Nashville-based Genesco Inc.'s stock plummeted nearly 36 percent on Wednesday, after the shoe and hat retailer had downgraded its financial outlook and reported weak November sales.
Shares of Genesco declined $6.32 per share and closed at $11.40 on the New York Stock Exchange. Earlier in the day, the stock touched its lowest level in six years at $10.80 per share.
Robert W. Baird & Co. analyst Mitch Kummetz said in a note to clients that Genesco's same-store sales have deteriorated lately, "and we expect the company's performance to continue to be hampered by difficult market conditions through at least the first half of next year."
Genesco operates several groups of retail stores, including Journeys, Hat World, Underground Station and Johnston & Murphy.
For the fourth quarter, the company said it expects same-store sales — a key measure of a retailer's health — to fall between 1 percent and 4 percent as consumers pull back on spending.
Genesco said November total same-store sales have fallen 9 percent, although the company said sales at its Journeys stores should improve with incoming shipments starting at the end of the month.
The retail chain said same-store sales at its Johnston & Murphy group are down 20 percent through mid-November, while the Underground Station group is down 15 percent. The Journeys group is down 9 percent, and the Hat World group is down 6 percent.
The shoe retailer's problems came on the same day that Wall Street hit levels not seen since 2003, with the Dow Jones industrial average falling below the 8,000 mark as concerns about the U.S. auto industry disheartened investors.
The Dow closed down more than 427 points at 7,997.28 by day's end.
"In the near term, we remain focused on what we can best control in these difficult times, namely costs, inventory management and ensuring that we have the right merchandise in our stores to meet our customers' wants and needs," said Robert J. Dennis, Genesco's CEO and president.
Genesco spokeswoman Claire McCall declined to comment on the stock price. Genesco said for the three-month period ending Nov. 1 it expects net sales of about $390 million — up nearly 5 percent from $372 million a year ago but slightly below Wall Street analysts' expectations.
Total same-store sales at all of the company's divisions over those three months actually increased 2 percent, with the largest growth in Journeys and hat stores. The only decline during the third quarter occurred in Genesco's upscale retail store, Johnston & Murphy, where same-store sales fell 15 percent.
Johnston & Murphy, known primarily for selling men's shoes, launched a women's line in the fall.
Genesco will release complete third-quarter earnings Tuesday.
Real Estate Outlook: Mixed Messages Return
Cresent to close Nashville, Cool Springs furniture stores
Wal-Mart’s profits rise as it draws from rivals
Condo Trends: Nationally, Prices Hold 1Q Despite Housing Downturn
