UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Commission File No. 1-3083 Genesco Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Tennessee 62-0211340 (I.R.S. Employer Identification No.) 535 Marriott Drive 37214 Nashville, Tennessee (Address of principal executive offices) Registrant's telephone number, including area code: (615) 367-7000 Securities registered pursuant to Section 12(b) o ...

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Genesco Inc. (NYSE: GCO ) reported Q1 '26 (calendar Q1 '25) earnings results. It was a very mixed quarter. While comps were good for Journeys, gross profit did not follow, as the footwear being sold is increasingly expensiveLong-only investment, evaluating companies from an operational, buy-and-hold perspective.Quipus Capital does not focus on market-driven dynamics and future price action. Instead, our articles focus on operational aspects, understanding the long-term earnings power of companies, the compe ...

Financial Data and Key Metrics Changes - The company reported total revenue of $474 million for the first quarter, an increase of approximately 4% year-over-year, driven by a 5% growth in comparable sales, marking the third consecutive quarter of positive comps [34][35] - Adjusted gross margin for the quarter was 46.7%, a decline of 90 basis points compared to the previous year, primarily due to a shift towards higher price point but lower margin products [35] - Adjusted earnings per share loss improved by $0.05 year-over-year, with an adjusted diluted loss per share of $2.05 for the quarter compared to a loss of $2.10 last year [38][42] Business Line Data and Key Metrics Changes - Journeys led the business with comparable sales up 8%, while Schuh saw a 1% increase, and Johnston and Murphy experienced a 2% decline in comps [34][35] - The company noted that all channels posted positive growth, with store comps improving by 5% and direct comps increasing by 7% [34][36] - Schuh's digital capabilities and e-commerce business remained a key channel, with digital sales growth outpacing store sales in Q1 [19] Market Data and Key Metrics Changes - The consumer environment was described as choppy, with consumers showing a willingness to shop during specific events like Valentine's Day and Easter, but retreating during quieter periods [5][6] - The UK consumer remains selective, impacting the footwear category and overall purchases [19] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and strengthening its leadership in premium athletic footwear, with a significant increase in athletic sales contributing to overall growth [25][26] - The strategic growth plan for Journeys includes enhancing product assortments, improving customer experience through store remodels, and leveraging brand partnerships [24][29] - The company is actively mitigating tariff impacts by diversifying suppliers and sourcing from countries with lower tariffs, aiming to reduce dependence on China [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current trade environment and emphasized the importance of compelling footwear and freshness to motivate consumer purchases [8][9] - The company reaffirmed its full-year EPS guidance range of $1.30 to $1.70, despite acknowledging increased uncertainty in the external consumer environment [42][43] - Management highlighted the importance of the back-to-school and holiday shopping periods for driving sales and expressed optimism about the second half of the fiscal year [30][42] Other Important Information - The company ended the quarter with 1,256 total stores, having closed 26 stores and opened 4, resulting in a net reduction of 65 stores year-over-year [40] - Free cash flow for the quarter was negative $120 million, impacted by higher capital spending and inventory growth to meet consumer demand [39][40] Q&A Session Summary Question: Can you talk about the impacts of new athletic brand relationships on Q1 comps? - Management noted that existing brands drove the comp, but new brands like HOKA and Saucony had a positive impact, validating Journeys' position in lifestyle running [50][51] Question: How did the vulcanized product category perform? - Management acknowledged pressure on vulcanized products but stated that strength in other brands offset this pressure [53][54] Question: What are the expectations for Journeys in the back half of the year? - Management indicated that while they are lapping more difficult comparisons, they are optimistic about serving a broader market and continuing to strengthen product leadership [67][70] Question: How does the company view recent M&A activity in the footwear landscape? - Management expressed confidence in their positioning, focusing on lifestyle-driven offerings for the teen market, which differs from the performance-focused M&A activity [78][79] Question: What are the expectations regarding gross margins and price increases? - Management discussed the shift towards athletic products impacting margins but emphasized that they do not expect to absorb gross margin reductions due to tariffs [80][81]

