Genesco, Inc. (GCO) is cyclical but continues to show solid growth in a tough retail environment.

Company Description

Genesco is a footwear retailer and wholesaler. Brands include Dockers Footwear, Nautica Footwear, and others. Additionaly the company runs Volunteer Leather Co., a leather tanning and finishing unit.

Crushed Earnings Estimates

On May 28 the footwear company released fiscal first-quarter results for 2009 that included adjusted earnings of $3.5 million, or 17 cents per share. Analysts were only expecting 3 cents per share, making this the second quarterly surprise in the past 4.

Net sales grew 4% on a year over year basis to $370 million.

Estimates Spike

Full-year estimates are up sharply following the report. The consensus for this year, ending in early 2010, is $1.73, up from $1.56. Forcasts for next year are averaging $1.98, up from $1.89.

Valuations Remain Strong

Curently shares are trading at just under 10 times current earnings and just over 10 times forward earnings. The PEG ratio is only 0.9, so even the growth, 15% next year, is a decent bargain.

The Chart

After a difficult 2007, Genesco looks to be righting the ship and once again reporting consistent earnings relative to estimates.

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