Good day, everyone, and welcome to the Genesco Fourth Quarter Fiscal Year 2012 Conference Call. Just a reminder, today's call is being recorded. Participants in the call expect to make forward-looking statements. They reflect the participant's expectations as of today, but actual results could differ. Genesco refers you to this morning's earnings release and to the company's SEC filings, including the third quarter fiscal year 2012 10-Q, for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made during the call today. At this time, for opening remarks and introductions, I'd like to turn the call over to Mr. Bob Dennis, Chairman, President and Chief Executive Officer. Please go ahead.

Good morning, and thank you for being with us for our Fourth Quarter Earnings Call. With me today is Jim Gulmi, our Chief Financial Officer. As a reminder, Jim's detailed review of the quarterly financials has been posted to our website, along with the press release from earlier this morning. I'll begin this call with a few short remarks about the fourth quarter and an outline of the key reorganization we are in the midst of executing. And then, I will turn the call over to Jim for a review of the numbers. Finally, I'll return to provide some color on our operating segments before we open the call up for your questions. Our fourth quarter performance ended up being much better than we initially anticipated and represents a great way to end what was a very rewarding year for Genesco. Fourth quarter sales and earnings run ahead of plan for almost all of our businesses. What was really pleasing about the fourth quarter, and this was also true of the third quarter, was our ability to maintain our consolidated double-digit comp trend from the first half of the year in the face of much stronger comparisons in the back half. This speaks to the excellent job that our teams are doing to ensure our stores are merchandised well, taking advantage of several positive trends by being the dominant go-to retailer for many key brands and styles. The sales momentum from the fourth quarter has carried over into the first quarter with comps up 13% in February. While this is certainly an encouraging start to fiscal 2013, we aren't budgeting this level of growth for the full year. February has been a variable month in recent years with IRS refunds, the timing of Mardi Gras and weather all very much…

Thank you, Bob. Much of the detailed financial information for the quarter has been posted online. So I will only be making a few comments. The fourth quarter came in better than our updated guidance from early January. Comp sales were 12% for the quarter and 13% for the full year. This compares with 9% comps in the fourth quarter last year and a 7% comp for the full year. This was led by a 14% comp increase for the Journeys Group, 13% comp increase for Lids group and an 8% comp increase for Johnston & Murphy in the fourth quarter. For the full year, all 3 of these business units achieved double-digit comp increases. 15% for the Journeys Group, 12% for the Lids group and 10% for Johnston & Murphy. February same-store sales increased 13%, and direct sales increased 4% on a comparable basis. Consolidated net sales for the quarter were $723 million, an increase of 29% over last year. This includes sales of $100 million from our Schuh [ph] U.K. acquisition in the second quarter of the year. Excluding Schuh [ph] U.K., sales increased 11% for the fourth quarter. We earned $1.97 per share in the quarter, adjusted as shown on the attachment to the press release, compared to last year's adjusted earnings per share of $1.33 or an increase of 48%. The adjusted tax rate this year came in lower than expected and represented approximately $0.13 per share of the EPS improvement. Gross margin for the quarter was 49.4% compared with last year's gross margin of 48.7%. This is 70 basis points -- this 70 basis point increase was better than expected. It was due to lower retail markdowns and favorable changes in sales mix in the quarter. Adjusting for all the items broken out in the…

Thanks, Jim. Let's now talk about Journeys where not a lot has changed over the past few quarters in terms of what's been driving the group's results. Current fashion trends continue to benefit the business. With another strong merchandise selection for spring, we feel good about the group's ability to capture additional market share. And like last year, carry the momentum into Back-to-School and the holidays. Similarly, these same merchandise trends resonated with the Shi by Journeys and Journeys Kidz customers in fiscal 2012, and should continue to fuel improved results for both concepts again this year. Let me highlight 3 important initiatives within Journeys for the coming year. First, we've been very pleased with the performance of our Journeys stores in Canada, which at year end totaled 13. To take advantage of our current momentum and fill the void we believe exists in this market, we plan to open another 12 Canadian Journeys stores this year. In addition to unit expansion, we believe there is also an opportunity to increase Canadian store productivity, which is one of the new initiatives that the Journeys team has redeployed talent to support. While there are many similarities between the U.S. and Canada, we have identified enough of a difference between the 2 markets that we believe we can capture upside by making specific adjustments to the Canadian merchandise offering. The second initiative involves leveraging the recent strength of the Journeys e-commerce business to introduce a broader merchandise selection, and continue to drive growth. Specifically, we will explore how to expand our assortment with our core vendors for product offered only on our e-commerce site and in our very largest brick-and-mortar footprints. Of course, given that e-commerce is integrated with all of our stores, the store associates will be able to sell off…

[Operator Instructions] We'll take our first question from Jeff Klinefelter with Piper Jaffray.