Financial Data and Key Metrics Changes - The company reported total revenue of $474 million for Q1 2026, an increase of approximately 4% year-over-year, driven by a 5% growth in comparable sales, marking the third consecutive quarter of positive comps [30][31] - Adjusted gross margin for the quarter was 46.7%, a decline of 90 basis points compared to the previous year, primarily due to a shift towards higher price point but lower margin products [32] - SG&A expenses were 52.5% of sales, improving by 170 basis points year-over-year, driven by reduced occupancy and bonus expenses along with cost-saving initiatives [33] Business Line Data and Key Metrics Changes - Journeys led the business with comparable sales up 8%, while Schuh saw a 1% increase, and Johnston and Murphy experienced a 2% decline in comps [30][31] - Journeys' strong performance was attributed to a strategic focus on product assortment and brand partnerships, resulting in double-digit gains across several brands [14][23] - Schuh's comps increased due to improved brand access and digital capabilities, with over 40% of sales coming from e-commerce [18] Market Data and Key Metrics Changes - The consumer environment remains choppy, with consumers showing willingness to shop during key events but retreating during quieter periods [5][28] - The UK consumer market is under pressure, impacting Schuh's performance, while Johnston and Murphy faced challenges in factory store traffic [19][28] Company Strategy and Development Direction - The company is focused on diversifying its product offerings and strengthening its brand partnerships, particularly in the athletic category, to capture a broader teen market [22][23] - The strategic growth plan for Journeys includes enhancing product assortment, elevating customer experience through new store designs, and increasing brand awareness through marketing initiatives [26][68] - The company is actively mitigating tariff impacts by diversifying suppliers and adjusting inventory strategies [12][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current trade environment and emphasized the importance of compelling footwear and freshness to drive consumer purchases [7][10] - The company reiterated its full-year EPS guidance of $1.3 to $1.7, acknowledging ongoing macroeconomic uncertainties and the impact of tariffs [38][39] - Management expects positive comps for Journeys in Q2, despite challenges in other business segments [56][58] Other Important Information - The company ended the quarter with a negative free cash flow of $120 million, attributed to higher capital spending and inventory growth to meet consumer demand [36][37] - The company repurchased approximately 605,000 shares during the quarter, representing about 5% of its outstanding shares [37] Q&A Session Summary Question: Can you talk about the impacts of new athletic brand relationships on Q1 comp? - Management noted that existing brands drove the comp, but new brands like HOKA and Saucony had a positive impact, validating Journeys' position in lifestyle running [46][48] Question: How did vulcanized product trends compare to expectations? - Management acknowledged pressure on vulcanized products but stated that strength in other brands offset this pressure [50][51] Question: What is the guidance for Journeys in Q2? - Management indicated that Journeys is tracking similarly to Q1, with expectations for a positive comp, despite challenges in other segments [56][58] Question: What are the drivers for Journeys in the back half of the year? - Management highlighted the focus on product assortment, store remodels, and marketing initiatives as key drivers for growth [60][68] Question: How does the company view recent M&A activity in the footwear landscape? - Management stated that the company is positioned differently from competitors focused on performance athletic, emphasizing lifestyle and style-driven strategies [77][78] Question: What are the impacts on gross margin and balancing price increases? - Management explained that the shift to athletic products has affected margins, but they are working with brand partners to manage costs and maintain profitability [79][80]

Company Performance - Genesco reported a quarterly loss of $2.05 per share, slightly better than the Zacks Consensus Estimate of a loss of $2.09, and an improvement from a loss of $2.10 per share a year ago, indicating an earnings surprise of 1.91% [1] - The company posted revenues of $473.97 million for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 2.33% and showing an increase from year-ago revenues of $457.6 million [2] - Over the last four quarters, Genesco has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Outlook - Genesco shares have declined approximately 47.7% since the beginning of the year, contrasting with the S&P 500's gain of 1.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.81 on revenues of $531.05 million, while for the current fiscal year, the estimate is $1.47 on revenues of $2.34 billion [7] Industry Context - The Retail - Apparel and Shoes industry, to which Genesco belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Genesco's stock performance [5]

FY26 Q1 GENESCO Summary Results • June 4, 2025 Safe Harbor Statement This presentation contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as "intend, ...

