Net sales were $335 million for the three-month period ending Aug. 1, compared to $353 million in the last fiscal year, the company said.
Sales at Genesco's stores opened at least a year, known as same-store sales, declined across all four of its concepts. Same-store sales is seen as a key indicator of a retailer's financial health.
Same-store sales at the Journeys division were down 9 percent, at Hat World Group down two percent, at hip-hop stores Underground Station down 19 percent and at upscale shoe store Johnston & Murphy down 16 percent, the company said.
The company said its earnings were impacted by charges related to merger related expenses, asset impairment and lease terminations, other legal matters and a higher effective tax rate. Excluding these charges, earnings were down two cents per diluted share, beating analyst estimates of a loss of four cents a share. Last year, the company reported a nearly $10.8 million net loss.
Christopher Svezia, an analyst with Susquehanna Financial Group in New York said in a research note he believes the Journeys division remains well-positioned, but with several key brands such as DC and Converse expanding distributions to other retail chains, Journeys should rely on the strength of its higher priced exclusives.
Genesco said moving forward it expects sales comparisons to improve in the fourth quarter and to meet its expectations of $1.70 to $1.80 earnings for the year. Svezia said helping Genesco in the fourth quarter will be more favorable lease negotiations and slower near-term store growth.
"Looking ahead, while visibility with regard to the economic climate is still quite limited, we remain cautiously optimistic about the second half of fiscal 2010," said Robert J. Dennis, president and CEO of Genesco in a statement.
Genesco shares were trading at $23.18 a share on the New York Stock Exchange, up $2.37 on Thursday morning.
Real Estate Outlook: Price and Sale GainsRetail sales dip 0.1 percent in July
