Mark Montagna at Avondale Partners has slashed his price target for shares of Genesco following the company's disappointing Q3 results. He now sees Nashville-based Genesco — which fell from $80 to $70 on Friday (Ticker: GCO) — climbing to $78 in the coming quarters, down from his previous target of $95. But he is sticking to his 'market outperform' rating, saying that the retailer's main problem is digesting the growth in parts of its Lids hat division and not a fashion issue that will leave it with lots of unsold inventory.
The jump in shares of Louisiana-Pacific Monday — investors bid up the Nashville-based company on news that two of its Canadian rivals plan to join forces — was enough to push Sean Coleman at Longbow Research to the sidelines. The analyst has lowered his rating on LP (Ticker: LPX) to 'neutral' from 'buy.' His price target of $16 — LP ended Monday at $16.83 — is unchanged.
The Lids Sports Group division of Genesco has signed a 10-year pact to be the official retail partner of Ohio State University athletics programs. Genesco already ran four Buckeye Corner stores in the Columbus area. Those will now become official Ohio State stores and the pact adds e-commerce, on-campus, arena/stadium and game-day concessions operations to the company's purview.
On a (maybe) unrelated note, shares of Genesco (Ticker: GCO) hit a new all-time high of $80.11 this morning on strong volume. They've climbed 12 percent in the past month and are up 35 percent over the past year.
Avondale Partners analyst Mark Montagna likes the low-risk aspect of Genesco's agreement with department store leader Macy's to open across the country Lids Locker Room stores in 200 cities around the country, 160 of which don't yet have a Locker Room presence. The move, he told clients this week, is an inexpensive way to add to Genesco's (Ticker: GCO) reach in many of the country's largest cities, and the stores should begin to post margins at or a little above regular Locker Room stores by mid-2014. Montagna has lifted his earnings estimate for Genesco's fiscal 2015 (which starts in February 2014) to $6.44 per share from $6.36.
Bridgestone Americas executives have told the IndyCar Series that their Firestone Racing division will continue to supply tires to the 16-race circuit through at least 2014. The locally based company a year ago told the series it would wind down its involvement, but it will now extend its official tire designation, which began in 2000.
A division of another local company also is stepping up its involvement with the IndyCar organizations. The Lids Clubhouse division of Genesco has signed a deal to manage the trackside and online merchandising efforts of the series, with which it has had a relationship since the late '90s.
Lids Sports Group, a division of apparel retailer Genesco, has bought a small chain that sells Ohio State University gear at four stores around Columbus as well as on the Web. The timing may be a bit awkward given the PR disaster that is the Jim Tressel saga, but the move fits with Genesco's aggressive plans for its Lids Clubhouse business, which now has more than 20 officially licensed locations for collegiate and professional teams around the country. Shares of the Nashville-based company (Ticker: GCO) are up 10 percent so far this year.
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