Couple of questions. One, maybe just to kick off on the Q1 comp. I mean, no doubt questions about the guidance and your anticipation for more of a mid-single digit comp in Q1. Can you just give a little bit more context around that? Is that purely just conservative guidance or is there something in the flow of the quarter from last year that would suggest it decelerates from double digits? The second part of that comp question would be, if you could remind us, Jim, on kind of the leverage point at this time on occupancy given your lease restructuring you've done in the last couple of years?

Jeff, we're -- February, as you know, everybody reported pretty good numbers yesterday. Those that come out monthly, a lot of reasons for driving that. The tax thing is very fuzzy, it's kind of hard to get your arms around what the release schedule is from the IRS. We went back and looked at a 2-year comp by month. And if you do 2-year comps for all of Genesco, February is tied with one other month for the easiest 2-year comp we've got. So that's the other thing that gives us caution. And so when we roll forward, we think the comps, just the math of it gets a little more challenging. We're very confident about the assortment. We like the trend we're on. We just don't think '13 is something we're going to be able to keep up. We'll see. Jim?

And Jeff, on the leverage point and the lease issue in general, we believe that our leverage point, as you know there are many variables on this. But our leverage point is around 2%. And we, last year, had in effect, touch leases whether it would be a new leases, renewals or whether they were kick out clause of about 270 of our leases. This year, we have more leases that are up for renewal, and it's about a 335, plus another potential 139 kick out opportunities. So we've got a lot of opportunities in front of us to renegotiate leases. And we feel very good about our running expense and ability to continue to leverage there.

Okay. And I believe that 2% has come down over the last couple of years, correct?

Yes. It's come down considerably. It used to be, let's say, around 4% at least. And with everything that's going on in the world, and really, that's more of a total leverage number. And we really made a lot of progress in rent as a result of our ability to renew leases. Depreciation, we have not been spending as much on the capital expenditures. And also, we've made a lot of progress in selling expenses. We've really done a good job in working with our stores, and we're seeing a lot of leverage in selling expenses also.

Okay. That's terrific. One other follow-up there on the comp-to-comp guidance for the year. At this point, is there any change anticipated in the mix of the pricing ASPs versus transactions? And then just on the NFL license, do you anticipate based on historic transitions of licensing in this category that you could see pretty significant acceleration to industry growth? Bob, it seems to us, looking back at the last time in this transition, there was very meaningful acceleration and growth overall in the category. I'm just wondering if any of that is considered in the guidance?

Yes. I'll do the ASP first. Jeff, we expect ASPs to be up considerably especially in the first half as we rolled through all the price increases that we're taken. And so -- as you know, we don't budget on that basis. We budget to $1 amount. And so we don't really sit back and try to figure out how much we're going to get from ASPs. So that's something we'll see as we roll forward, but we do expect that will be part of the equation. And therefore, we're obviously budgeting units to be less aggressive based on the ASP increase. On the NFL, we're very excited about the transition. Look, Reebok did a very nice job. They were great partners, but change for the sports fan is always a pretty good thing. And in the headwear category, with New Era involved, a, they do headwear very well and b, the brand means a lot. It's the most meaningful brand in the headwear category. And so that will, we think, be a big positive. And we're hopeful that we can take the NFL with our partnership with New Era to be more than just a seasonal event for the end of season product. As you know, we do baseball business 12 months and we'd love to see working with New Era, if we can stretch out the NFL. And then with Nike on jerseys, fresh and new is always good. It gives the fan a reason to renew what they've got in their closet. It's fairly natural when someone like Reebok is looking at the end of their contract that they're going to invest a little less. No criticism to Reebok, it's just a natural behavior. And so we're expecting a lot of newness on a relative basis to show up in the next year or 2 from Nike. So we're very excited by what that means. Now that said, we haven't gotten crazy with the comps. So the guidance is based on sort of more of a normalized comp. And as the NFL really does make a big splash, that's probably a source of upside.

