Genesco (NYSE:GCO) & Fossil Group (NASDAQ:FOSL) Critical Survey

Fossil Group (NASDAQ:FOSL) and Genesco (NYSE:GCO) are both small-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Fossil Group and Genesco, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fossil Group	1	0	1	0	2.00
Genesco	1	3	0	1	2.20

Fossil Group currently has a consensus target price of $5.00, indicating a potential upside of 138.10%. Genesco has a consensus target price of $30.00, indicating a potential downside of 7.22%. Given Fossil Group’s higher probable upside, equities research analysts clearly believe Fossil Group is more favorable than Genesco.

Insider and Institutional Ownership

61.1% of Fossil Group shares are held by institutional investors. Comparatively, 94.5% of Genesco shares are held by institutional investors. 7.8% of Fossil Group shares are held by insiders. Comparatively, 23.1% of Genesco shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Fossil Group and Genesco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fossil Group	$1.08 billion	0.10	-$102.67 million	($1.11)	-1.89
Genesco	$2.36 billion	0.15	-$18.89 million	($2.44)	-13.25

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

Risk & Volatility

Fossil Group has a beta of 2.17, indicating that its share price is 117% more volatile than the S&P 500. Comparatively, Genesco has a beta of 2.23, indicating that its share price is 123% more volatile than the S&P 500.

Profitability

This table compares Fossil Group and Genesco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fossil Group	-5.49%	-12.07%	-2.27%
Genesco	-1.03%	1.75%	0.65%

Summary

Genesco beats Fossil Group on 11 of the 15 factors compared between the two stocks.

About Fossil Group

Fossil Group, Inc., together with its subsidiaries, designs, develops, markets, and distributes consumer fashion accessories in the United States, Europe, Asia, and internationally. The company’s products include traditional watches, smartwatches, jewelry, handbags, small leather goods, belts, and sunglasses. It also manufactures and distributes private label brands, as well as branded products purchased for resell in other branded retail stores. The company offers its products under its proprietary brands, such as FOSSIL, SKAGEN, MICHELE, RELIC, and ZODIAC; and under the licensed brands, including ARMANI EXCHANGE, DIESEL, DKNY, EMPORIO ARMANI, KATE SPADE NEW YORK, MICHAEL KORS, TORY BURCH, and Skechers. The company sells its products through company-owned retail and outlet stores, department and specialty retail stores, mass market stores, e-commerce sites, licensed and franchised FOSSIL retail stores, and retail concessions, as well as sells its products on airlines. The company was formerly known as Fossil, Inc. and changed its name to Fossil Group, Inc. in May 2013. Fossil Group, Inc. was founded in 1984 and is headquartered in Richardson, Texas.

About Genesco

Genesco Inc. operates as a retailer and wholesaler of footwear, apparel, and accessories in the United States, Puerto Rico, Canada, the United Kingdom, and the Republic of Ireland. The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Genesco Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. Its Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear, as well as sells footwear through e-commerce. The Johnston & Murphy Group segment involved in the retail and e-commerce operations; and wholesale distribution of men’s dress and casual footwear, apparel, and accessories, as well as women’s footwear and accessories. Its Genesco Brands Group segment markets footwear under the Levi’s, Dockers, and G.H. Bass brands for men, women, and children, as well as designs and manufactures the STARTER brands footwear. The company operates through Journeys, Journeys Kidz, Schuh, Little Burgundy, and Johnston & Murphy brand names; and e-commerce websites, including journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, littleburgundyshoes.com, johnstonmurphy.ca, nashvilleshoewarehouse.com, and dockersshoes.com. Genesco Inc. was incorporated in 1934 and is headquartered in Nashville, Tennessee.