and other current assets
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99,455
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71,564
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91,554
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Total current assets
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|
|
694,412
|
|
|
|
709,798
|
|
|
|
753,942
|
|
|
Property and equipment, net
|
|
|
220,742
|
|
|
|
216,308
|
|
|
|
202,711
|
|
|
Operating lease right of use assets
|
|
|
491,412
|
|
|
|
543,789
|
|
|
|
610,188
|
|
|
Goodwill
|
|
|
38,523
|
|
|
|
38,556
|
|
|
|
38,787
|
|
|
Other intangibles
|
|
|
27,506
|
|
|
|
29,855
|
|
|
|
31,063
|
|
|
Deferred income taxes
|
|
|
4,519
|
|
|
|
1,466
|
|
|
|
—
|
|
|
Other noncurrent assets
|
|
|
22,606
|
|
|
|
22,327
|
|
|
|
21,929
|
|
|
Total Assets
|
|
|
1,499,720
|
|
|
|
1,562,099
|
|
|
|
1,658,620
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
226,779
|
|
|
|
152,484
|
|
|
|
186,593
|
|
|
Current portion - operating lease liabilities
|
|
|
135,571
|
|
|
|
145,088
|
|
|
|
156,562
|
|
|
Other accrued liabilities
|
|
|
80,266
|
|
|
|
134,156
|
|
|
|
134,407
|
|
|
Total current liabilities
|
|
|
442,616
|
|
|
|
431,728
|
|
|
|
477,562
|
|
|
Long-term debt
|
|
|
48,872
|
|
|
|
15,679
|
|
|
|
20,022
|
|
|
Long-term operating lease liabilities
|
|
|
413,416
|
|
|
|
471,878
|
|
|
|
524,857
|
|
|
Other long-term liabilities
|
|
|
34,283
|
|
|
|
40,346
|
|
|
|
48,082
|
|
|
Total liabilities
|
|
|
939,187
|
|
|
|
959,631
|
|
|
|
1,070,523
|
|
|
Commitments and contingent
liabilities
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
Non-redeemable preferred stock
|
|
|
818
|
|
|
|
827
|
|
|
|
828
|
|
|
Common equity:
|
|
|
|
|
|
|
|
|
|
|
Common stock, $1 par
value:
|
|
|
|
|
|
|
|
|
|
|
Authorized:
80,000,000 shares
|
|
|
|
|
|
|
|
|
|
|
Issued common stock
|
|
|
13,557
|
|
|
|
14,256
|
|
|
|
15,597
|
|
|
Additional paid-in capital
|
|
|
298,010
|
|
|
|
291,444
|
|
|
|
286,298
|
|
|
Retained earnings
|
|
|
307,929
|
|
|
|
350,206
|
|
|
|
336,659
|
|
|
Accumulated other comprehensive loss
|
|
|
(41,924
|
)
|
|
|
(36,408
|
)
|
|
|
(33,428
|
)
|
|
Treasury shares, at cost (488,464 shares)
|
|
|
(17,857
|
)
|
|
|
(17,857
|
)
|
|
|
(17,857
|
)
|
|
Total equity
|
|
|
560,533
|
|
|
|
602,468
|
|
|
|
588,097
|
|
|
Total Liabilities and Equity
|
|
$
|
1,499,720
|
|
|
$
|
1,562,099
|
|
|
$
|
1,658,620
|
|
The accompanying Notes are an integral part of these Condensed
Consolidated Financial Statements.