We'll take our next question from Sam Poser with Sterne Agee.

It's Ben Shamshian [ph] for Sam Poser. Just had a question on the 53rd week, does your guidance include that?

Yes, we did. And our estimate of the impact of the third week is in the range of around $0.03 or $0.04. And that's included in the numbers.

Okay. And was that from a revenue standpoint?

Excuse me, that's an earnings standpoint.

From a revenue standpoint?

What do you mean -- we expected from an EPS standpoint to affect it $0.03 to $0.04. And yes, there's additional revenue, but there's also additional fixed cost in that additional week. So the impact we believe as a result of all those factors is about $0.03 to $0.04.

We'll take our next question from Robin Murchison with SunTrust.

Three questions here. One, I just wanted to get a little clarity on the Lids e-comm down 3%, anything behind that? Secondly, I wanted to get you to discuss product cost in the new year particularly leather, obviously in light of Dockers commentary as well. And then lastly, Jim, if you could just give us a little more color on where you are with the leases? I mean, you've got 335 stores up for renewal this year from 270 last year. Are you seeing the same kind of -- what kind of allowances are you getting directionally, how that looks, thanks?

Well, our product cost, the bigger driver right now for us is not as much leather cost as it is the labor and factory availability in China for our businesses. And again, most of what we do, Robin, as you know, is we're a branded business. So putting aside Johnston & Murphy and Dockers for the moment, we take the price increase from our suppliers. And we pass it on with usually a target margin that is the same as it was previously. So we don't have a lot of exposure there. And in Johnston & Murphy and Dockers, obviously, there in the situation where they're trying to time some price increases that marry to price increases all the way through the channel. So they're actually on the other side of that process. So we're going to be -- we'll see what happens as the year goes on. Obviously, the pressure, upward pressure on prices is there. On leases, we do have a good year for addressing a lot of leases. And other than the a malls, which do have -- are playing with a pretty good hand, we think we have pretty good leverage. And so we expect a continuation of the success we've had in the past at a minimum moderating rent increases. And certainly, down at the very bottom end of the mall universe continuing to capture some improvement.

Okay. And Lids e-commerce?

Lids e-commerce, I'd have to go back and look at it. It's a short month. And remember, we report e-commerce based on shipments, not on bookings. I'd have to go back and look at one month. I wouldn't make a lot out of it.

[Operator Instructions] We'll go next to Steve Marotta with CL King & Associates.

You mentioned, Jim, that there is no expected benefit from Underground Station and Journeys integration in fiscal '13. What would you expect the aggregate benefit would be in either '14 or just in general from an ongoing basis?

Steve, I'll start on that one. We'll see. I mean, there are a lot of wild card factors in how this will involve. How well the assortment resonates within Underground, whether we're exposed to any level of cannibalization with the Journeys stores that are in a lot of those. So we're optimistic, but we're not really going to go much further than saying it's in our guidance for this year. And beyond that, we'll see what happens. We're hoping for upside. I don't want to quantify it. Jim, any...

Exactly what I would have said.

Okay. Bob, a question for you. We spoke in the past regarding Lids comps not only benefiting from a strong fashion cycle, but also a bit from a decreasing supply in other options for potential buyers. Can you talk a little bit about how you see that currently playing out, as well for the balance of the year?

Well, the fashion cycle has obviously been a big friend of ours. And we all know that snapbacks are an important piece of that. We don't know how long snapback plays out. We're still doing extremely well in the category. Just a couple of notes on that. One, our exposure to it is not that high in the sense that as a non-fitted hat and as a very hot product, it actually represents a much smaller percent of our inventory than it does of our sales. And so in terms of having to manage inventory as a very hot trend winds down, we think that's going to be much easier than in other cycles. And the other thing about snapbacks is as it became important, we looked at what the kids weren't buying as they went into snapbacks. And it was heavily fitted New Era product from a variety of major league sports, mostly baseball and then also from action sports. And so those are categories that we're still in. So one scenario is if, when that trend eventually winds down, and it will, that the kids will go back to that or they go to the next big thing, which we don't know about right now, but we will be in that business as well. So that sort of comments about the fashion cycle. In terms of the consolidation in retail, it's very hard to measure. Our statements on that in the past have been based on our sales gains versus the increases that are being sort of bandied around by our vendors. And we know from those 2 numbers that we were gaining share. I don't know if that keeps going on, although the one thing that we're very certain of is that, in the locker room category, we are still going to be the aggressor in terms of trying to gain share there, both by opening stores and making further acquisitions. So we're now a driver of the consolidation of the industry, which we think is actually a very compelling story. So we're excited by that.

