Genesco (NYSE: GCO) and Kate Spade & Co (NYSE:KATE) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Risk & Volatility

Genesco has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Kate Spade & Co has a beta of 1.75, indicating that its stock price is 75% more volatile than the S&P 500.

Earnings & Valuation

This table compares Genesco and Kate Spade & Co’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genesco $2.85 billion 0.18 $184.95 million $3.53 7.12
Kate Spade & Co N/A N/A N/A $1.11 16.66

Genesco has higher revenue and earnings than Kate Spade & Co. Genesco is trading at a lower price-to-earnings ratio than Kate Spade & Co, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Genesco and Kate Spade & Co’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesco 2.43% 7.36% 4.34%
Kate Spade & Co 0.44% 1.11% 0.43%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Genesco and Kate Spade & Co, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 4 3 0 2.43
Kate Spade & Co 1 13 1 0 2.00

Genesco currently has a consensus target price of $32.67, indicating a potential upside of 29.89%. Kate Spade & Co has a consensus target price of $20.04, indicating a potential upside of 8.39%. Given Genesco’s stronger consensus rating and higher possible upside, analysts clearly believe Genesco is more favorable than Kate Spade & Co.

Insider and Institutional Ownership

94.4% of Genesco shares are held by institutional investors. Comparatively, 97.9% of Kate Spade & Co shares are held by institutional investors. 3.3% of Genesco shares are held by insiders. Comparatively, 0.8% of Kate Spade & Co shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Genesco beats Kate Spade & Co on 9 of the 11 factors compared between the two stocks.

About Genesco

Genesco Inc. is a retailer and wholesaler of footwear, apparel and accessories. The Company operates in five segments: Journeys Group, Schuh Group, Lids Sports Group, Johnston & Murphy Group and Licensed Brands. It relies on independent third-party manufacturers for production of its footwear products sold at wholesale. It sources footwear and accessory products from foreign manufacturers located in Bangladesh, Brazil, Cambodia, Canada, China, Dominican Republic, El Salvador, France, Germany, Hong Kong, India, Indonesia, Italy, Mexico, the Netherlands, Portugal, Peru, Romania, Taiwan and Vietnam. As of January 28, 2017, it operated 2,794 retail footwear, headwear and sports apparel and accessory stores and leased departments located primarily throughout the United States and in Puerto Rico, including 147 headwear and sports apparel and accessory stores and 87 footwear stores in Canada and 128 footwear stores in the United Kingdom, the Republic of Ireland and Germany.

About Kate Spade & Co

Kate Spade & Company is engaged in the design and marketing of a range of accessories and apparel. It operates through three segments. The KATE SPADE North America segment consists of the Company’s kate spade new york and JACK SPADE brands in North America. The KATE SPADE International segment consists of the Company’s kate spade new york and JACK SPADE brands in international markets, which operates principally in Japan, Asia (excluding Japan), Europe and Latin America). The Adelington Design Group segment primarily consists of exclusive arrangements to supply jewelry for the LIZ CLAIBORNE and MONET brands. In addition, the Adelington Design Group segment serves J.C. Penney Corporation, Inc. (JCPenney) through exclusive supplier agreements for the LIZ CLAIBORNE and MONET jewelry lines. As of December 31, 2016, it operated 98 the United States Specialty Retail Stores; 35 Foreign Specialty Retail Stores; 65 the United States Outlet Stores; 17 Foreign Outlet Stores, and 54 Concessions.

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