4
Genesco Inc. and Subsidiaries
Condensed Consolidated Statements
of Operations
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
July 30, 2022
|
|
|
July 31, 2021
|
|
|
July 30, 2022
|
|
|
July 31, 2021
|
|
|
Net sales
|
|
$
|
535,332
|
|
|
$
|
555,183
|
|
|
$
|
1,056,080
|
|
|
$
|
1,093,878
|
|
|
Cost of sales
|
|
|
281,018
|
|
|
|
282,661
|
|
|
|
550,322
|
|
|
|
563,694
|
|
|
Gross margin
|
|
|
254,314
|
|
|
|
272,522
|
|
|
|
505,758
|
|
|
|
530,184
|
|
|
Selling and administrative expenses
|
|
|
245,103
|
|
|
|
252,551
|
|
|
|
488,584
|
|
|
|
492,016
|
|
|
Asset impairments and other, net
|
|
|
129
|
|
|
|
7,070
|
|
|
|
(154
|
)
|
|
|
9,740
|
|
|
Operating income
|
|
|
9,082
|
|
|
|
12,901
|
|
|
|
17,328
|
|
|
|
28,428
|
|
|
Other components of net periodic benefit cost
|
|
|
50
|
|
|
|
56
|
|
|
|
148
|
|
|
|
17
|
|
|
Interest expense, net
|
|
|
405
|
|
|
|
617
|
|
|
|
702
|
|
|
|
1,346
|
|
|
Earnings from continuing operations before income taxes
|
|
|
8,627
|
|
|
|
12,228
|
|
|
|
16,478
|
|
|
|
27,065
|
|
|
Income tax expense
|
|
|
976
|
|
|
|
1,354
|
|
|
|
3,858
|
|
|
|
7,297
|
|
|
Earnings from continuing operations
|
|
|
7,651
|
|
|
|
10,874
|
|
|
|
12,620
|
|
|
|
19,768
|
|
|
Gain (loss) from discontinued operations, net of tax
|
|
|
(8
|
)
|
|
|
63
|
|
|
|
(30
|
)
|
|
|
47
|
|
|
Net Earnings
|
|
$
|
7,643
|
|
|
$
|
10,937
|
|
|
$
|
12,590
|
|
|
$
|
19,815
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.60
|
|
|
$
|
0.76
|
|
|
$
|
0.98
|
|
|
$
|
1.38
|
|
|
Discontinued operations
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
Net earnings
|
|
$
|
0.60
|
|
|
$
|
0.76
|
|
|
$
|
0.98
|
|
|
$
|
1.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
0.59
|
|
|
$
|
0.74
|
|
|
$
|
0.96
|
|
|
$
|
1.35
|
|
|
Discontinued operations
|
|
|
0.00
|
|
|
|
0.01
|
|
|
|
(0.01
|
)
|
|
|
0.00
|
|
|
Net earnings
|
|
$
|
0.59
|
|
|
$
|
0.75
|
|
|
$
|
0.95
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
12,813
|
|
|
|
14,339
|
|
|
|
12,887
|
|
|
|
14,313
|
|
|
Diluted
|
|
|
13,009
|
|
|
|
14,611
|
|
|
|
13,189
|
|
|
|
14,657
|
|
The accompanying Notes are an integral part of these Condensed
Consolidated Financial Statements.
5
Genesco Inc. and Subsidiaries
Condensed Consolidated Statements
of Comprehensive Income
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
July 30, 2022
|
|
|
July 31, 2021
|
|
|
July 30, 2022
|
|
|
July 31, 2021
|
|
|
Net earnings
|
|
$
|
7,643
|
|
|
$
|
10,937
|
|
|
$
|
12,590
|
|
|
$
|
19,815
|
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement liability adjustments, net of tax
|
|
|
13
|
|
|
|
21
|
|
|
|
63
|
|
|
|
(23
|
)
|
|
Foreign currency translation adjustments
|
|
|
(1,712
|
)
|
|
|
152
|
|
|
|
(5,579
|
)
|
|
|
1,654
|
|
|
Total other comprehensive income (loss)
|
|
|
(1,699
|
)
|
|
|
173
|
|
|
|
(5,516
|
)
|
|
|
1,631
|
|
|
Comprehensive Income
|
|
$
|
5,944
|
|
|
$
|
11,110
|
|
|
$
|
7,074
|
|
|
$
|
21,446
|
|
The accompanying Notes are an integral part of these Condensed
Consolidated Financial Statements.
