Q4 2013 Earnings Call
March 08, 2013 8:30 am ET
Robert J. Dennis - Chairman, Chief Executive Officer and President
James S. Gulmi - Chief Financial Officer and Senior Vice President of Finance
Stephanie S. Wissink - Piper Jaffray Companies, Research Division
Scott D. Krasik - BB&T Capital Markets, Research Division
Christopher Svezia - Susquehanna Financial Group, LLLP, Research Division
Ben Shamsian - Sterne Agee & Leach Inc., Research Division
Mark K. Montagna - Avondale Partners, LLC, Research Division
Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division
Good day, everyone and welcome to the Genesco Fourth Quarter Fiscal Year 2013 Conference Call. Just a reminder, today's call is being recorded.
Previous Statements by GCO
» Genesco's CEO Discusses F3Q2013 Results - Earnings Call Transcript
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Participants also expect to refer to certain adjusted financial measures during the call. All non-GAAP financial measures referred to in the prepared remarks are reconciled to their GAAP counterparts in the attachments to this morning's press release and in schedules available on the company's homepage under Investor Relations.
I will now turn the conference over to Bob Dennis, Genesco's Chairman, President and Chief Executive Officer. Please go ahead, sir.
Robert J. Dennis
Good morning, and thank you for being with us. Joining me today is Jim Gulmi, our Chief Financial Officer. As usual, Jim's detailed review of the results has been posted to our website, along with the press release from earlier this morning. I'll begin today's call with remarks about our full year and fourth quarter results, our start to fiscal 2014 and our outlook for the year. Then I'll turn the call over to Jim for a review of the numbers and guidance. I will then return to provide some color on our operating segments before we open up the call to your questions.
As you saw from our press release this morning, our fiscal 2013 performance was solid, with adjusted earnings per share up 24% to $5.06. This was achieved by a top line gain of 14% and meaningful expense leverage. As a reminder, we are now reporting a combined comparable sales number that includes stores and e-commerce, and that is the number we will be citing throughout our remarks today. For a more detailed breakdown of our comp performance, please see Jim's online review.
For our fiscal 2013, comps were up 3%. From a strategic standpoint, we are very pleased with where the company is heading. During fiscal 2013, we executed well on the growth drivers we identified at this point last year. First, we accelerated Schuh's store opening schedule to take advantage of the business's momentum over the past year and the attractive real estate opportunities afforded by the weak economic environment in the U.K. Schuh's freestanding store count at year end was 79, up 23% over last year, including the third quarter addition of 3 Schuh Kids stores. Schuh's success comes despite challenging market conditions in the U.K. and gives us confidence that accelerating Schuh's store growth now will position us for additional gains when the economy eventually recovers.
Second, we continued expanding our Lids Locker Room and Clubhouse concepts through acquisitions and organic growth. We added 12 net new Locker Room stores to a base of 78 in fiscal 2013 and 13 net new Clubhouse stores to a base of 41. We continue to believe the economics of this business benefit from scale, and we see continuing potential to grow these concepts by both acquiring and opening stores.
Third, we continue to grow our portfolio of businesses in Canada. During fiscal 2013, we increased our total Canadian store count, 31%, ending the year with 127 locations. This included adding 15 net new Lids stores, 11 Journeys stores and 4 Johnston & Murphy stores.
Fourth, we have been enhancing our e-commerce platform in a way that complements our brick-and-mortar locations and sets the stage for continued growth. Today, Journeys and Johnston & Murphy have an integrated e-commerce platform that allows consumers to search the entire chain's inventory position and purchase product online from within the store so that we never miss a sale just because we happen to be out of stock in a particular store.
We expect Lids, which currently has in-store access to warehouse inventory-only, will add the capability to access the other store inventory no later than the fourth quarter of this year. We've also increased the number of styles available online in Lids and Journey, which also bolstered top line growth in fiscal 2013, and we have the opportunity to do more of that, especially at Lids. In aggregate our comparable e-commerce and catalog businesses grew 11% over the past year and 17% in Q4.
Each of these 4 successful initiatives contributed to the 14% sales increase for the year. We believe we've entered the new fiscal year in the right position to continue expanding the market-leading positions of each of our major businesses, with each of these 4 drivers playing a continuing role. Indeed, we are planning to add even more square footage this year than last. Our confidence is boosted by the fact that we opened 104 new stores in the past year, and as a group, they are nicely ahead of budget.