That's good. Last, housekeeping wise. For the first quarter, can you talk about the split in sales between February, March and April as a percent of the total quarter?

Yes. It's about -- April is the biggest month and it's -- and March is the lowest. So let's say roughly 33% in February drops down to 30% or so in March, and it's back up 35% to 40% in April.

We'll take our next question from Scott Krasik from BB&T Capital Markets.

Just a couple of questions. Bob, to clarify your comment about the ASP trend, the 6.7% increase in the fourth quarter, was that more related to pricing then rather than mix?

There is a lot going in the 6.7%. There is mix. I think it's mostly driven by the actual opening price. That's sort of -- we've said in the past that what the vendors have been passing through to us on a year-over-year basis have been ranging from mid-single digit to low-double digit. So with that as your benchmark on item pricing, then you can sort of back in. And you can see that most of it, therefore, is from initial price and then the balance would be mix.

As we anniversary that, now that your guidance have some visibility into what they're buying for fall, will mix continue to be a benefit for the back half of the year?

Don't know yet.

Okay. And then to the extent that you do comp a little bit better than your low-single digit expectation in the guidance, is there any additional investments necessary or should that really flow in better operating leverage?

No. That will flow through leverage. And just the point on investment, most of our buyers -- again, this is the benefit of being our size is if our financial budget is low singles, our buy plans will probably drift higher than that. Knowing that if it stays singles, that we have months to exit the inventory by working with our vendors and pushing out deliveries. And so we will be funding for a better performance than that and then we'll just keep watching it and react as needed.

And then in the back half for the year, if Nike does raise prices significantly on its NFL product the way it’s being projected, I'm not sure what New Era is doing, but could that actually bolster your margins during those seasons to better than they've ever been given all the other stuff?

Bolster gross margins?

Well, operating year more leverage, I guess, I would say.

Yes. I mean, if we sell the same number of units at a higher price point, that all flows through. Because it doesn't take us anymore operating expense to sell a jersey. That's sort of a fixed expense for us.

And that's not considered in the guidance?

All of this is in the guidance.

We'll take our next question from Mitch Kummetz with Robert W. Baird.

I've got, I think, 4 questions. Let me start on the store plan for 2013. I think you guys said you're going to open 100 and close 41. Could you break that out by concept? And then as far as the stores, the Underground stores, that don't overlap with Journeys from a real estate standpoint, I mean, how many of those are you looking to transition this year?

I'll do it while Jim gets his numbers out. On Underground, we don't have a fixed number on the plan. And the reason for that is, it's dependent in a lot of cases on a discussion with the landlord. Conversion, obviously, takes a greater level of investment. And if we're going to do that, we're going to need a lease that marries up to that better than what a lot of the leases currently have. So we'll see.

And just on that, Bob, in terms of the boxes at Underground, I mean, are those boxes about the size that you would like to see in terms of transitioning to a Journey store.

For the malls in which the Underground stores exist, the sizing is about where we'd want them to be, yes.

And Mitch, on the new stores, in the document that we filed earlier this morning, which is a longer version of my very brief comments, we break out the new stores by individual business units. But I'll give you the group right now. For total Journeys, it's 37 stores. And for Johnston & Murphy, it's 13. And for Schuh U.K., it's 8. And for Lids, it's 42.

And do you have the ones that you're closing in that document that you're referring to, Jim?

Yes. We've got 38 are in Journeys, the Journeys Group. No Schuh. Three units are in Johnston & Murphy. And right now, we don't have any in the Lids group.

Okay. And do you have any in the Underground piece of that or does that gets rolled into the Journeys?