6
Genesco Inc. and Subsidiaries
Condensed Consolidated Statements
of Cash Flows
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
July 30, 2022
|
|
|
July 31, 2021
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
12,590
|
|
|
$
|
19,815
|
|
|
Adjustments to reconcile net earnings to net cash provided by (used
in)
|
|
|
|
|
|
|
|
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
21,229
|
|
|
|
21,634
|
|
|
Deferred income taxes
|
|
|
(3,075
|
)
|
|
|
(9,994
|
)
|
|
Impairment of long-lived assets
|
|
|
542
|
|
|
|
1,824
|
|
|
Share-based compensation expense
|
|
|
6,788
|
|
|
|
3,967
|
|
|
Other
|
|
|
413
|
|
|
|
375
|
|
|
Changes in working capital and other assets and liabilities, net
of
acquisitions/dispositions:
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(3,753
|
)
|
|
|
66
|
|
|
Inventories
|
|
|
(234,018
|
)
|
|
|
(34,614
|
)
|
|
Prepaids and other current assets
|
|
|
(28,510
|
)
|
|
|
38,742
|
|
|
Accounts payable
|
|
|
71,258
|
|
|
|
36,681
|
|
|
Other accrued liabilities
|
|
|
(46,638
|
)
|
|
|
57,009
|
|
|
Other assets and liabilities
|
|
|
(21,037
|
)
|
|
|
(9,730
|
)
|
|
Net cash provided by (used in) operating activities
|
|
|
(224,211
|
)
|
|
|
125,775
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(29,005
|
)
|
|
|
(19,545
|
)
|
|
Proceeds from asset sales
|
|
|
—
|
|
|
|
9
|
|
|
Other
|
|
|
—
|
|
|
|
74
|
|
|
Net cash used in investing activities
|
|
|
(29,005
|
)
|
|
|
(19,462
|
)
|
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings under revolving credit facility
|
|
|
62,000
|
|
|
|
23,363
|
|
|
Payments on revolving credit facility
|
|
|
(27,375
|
)
|
|
|
(36,854
|
)
|
|
Shares repurchased related to share repurchase plan
|
|
|
(56,329
|
)
|
|
|
—
|
|
|
Shares repurchased related to taxes for share-based
awards
|
|
|
(3,875
|
)
|
|
|
(4,076
|
)
|
|
Change in overdraft balances
|
|
|
4,841
|
|
|
|
(517
|
)
|
|
Other
|
|
|
2
|
|
|
|
(35
|
)
|
|
Net cash used in financing activities
|
|
|
(20,736
|
)
|
|
|
(18,119
|
)
|
|
Effect of foreign exchange rate fluctuations on cash
|
|
|
(1,634
|
)
|
|
|
754
|
|
|
Net increase (decrease) in cash
|
|
|
(275,586
|
)
|
|
|
88,948
|
|
|
Cash at beginning of period
|
|
|
320,525
|
|
|
|
215,091
|
|
|
Cash at end of period
|
|
$
|
44,939
|
|
|
$
|
304,039
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
504
|
|
|
$
|
1,256
|
|
|
Income taxes paid (refunded)
|
|
|
25,718
|
|
|
|
(29,485
|
)
|
|
Cash paid for amounts included in measurement of operating lease
liabilities
|
|
|
101,687
|
|
|
|
96,248
|
|
|
Operating lease assets obtained in exchange for new operating lease
liabilities
|
|
|
41,137
|
|
|
|
64,884
|
|
The accompanying Notes are an integral part of these Condensed
Consolidated Financial Statements.
7
Genesco Inc. and Subsidiaries
Condensed Consolidated
Statements of Equity
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
Redeemable
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Shares
|
|
Total
Equity
|
|
|
Balance January 30, 2021
|
$
|
1,009
|
|
$
|
15,438
|
|
$
|
282,308
|
|
$
|
320,920
|
|
$
|
(35,059
|
)
|
$
|
(17,857
|
)
|
$
|
566,759
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,878
|
|
|
—
|
|
|
—
|
|
|
8,878
|
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,458
|
|
|
—
|
|
|
1,458
|
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
1,912
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,912
|
|
|
Other
|
|
(181
|
)
|
|
6
|
|
|
176
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Balance May 1, 2021
|
|
828
|
|
|
15,444
|
|
|
284,396
|
|
|
329,798
|
|
|
(33,601
|
)
|
|
(17,857
|
)
|
|
579,008
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,937
|
|
|
—
|
|
|
—
|
|
|
10,937
|
|
|
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
173
|
|
|
—
|
|
|
173
|
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
2,055
