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Analyst Blog

Shares of Genesco Inc. (GCO - Snapshot Report) attained a 52-week high of $80.52 on the last trading day, eventually closing at $78.79. Moreover, the company has amassed a return of 32.7% over the past one year.

Genesco is currently trading at a forward P/E of 14.2x, a 15.3% discount to the peer group average of 16.76x. Average volume of shares traded in the last 3 months is $174.9K. Also, the company has long-term growth rate of 15%, marginally above the peer group average of 14.8%.   

The stock has been gaining momentum following its fourth quarter fiscal 2014 earnings results, since when the company’s shares have gained 7.2% to date.

Although this Zacks Rank #4 (Sell) company’s earnings missed estimates this past quarter, over the last 14 quarters it has delivered an average positive earnings surprise of 26.7%. Its fourth-quarter earnings of $2.16 per share came in line with its prior-year figure. Also, for the full year, the company’s adjusted earnings from continuing operations came in at $5.09 per share, slightly above the fiscal 2013 earnings of $5.06.

Genesco’s Lids Sports Group and Johnston & Murphy Group performed well as they delivered positive comparable store sales (comps) of 4% and 11%, respectively. Partly offset by a 7% comps decline at Schuh Group and flat comps at Journeys Group. Overall comps at Genesco rose by 1%. Excluding the effect of one extra week in the fourth quarter of fiscal 2013, quarterly net sales increased 4% year over year.

Genesco’s lower cost of sales, as a percentage of sales facilitated gross margin expansion of 50 basis points (bps) to 48.7%, which in turn led to a 10 bps improvement in the adjusted operating margin of 10.4%.

Further, the company’s focus on its expansion plans is well evident from the introduction of 48 new stores and acquisition of 8 new stores during the fourth quarter. These new stores are likely to augment Genesco’s top line and enhance results, making investors positive on the company.

Apart from Genesco, ANN INC. (ANN - Snapshot Report), Foot Locker, Inc. (FL - Snapshot Report) and Hill International, Inc. (HIL - Snapshot Report) hit 52 week highs of $43.61, $46.94 and $5.09, respectively on the last trading day.