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Momentum

Genesco, Inc. (GCO - Snapshot Report) continues to trade strong in the volatile market, recently hitting a new all-time high on another strong quarter. With estimates on the rise and a bullish growth projection, this Zacks #1 rank stock is a good pick for retail momentum.

Company Description

Genesco operates across the supply chain as both a wholesaler and retailer. The company owns over 1,100 stores under the name Journeys and also wholesales shoes to other distributors. The company was founded in 1924 and has a market cap of $2billion.

Genesco has been trading strong in spite of jitters about global growth projections. The company's share price just hit a new all-time high after reporting strong Q3 results that came in ahead of expectations.

Third-Quarter Results

Revenue was up 33% to $617 million. Earnings also came in strong at $1.21, 26% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 48% over the last four quarters.

The strong revenue growth was driven by the acquisition of Schuh Group, Inc., which Genesco bought in June for $113 million. Strong same-store sales also looked good, up 12% from last year.

Financial Profile

Genesco took on a little debt for its acquisition, jumping from 0 to $143 million. Cash and short-term investments is up 50% to $36 million.

Estimates

We saw some pretty solid movement in estimates off the good quarter, with the current-year estimate adding 9% to $3.71. The next-year estimate tacked on 5%, climbing to $4.28, a solid 15% growth projection.

Valuation

But in spite of the gains, the valuation picture still looks good, with a PEG ratio of 1 in line with the benchmark for value.

12-Month Chart

On the chart, shares recently hit a new all-time high after posting big gains over the last few months. Take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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