Genesco Inc. engages in the retail and wholesale of footwear, apparel, and accessories. The company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group, and Licensed Brands. The company was founded in 1924 and is based in Nashville, Tennessee.
GCO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Genesco Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Genesco Inc ranked in the 66th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 98% on a DCF basis. The most interesting components of our discounted cash flow analysis for Genesco Inc ended up being:
41% of the company's capital comes from equity, which is greater than only 14.53% of stocks in our cash flow based forecasting set.
Genesco Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -23.41. This coverage rate is greater than that of only 4.89% of stocks we're observing for the purpose of forecasting via discounted cash flows.
The weighted average cost of capital for the company is 15. This value is greater than 89.96% stocks in the Consumer Cyclical sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CVCO, HOG, HTHT, TTSH, and GES can be thought of as valuation peers to GCO, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Genesco (GCO) reports comparable sales decreased 3% and total sales down 8% for quarter-to-date period ended December 26, 2020.Same store sales decreased 14% and e-commerce comparable sales increased 49%.Comp for Journeys Group -4%, Schuh Group +29% and Johnston & Murphy Group -34%. Mimi E. Vaughn, Genesco board chair, president and chief executive officer,...
Shares of Designer Brands (NYSE: DBI) were moving higher even as the broader market pulled back today. A better-than-expected preliminary report from fellow footwear retailer Genesco (NYSE: GCO) seemed to lift shares of the DSW parent today. Designer Brands stock closed up 11.2%, while Genesco finished the day up 11.8%.
Genesco Inc. stock soared 10.6% in Monday trading after the retailer gave a preliminary fourth-quarter report that shows the company's Journeys banner had strong full-price sales during the period. Journeys sells brands including VF Corp.'s Vans brand, Ugg, a Deckers Outdoor Corp. label, and Birkenstock shoes. Journeys Group comparable sales were down 4% for the eight weeks ending Dec. 26, 2020. The company's Schuh retailer, which sells many of the same brands, saw comparable sales rise 29%. "Teens have always been interested in comfort and accessible price points and that's absolutely what we offered," said Mimi Vaughn, chief executive of Genesco, at the virtual ICR Conference on Monday, adding that "the rest of the world" joined teens and kids in the pursuit of comfort during the p...