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,055
|
|
|
Restricted stock issuance
|
|
—
|
|
|
219
|
|
|
(219
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Restricted shares withheld for taxes
|
|
—
|
|
|
(64
|
)
|
|
64
|
|
|
(4,076
|
)
|
|
—
|
|
|
—
|
|
|
(4,076
|
)
|
|
Other
|
|
—
|
|
|
(2
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance July 31, 2021
|
$
|
828
|
|
$
|
15,597
|
|
$
|
286,298
|
|
$
|
336,659
|
|
$
|
(33,428
|
)
|
$
|
(17,857
|
)
|
$
|
588,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-
Redeemable
Preferred
Stock
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Treasury
Shares
|
|
Total
Equity
|
|
|
Balance January 29, 2022
|
$
|
827
|
|
$
|
14,256
|
|
$
|
291,444
|
|
$
|
350,206
|
|
$
|
(36,408
|
)
|
$
|
(17,857
|
)
|
$
|
602,468
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,947
|
|
|
—
|
|
|
—
|
|
|
4,947
|
|
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,817
|
)
|
|
—
|
|
|
(3,817
|
)
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
3,239
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,239
|
|
|
Restricted stock issuance
|
|
—
|
|
|
78
|
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Shares repurchased
|
|
—
|
|
|
(104
|
)
|
|
—
|
|
|
(6,396
|
)
|
|
—
|
|
|
—
|
|
|
(6,500
|
)
|
|
Other
|
|
(9
|
)
|
|
(13
|
)
|
|
23
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Balance April 30, 2022
|
|
818
|
|
|
14,217
|
|
|
294,628
|
|
|
348,757
|
|
|
(40,225
|
)
|
|
(17,857
|
)
|
|
600,338
|
|
|
Net earnings
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,643
|
|
|
—
|
|
|
—
|
|
|
7,643
|
|
|
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,699
|
)
|
|
—
|
|
|
(1,699
|
)
|
|
Share-based compensation expense
|
|
—
|
|
|
—
|
|
|
3,549
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,549
|
|
|
Restricted stock issuance
|
|
—
|
|
|
239
|
|
|
(239
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Shares repurchased
|
|
—
|
|
|
(826
|
)
|
|
—
|
|
|
(44,596
|
)
|
|
—
|
|
|
—
|
|
|
(45,422
|
)
|
|
Restricted shares withheld for taxes
|
|
—
|
|
|
(72
|
)
|
|
72
|
|
|
(3,875
|
)
|
|
—
|
|
|
—
|
|
|
(3,875
|
)
|
|
Other
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
Balance July 30, 2022
|
$
|
818
|
|
$
|
13,557
|
|
$
|
298,010
|
|
$
|
307,929
|
|
$
|
(41,924
|
)
|
$
|
(17,857
|
)
|
$
|
560,533
|
|
The accompanying Notes are an integral part of these Condensed
Consolidated Financial Statements.
8
Genesco Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1
Summary of Significant
Accounting Policies
Basis of Presentation
The Condensed Consolidated Financial Statements and Notes contained
in this report are unaudited but reflect all adjustments, including
normal recurring adjustments, necessary for a fair presentation of
the results for the interim periods of the fiscal year ending
January 28, 2023 ("Fiscal 2023") and of the fiscal year ended
January 29, 2022 ("Fiscal 2022"). All subsidiaries are consolidated
in the Condensed Consolidated Financial Statements. All significant
intercompany transactions and accounts have been eliminated. The
results of operations for any interim period are not necessarily
indicative of results for the full year. The Condensed Consolidated
Financial Statements and the related Notes have been prepared in
accordance with the instructions to Form 10-Q and do not include
all of the information and footnotes required by U.S. Generally
Accepted Accounting Principles (“GAAP”) for complete financial
statements.
The Condensed Consolidated Balance Sheet as of January 29, 2022 has
been derived from the audited financial statements at that date.
These Condensed Consolidated Financial Statements should be read in
conjunction with our Consolidated Financial Statements and Notes
for Fiscal 2022, which are contained in our Annual Report on Form
10-K as filed with the SEC on March 23, 2022.
