Genesco (NYSE:GCO) and Xcel Brands (XELB) Critical Comparison

Genesco (NYSE: GCO) and Xcel Brands (NASDAQ:XELB) are both small-cap apparel & accessories retailers – nec companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Institutional & Insider Ownership



94.7% of Genesco shares are held by institutional investors. Comparatively, 20.2% of Xcel Brands shares are held by institutional investors. 3.3% of Genesco shares are held by insiders. Comparatively, 59.9% of Xcel Brands shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Genesco and Xcel Brands’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Genesco $2.87 billion 0.18 $97.43 million $3.55 7.11
Xcel Brands $32.75 million 1.44 $2.73 million $0.14 18.21

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Genesco and Xcel Brands, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesco 0 4 3 0 2.43
Xcel Brands 0 0 2 0 3.00

Genesco currently has a consensus target price of $32.71, indicating a potential upside of 29.56%. Xcel Brands has a consensus target price of $4.50, indicating a potential upside of 76.47%. Given Xcel Brands’ stronger consensus rating and higher probable upside, analysts clearly believe Xcel Brands is more favorable than Genesco.

Profitability

This table compares Genesco and Xcel Brands’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesco 2.43% 7.36% 4.34%
Xcel Brands 8.92% 2.34% 1.68%

Volatility & Risk

Genesco has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500. Comparatively, Xcel Brands has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Summary

Genesco beats Xcel Brands on 8 of the 14 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 Xcel Brands

Xcel Brands, Inc. is a brand development and media company. The Company is engaged in the design, production, licensing, marketing, and direct to consumer sales of branded apparel, footwear, accessories, jewelry, home goods, and other consumer products, and the acquisition of consumer lifestyle brands. The Company’s brand portfolio consists of the Isaac Mizrahi, Judith Ripka, H Halston, C Wonder and Highline Collective brands. The Company also manages and designs the Liz Claiborne New York brand (LCNY Brand). Isaac Mizrahi has over 150 different product categories, including sportswear, footwear, handbags, watches, eyewear, fragrance, tech accessories, intimates, bridal gowns and accessories, pet products, home and other merchandise. The Company’s Judith Ripka is a luxury jewelry brand. Wonder brand offers women’s clothing, footwear, jewelry and accessories; housewares, and home decor and gifts. The Liz Claiborne New York includes women’s apparel, footwear, outerwear and accessories.

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