Chilton Investment Company and Genesco
Chilton initiated positions in Abbott Laboratories (ABT), U.S. Bancorp (USB), Macy’s Inc. (M), and TransDigm Group Inc. (TDG). The fund sold its stakes in Genesco Inc. (GCO), Bally Technologies Inc. (BYI), and CarMax Inc. (KMX).
Chilton exited its position in Genesco Inc. (GCO), which had accounted for 1.15% of the fund’s third quarter portfolio.
Genesco, a Nashville-based specialty retailer, sells footwear, headwear, sports apparel, and accessories in more than 2,550 retail stores and leased departments throughout the U.S., Canada, the United Kingdom, and the Republic of Ireland. The company’s Lids Sports Group division operates the Lids headwear stores and the lids.com website, the Locker Room by Lids, and other team sports fan shops and single-team clubhouse stores, and the Lids Team Sports team dealer business. Plus, Genesco sells wholesale footwear under its Johnston & Murphy brand, the relaunched Trask brand, the licensed Dockers brand, the SureGrip line of slip-resistant operational footwear, and other brands.
The company missed on earnings and revenue estimates in its fourth quarter results. Earnings were up, reflecting lower one-time charges. The company reported net earnings of $42.15 million or $1.79 per share for the 13-week period ended February 1, 2014, up from $38.76 million or $1.63 per share, for the 14-week period ended February 2, 2013. In the third quarter of fiscal 2014, the company had trimmed its earnings outlook for full-year 2014, citing a “slightly more cautious outlook for the balance of the year” due to a “challenging selling environment.”
Net sales for the 13-week fourth quarter of fiscal 2014 decreased 0.5%, to $793 million from $797 million in the 14-week fourth quarter of fiscal 2013. Comparable sales in fourth quarter 2014 increased 1% for the company, with a 4% increase in Lids Sports Group, a flat comp in Journeys Group, a 7% decrease in Schuh Group, and an 11% increase in Johnston & Murphy Group.
CEO Robert J. Dennis said in the earnings release, “The inconsistent sales patterns that characterized last year carried over into the start of fiscal 2015 with comparable sales down 2% through March 8, 2014.”
Despite a difficult first week that was marked by severe winter storms in several of its key markets, Genesco said comparable sales were positive and margins held up. The company issued a cautious outlook for the first half of the fiscal year, reportedly “given the lack of a strong new fashion driver in the teen footwear space and continued uncertainty around customer traffic.” Genesco expects adjusted fiscal 2015 diluted earnings per share to be in the range of $5.40 to $5.55, which represents a 6% to 9% increase over fiscal 2014’s adjusted earnings per share of $5.09.