Financial Performance - Net sales for Q1 FY26 were $474 million, a 4% increase compared to $458 million in Q1 FY25[6] - Comparable sales increased by 5%, with e-commerce sales up 7% and same-store sales up 5%[4] - GAAP EPS was ($2.02) and Non-GAAP EPS was ($2.05), compared to GAAP EPS of ($2.22) and Non-GAAP EPS of ($2.10) in the previous year[4] - Net sales for Q1 2025 were $473.973 million, a 3.0% increase from $457.597 million in Q1 2024[25] - Operating loss for Q1 2025 was $28.145 million, an improvement from a loss of $32.128 million in Q1 2024[25] - Net loss for Q1 2025 was $21.227 million, compared to a net loss of $24.347 million in Q1 2024, resulting in a basic loss per share of $2.02[25] Store Operations - The company opened 4 stores and closed 26 stores, ending the quarter with 1,256 stores, a 5% decrease from the previous year[15] - The company closed 26 stores in Q1 2025, resulting in a total of 1,256 retail stores[31] Margins and Expenses - Gross margin for Q1 FY26 was 46.7%, down from 47.3% in Q1 FY25, primarily due to changes in brand mix and promotional activity[9] - Selling and administrative expenses decreased by 170 basis points to 52.5% of sales compared to the previous year[10] - Gross margin decreased to 46.7% in Q1 2025 from 47.3% in Q1 2024, with a gross margin charge of $1.6 million related to a distribution model transition[25] - Reported gross margin for Q1 2025 was $221.181 million, representing 46.7% of sales, compared to $216.281 million and 47.3% in Q1 2024[40] - Adjusted gross margin for Q1 2025 was $221.181 million, or 46.7% of sales, down from $217.862 million and 47.6% in Q1 2024[40] Debt and Assets - Total debt increased to $121 million, up from $59.4 million year-over-year, primarily due to a 15% increase in inventories[14] - Total current assets increased to $633.314 million in Q1 2025 from $508.040 million in Q1 2024[29] - Total assets grew to $1.404591 billion in Q1 2025, compared to $1.307417 billion in Q1 2024[29] Future Projections - The company expects adjusted diluted EPS for FY26 to be in the range of $1.30 to $1.70, factoring in current tariffs[5] - Forecasted earnings from continuing operations for Fiscal 2026 range from $12.5 million ($1.17 per share) to $17.0 million ($1.61 per share) net of tax[42] - Adjusted forecasted earnings from continuing operations for Fiscal 2026 are estimated at $13.8 million ($1.30 per share) to $18.0 million ($1.70 per share) net of tax[42] - The forecasted tax rate for Fiscal 2026 is approximately 29%[42] - The share count for Fiscal 2026 reflects 10.6 million shares, including common stock equivalents[42] Share Repurchase - The company repurchased 604,531 shares for $12.6 million during the quarter, with $29.8 million remaining on its share repurchase authorization[16] Tax Rate - The effective tax rate for Q1 FY26 was 28.5%, compared to 26.7% in the same quarter last year[12]

Core Viewpoint - The market anticipates Genesco (GCO) will report a year-over-year decline in earnings despite an increase in revenues for the quarter ended April 2025, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Genesco is expected to report a quarterly loss of $2.14 per share, reflecting a year-over-year change of -1.9%, while revenues are projected to be $463.91 million, up 1.4% from the previous year [3]. - The consensus EPS estimate has been revised down by 7.74% over the last 30 days, indicating a reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that Genesco's Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.80%, suggesting a bearish outlook from analysts [12]. - Despite the negative Earnings ESP, Genesco holds a Zacks Rank of 2, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Genesco was expected to post earnings of $3.31 per share but delivered $3.26, resulting in a surprise of -1.51% [13]. - Over the past four quarters, Genesco has beaten consensus EPS estimates three times [14]. Market Reaction Factors - An earnings beat or miss may not solely dictate stock price movement, as other factors can influence investor sentiment [15]. - Betting on stocks expected to beat earnings expectations can increase the odds of success, making it important to check Earnings ESP and Zacks Rank before quarterly releases [16].

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