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Genesco Inc. (GCO - Free Report) has reported yet another earnings surprise since its original feature earlier this summer. The company raised its outlook and thanks to a weak market the valuations are attractive.

Company Description

Genesco sells footwear, sports apparel, headwear and accessories at more than 22,000 locations. Brands include Journeys, Lids and several others.

Another Surprise

Since GCO was featured as a Zacks Rank Buy, back in June, the company posted another earnings surprise. Quarterly results came out on Aug 31 and showed earnings per share of $0.22, 12 cents better than expected. The company now has 4 consecutive earnings surprises.

Sales grew 29% to $471 million thanks in part to a 14% jump in same-store sales.

Raising the Outlook

In the same press release the company raised its full-year outlook. Genesco added 45 cents to both ends of the range which is now at $3.35-$3.42.

After a round of upward revisions, the fiscal 2012 Zacks Consensus Estimate is right in the middle of that range, at $3.39. The 2013 estimates are averaging $4.03, up 11 cents. If Genesco can hit those targets, EPS growth rates will be 37% and 19%, respectively.

Reasonable Valuations

Shares of GCO are going for 15 times the forward estimates and that gives them a PEG ratio of 1.0. The price to sales ratio is a solid 0.6 and the stock is going for 1.8 times book value.

The Chart

You can see below that the initial reaction to the earnings surprise was very bullish. Unfortunately, stocks don't trade in a vacuum and GCO was dragged down by the market. However, this gives investors a good chance to get in at a lower price.

Read the June 30th Feature Here

Genesco Inc. - ticker GCO >

Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service

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