That's all in the Journeys number.

Do you know how many are actually Underground within that?

We're just going to start, we're not -- we're just talking about the total group now. There's a good number in there, but we're not going into the details about how much because it's still up in the air.

I got you. And then in terms of the comp outlook, you provided 2% to 3% comp, maybe mid-singles on the first quarter. How do you see that breaking out by concept on the year?

By concept?

Yes.

It's really not that much different among the various concepts. In the case of Lids, it's probably on the higher end of that range. In the J&M group, the same thing. And then for Journeys, we're kind of in the lower end of that range. And it's pretty stationary for all 4 quarters.

Got it. Let's see, on your -- Jim, you made some sort of cautionary comments on the first quarter. Could you just talk to me about the earnings or the margin impact that you see Schuh having on the first quarter from the bonus accruals? And then just the weaker profitability in kind of the first half of the year versus the back half?

Yes. I tried to make that point in my prepared comments. But the issue is, and when we acquired I made this point and I'm going to make it again, in that -- the seasonality of the Schuh business, Schuh U.K. business and Journeys is very similar, except in the first half of the year. Journeys does better in the first quarter than Schuh does. And Schuh does worse, obviously, in the first quarter and does better in the second quarter. And so Schuh from a seasonal standpoint, is challenged in the first quarter, but that's magnified because of the contingent bonus accrual the we've got built in. So it's not going to contribute very much at all in the first quarter. And it's a combination of higher expenses from a fixed cost standpoint and the gross margin is not as strong as it is in the back half.

Okay. So you're basically just saying that there's no earnings contribution from Schuh in Q1 essentially?

I wouldn't comment that much.

Last thing. On the Lids Team Sports business, Bob, is there any way you could give us a sense as to how big that business was last year and sort of what was sort of growth expectations you're planning for that, the tickets baked into your guidance for 2013?

Yes. It was ballpark $100 million business last year. We're not driving the growth on it aggressively yet. We've said before, we're looking to reinvent how that business is done. A big component of that is systems [ph] development, which takes time. The other part of it was centralizing a lot of the capabilities that existed amongst the acquisitions. And that's taken a lot of work and time. And so we're somewhere around halfway through what we need to get done. And we're not going be really aggressively -- we are hiring some new reps, but we're not really sort of the way you would think about a retail chain and you've got it right and you're rolling it. We're not rolling it at this point until we get it. And that doesn't disturb us because it's tracking exactly the way, in terms of this reinvention of the business process, is tracking just the way we want it to go. And the reaction we're getting from the customer base is in total agreement with what we're doing. And so it's giving us a lot of confidence in the longer-term outlook.

We'll take our next question from Jill Caruthers with Johnson Rice.

If you could talk about following holiday 2012 after you fully integrated all the merchandise at the Underground by Journeys stores. How much of that merchandise would overlap? I'm trying to gain how similar those stores would look.

Well, we don't know yet. We're obviously buying for a much greater amount of overlap than we've had in the past. But there's going to be a little bit of figuring out as we go what the appropriate mix is within Underground. And so there'll be some testing. And in reaction to those tests will both be how well it does in Underground and whether it is drawing away from Journeys. So the initial set up that we're targeting to get going on this will have a lot of overlap, and then we'll start to distinguish which part of that makes a lot of sense. So beyond that, as we always do with forward trends on merchandise, we don't want to say a whole lot for competitive reasons. So think I'll leave it at that.

Okay. And then just talk about -- you did say that you have to evaluate the cannibalization of operating the 2 concepts in the same mall. Could you maybe talk about your options if you do, if that does occur as a big problem?

Well, we have a bunch of options. One is to adjust the merchandise with Underground to be more differentiated from Journeys, if that were the case. Our real goal is to create a presentation in Underground that just visually distinguishes the store from Journeys. Journeys being very teen oriented. And if you walk our Journeys stores, you'll know that it is a teenage store. And so our thesis is that there's an opportunity to get people in their 20s, who we know are buying the same assortment, but the store may not be right for them. And so that's what we're leaning towards. Our last option on those is the team at Underground did a fantastic job of shortening lease life. So in most of those instances, if we're really disappointed with what's going on by having 2 stores in the mall, we would have the option to go back to one.

