Shares of shoe and accessories seller Genesco Inc. dropped 7.0% in premarket trading Friday, after the parent of store brands including Journeys and Johnston & Murphy reported fiscal third-quarter profit and sales that beat expectations but slashed its full-year earnings outlook, citing a “sluggish” start to November, higher promotional activity and continued cost pressures. Net income for the quarter to Oct. 29 fell to $20.4 million, or $1.65 a share, from $32.9 million, or $2.25 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.65 beat the FactSet consensus of $1.57. Sales inched up 0.5% to $603.8 million, above the FactSet consensus of $590.2 million, as Journeys sales were flat and Johnston & Murphy sales jumped 19%. For fiscal 2023, the company narrowed its sales growth outlook to down 1% to down 2% from down 3% to flat, but lowered its adjusted EPS guidance range to $5.50 to $5.90 from $6.25 to $7.00. “While we did a good job growing top-line and protecting gross margins during back-to-school, a sluggish start to November combined with higher industry-wide promotional activity and cost pressures has led us to adopt a more conservative view on the balance of this year,” said Chief Executive Mimi Vaughn. The stock has rallied 12.6% over the past three months through Thursday while the S&P 500 has gained 3.9%.
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