Net income fell 11% to $18,382,000 from $20,614,000 for the three months ended May 4 on a 1% sales decline to $591,388,000 to $600,144,000 which included an oberall 4% comp store decline. Journeys comped down 2% while lids comped down 6% and Schun comped down 11%. That wa partially offser by a 7% increase in Johunston & Murphy's comp. GCO said it got off to a rough Feb. in the late payment if tax refunds bya saw steady improvrment through March and April despite colder weather and has seen the improvement accelerate to positive comps of up 1% through May 25.
GCO was confident the improvement would hold and reaffirmed its original guidance for the year with comps up low-single digits with EPS for the year at $5.57-5.67($131mm) with comps expected to stay positive in Q2 and then improve sequentially as GCO faces easier comparisons in the back half. While it sees gross margin falling 10-20 b.p., that will be more than offset by 50-60 b.p. of expense leverage. The forecast excludes charges for its netword untrusion of $3.4-4.4 million and defferred compensation of $11.5 million owed to Schuh management. Those charges totaled $4.2 million in Q1 of this year against $3.1 million last year.
It seems more real estate opportunity in the Locker Room and Clubhouse concepts, having adding seven stores through acquisition in Q1 and planning a total of 46 more stores organically and through acquisitions this year. Schuh will also see 20 net new stores though many of those are replacing leased departments that were terminated and four are Schuh Kids stores. For now, it still has no firm rollout plans for the Shi concept, which had a slow Q1` but saw improvement with the weather.
Written by Nicolas Yang