Nature of Operations
Genesco Inc. and its subsidiaries (collectively the "Company",
"Genesco," "we", "our", or "us") business includes the sourcing and
design, marketing and distribution of footwear and accessories
through retail stores in the U.S., Puerto Rico and Canada primarily
under the Journeys®,
Journeys Kidz®,
Little Burgundy®
and Johnston & Murphy®
banners and under the Schuh®
banner in the United Kingdom (“U.K.”) and the Republic of Ireland
(“ROI”); through catalogs and e-commerce websites including the
following: journeys.com, journeyskidz.com, journeys.ca,
littleburgundyshoes.com, schuh.co.uk, schuh.ie, schuh.eu,
johnstonmurphy.com, johnstonmurphy.ca, nashvilleshoewarehouse.com
and dockersshoes.com and at wholesale, primarily under our Johnston
& Murphy brand, the licensed Levi's®
brand, the licensed Dockers®
brand, the licensed G.H. Bass®
brand and other brands that we license for footwear. At July 30,
2022, we operated
1,412
retail stores in the U.S., Puerto Rico, Canada, the U.K. and the
ROI.
During the three and six months ended July 30, 2022 and July 31,
2021, we operated
four
reportable business segments (not including corporate): (i)
Journeys Group, comprised of the Journeys, Journeys Kidz and Little
Burgundy retail footwear chains and e-commerce operations; (ii)
Schuh Group, comprised of the Schuh retail footwear chain and
e-commerce operations; (iii) Johnston & Murphy Group, comprised
of Johnston & Murphy retail operations, e-commerce operations
and wholesale distribution of products under the Johnston &
Murphy brand; and (iv) Licensed Brands, comprised of the licensed
Dockers, Levi's, and G.H. Bass brands, as well as other brands we
license for footwear.
Selling and Administrative Expenses
Wholesale costs of distribution are included in selling and
administrative expenses on the Condensed Consolidated Statements of
Operations in the amount of
$3.1
million and
$3.6
million for the second quarters of Fiscal 2023 and Fiscal 2022,
respectively, and
$5.8
million and
$7.2
million for the first six months of Fiscal 2023 and Fiscal 2022,
respectively.
Retail occupancy costs recorded in selling and administrative
expense were
$75.8
million and
$75.1
million for the second quarters of Fiscal 2023 and Fiscal 2022,
respectively, and
$154.3
million and
$145.9
million for the first six months of Fiscal 2023 and Fiscal 2022,
respectively. Fiscal 2022 included Covid-related rent
credits.
Advertising Costs
Advertising costs were
$28.0
million and
$23.5
million for the second quarters of Fiscal 2023 and Fiscal 2022,
respectively, and
$50.1
million and
$44.6
million for the first six months of Fiscal 2023 and Fiscal 2022,
respectively.
Vendor Allowances
Vendor reimbursements of cooperative advertising costs recognized
as a reduction of selling and administrative expenses were
$3.5
million and
$2.4
million for the second quarters of Fiscal 2023 and Fiscal 2022,
respectively, and
$6.7
million and
$5.4
million for the first six months of Fiscal 2023 and Fiscal 2022,
respectively. During the first six months of each of Fiscal 2023
and Fiscal 2022, our cooperative advertising reimbursements
received were not in excess of the costs incurred.
9
Genesco Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(unaudited)
Note 1
Summary of Significant Accounting Policies, Continued
COVID-19 Pandemic
The COVID-19 pandemic has created significant public health
concerns as well as economic disruption, uncertainty, and
volatility which may negatively affect our business operations. As
a result, if the pandemic persists or worsens, our accounting
estimates and assumptions could be impacted in subsequent interim
reports and upon final determination at year-end, and it is
reasonably possible such changes could be significant.
New Accounting Pronouncements
We do not currently have any new accounting pronouncements pending
adoption.
Note 2
Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill by segment were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands)
|
|
Journeys
Group
|
|
|
Licensed
Brands
Group
|
|
|
Total
Goodwill
|
|
|
Balance, January 29, 2022
|
|
$
|
10,087
|
|
|
$
|
28,469
|
|
|
$
|
38,556
|
|
|
Effect of foreign currency exchange rates
|
|
|
(26
|
)
|
|
|
(7
|
)
|
|
|
(33
|
)
|
|
Balance, July 30, 2022
|
|
$
|
10,061
|
|
|
$
|
28,462
|
|
|
$
|
38,523
|
|
Other intangibles by major classes were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trademarks
|
|
Customer Lists
|
|
|
Other
|
|
|
Total
|
|
|
(In thousands)
|
|
Jul. 30, 2022
|
|
|
Jan. 29,
2022
|
|
|