Okay. I appreciate it. And then just last question, kind of a bookkeeping one. Given your strong outperformance in 2011, I know the bonus has gone up, kind of what are you modeling for 2012 bonus. And should we look for kind of a lower number year-over-year? Should that be a benefit based on your current guidance right now?

Yes, it is built -- Yes, we are anticipating a lower bonus. And as a result, it helps us from a leverage standpoint, okay. So it is part of the leverage factor.

We'll take our next question from Mark Montagna with Avondale Partners.

A few questions. First, just dealing with Lids Teams Sports and Clubhouse, Locker Room. I'm wondering for the past fiscal year, if you can just help us understand what the revenues were and what are your objectives for the new fiscal year for those 2 areas?

Well, we just talked about Team Sports, so it was about 100, and we're not aggressively growing that. Locker Room, we are going to be, and clubhouse, we're going be more aggressive in both of those. We have some businesses that we only had for partial year, that will be a full year. Jim, do you want to give anymore color that?

It's about the same range, about $100 million in sales.

Okay. So when you say more aggressive for Clubhouse, Locker Room is that more through acquisitions or through organic growth?

Well, growth. What we don't want to do on acquisitions, we don't commit on a forward basis to acquisitions. We always think that's a fool's game because then you feel committed to do it. So where we want to add stores, we've got new stores that we're going to open on our own on the books. And we have -- we're seeing lots of deal flows so there's possibilities for us to make acquisitions. But we'll only do them when the economics really make sense for us.

And in the new store growth that we talked about earlier, and it's posted of the Lids 42, about 12 of those are related to opening new Lids Locker Room stores.

Do you see those openings more off the mall or are you looking at those as more mall-type stores?

Right now, we're looking at mall. But off the mall is a very interesting premise for these because they are more of a destination store. And as such, the possibility, probably more so than most of our concepts for being off mall is an intriguing one.

Okay. And then in Team Sports, it sound like you're more focused on getting the organization, the operations correct before really aggressively trying to grow that.

Exactly right.

Okay. And just the next question, I only have 2 more. Next question, just in terms of Genesco, one of the push backs I get is, hey, this is just a boots store and when boots die, this is over. I mean, I disagree with that. But I'm just curious how do you respond to a question like that?

Look, we're the go to -- first of all, half our businesses is, we have a sports business, we have Johnston & Murphy, which is not that boot related. So you're only talking about half of our business. Within that half of that business, we are the go-to store for the teenager. And when they're in boots, we're going to be in the boot business. And when they're not buying boots, they're buying a lot of other stuff. And so we don't feel, from our perspective, that exposed to what they're claiming to be an outlier situation for us. I don't know what else to tell you.

And boot, really, is not a 4-quarter business. It's a fourth quarter business. So I don't understand that at all that position by anybody.

Okay. All right. Yes, I just wanted to hear how you guys would articulate it. Then just the last quick question is, with this whole Jeremy Lin phenomenon, I'm wondering if that has impacted the Lids business enough to actually be a meaningful difference in sales that you actually noticed or is it still perhaps just a rounding error.

It's a rounding error. It's an exciting rounding error. But you just can't get your hands on enough product to move -- if we had an unlimited access to product, it might be able to move the needle during this time. But you just can't get enough product.

Is it because a lack of Knicks product or is it targeted just to this one guy?

The kid came out of nowhere. So it takes a while to generate the amount of units that you need to move the needle. And so it's fun to watch and our New York stores have had a lot of fun with it. But that doesn't really move the needle. Lids Sports is a very big business.

Mark, one thing on the Locker Room it really -- Locker Room and Clubhouse is 17 stores, I said 12. So I just want to correct that.

We'll take our final question as a follow-up from Robin Murchison with SunTrust.

Jim, is there some -- does the Dockers license expire last year? And if so, what's going on with that?

It does expire this year, yes, FY '13. And so we're in our discussions with licenses. You periodically go through the discussion. We're in the discussion.

We'll make a point we've had that license since the early '90s. So it's a pretty long-term relationship.

And at this time, I'd like to turn the call back over to Mr. Dennis for any additional or closing remarks.

Thank you, everybody, for joining us. And we look forward to talking to you again, either on the road or in 3 months.

This concludes today's conference. We appreciate your participation.