Store Operations - The company operated 1,410 retail stores at the end of Fiscal 2023, down from 1,425 in Fiscal 2022, with a net closure of 43 stores during the year [21]. - The Journeys Group accounted for 60% of the company's net sales in Fiscal 2025, operating 1,006 stores and closing a net of 57 stores [26][27]. - The Schuh Group represented 21% of net sales in Fiscal 2025, with 124 stores and a net opening of 2 stores during the year [28][29]. - Johnston & Murphy Group accounted for 14% of net sales in Fiscal 2025, operating 148 retail shops and closing a net of 8 stores [30][31]. - The Genesco Brands Group segment accounted for 5% of net sales in Fiscal 2025, focusing on licensed footwear under various brand names [33]. - The company aims to optimize its store footprint, potentially reducing overall square footage while improving productivity in existing locations [23]. Financial Performance - As of March 1, 2025, the company's wholesale operations had a backlog of approximately $57.1 million, an increase from $49.0 million in the previous year [38]. - The business is seasonal, with peaks in working capital investment during spring and fall, and a significant portion of net sales generated in Q4 [64]. Employee and Culture - The company employs approximately 18,000 individuals, with 70% part-time and 30% full-time as of February 1, 2025 [43]. - The company has a strong promote-from-within culture and focuses on relevant training and development for employees [52]. - The board of directors comprises 67% diverse members as of February 1, 2025 [63]. Corporate Responsibility and Ethics - The company is committed to corporate responsibility initiatives, including sustainability practices and reducing environmental impact [39][41]. - The company is committed to responsible sourcing practices and works with vendors who share its ethical standards [53]. - The company published a comprehensive human rights policy in 2021, guided by international standards [54]. - The company engages in community outreach initiatives, supporting underserved communities through various programs [61]. Security and Compliance - Significant investments have been made to improve information security, including end-to-end encryption and multi-factor authentication [57]. - The company complies with complex regulatory standards like GDPR and CCPA, ensuring the protection of personal data [59]. - The company is involved in environmental proceedings related to former manufacturing operations, addressing compliance with health and safety regulations [66]. Strategic Initiatives - The company has established a strategy focused on six pillars to drive growth and sustainable profitability, including digital acceleration and product innovation [23]. - The company files reports with the SEC, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q [75].

Group 1 - The investment strategy focuses on long-only investment, evaluating companies from an operational and buy-and-hold perspective, rather than market-driven dynamics [1] - The articles emphasize understanding the long-term earnings power of companies and the competitive dynamics within their industries [1] - The majority of recommendations will be holds, indicating a cautious approach to market conditions and a belief that only a small fraction of companies are suitable for buying at any given time [1] Group 2 - The articles aim to provide important information for future investors and introduce a healthy skepticism towards a generally bullish market [1] - There is a clear distinction made between the author's opinions and professional investment advice, highlighting the need for readers to conduct their own due diligence [2][3]

Core Insights - Genesco Inc. reported mixed fourth-quarter fiscal 2025 results, with both top and bottom lines lagging behind the Zacks Consensus Estimate, although both metrics increased year over year [1][2] Financial Performance - Adjusted quarterly earnings were $3.26 per share, underperforming the Zacks Consensus Estimate of $3.31, but representing a 25.9% increase from $2.59 in the prior-year period [3] - Net sales rose 0.9% year over year to $745.9 million, falling short of the Zacks Consensus Estimate of $785 million, driven by a 5% increase at Journeys, offset by declines at Schuh (3%), Johnston & Murphy (6%), and Genesco Brands (12%) [4] - Comparable sales increased by 10% year over year, with e-commerce comparable sales rising 18% and same-store sales up 6%, though impacted by a 53-week calendar shift and net store closures [5] Margin and Cost Analysis - Gross profit increased 2.2% year over year to $349.6 million, with gross margin expanding 60 basis points to 46.9%, primarily due to reduced markdowns at Journeys and higher margins at Genesco Brands and Johnston & Murphy [7] - Selling and administrative costs decreased 0.6% to $301.8 million, with the percentage of sales falling 60 basis points to 40.5%, driven by lower occupancy costs and reduced selling salaries [8] - Adjusted operating income rose to $47.9 million from $38.5 million in the prior-year quarter, with adjusted operating margin increasing 120 basis points to 6.4% [9] Financial Snapshot - As of the end of the quarter, the company had approximately $34 million in cash, no long-term debt, and $547 million in shareholders' equity, with inventories increasing 12.2% year over year to $425.2 million [10] - The company repurchased 399,633 shares for $9.8 million throughout fiscal 2025, with $42.3 million remaining under the share repurchase authorization [11] Store Update - Capital expenditure for the fiscal fourth quarter was $14 million, primarily for retail stores and digital initiatives, with four stores opened and 28 closed, resulting in a total of 1,278 stores, a 5% decrease year over year [12] Outlook - For fiscal 2026, the company expects overall comparable sales to increase by 2-4%, with total sales projected to be flat to up 1% year over year, factoring in negative impacts from foreign exchange and store closures [15] - Gross margin is expected to decline by 20-30 basis points, while SG&A expenses as a percentage of sales are anticipated to leverage 50-70 basis points due to cost-saving initiatives [17] - Adjusted earnings per share from continuing operations are projected between $1.30 and $1.70, with capital expenditure expected to be between $50 million and $65 million [18]

Financial Data and Key Metrics Changes - The company reported revenue of $746 million for Q4 2025, an increase of approximately 1% despite having one less week of sales compared to the previous year [33] - Adjusted EPS for the quarter was $3.26, up from $2.59 in the prior year, reflecting a 26% increase [11][41] - Comparable sales increased by 10%, with store sales up 6% and direct-to-consumer sales up 18% [34] - For the full year, comparable sales returned to positive territory, rising 3% [13] Business Line Data and Key Metrics Changes - Journeys led the performance with comparable sales up 14% in Q4, driven by strong full-price selling and improved product offerings [34][10] - Schuh's sales remained relatively flat in a challenging UK market, with comparable sales improving from down high single digits in Q1 to up low single digits in Q4 [22][24] - Johnson and Murphy faced headwinds with flat comparable sales in Q4, but new product introductions performed well during the holiday season [26][27] Market Data and Key Metrics Changes - The consumer environment remains choppy, with consumers showing willingness to shop during key events but retreating otherwise [8] - Digital sales for Schuh accelerated to over 40% of the business, indicating resilience in the face of market challenges [23] Company Strategy and Development Direction - The company aims to build on the momentum achieved in fiscal 2025, focusing on store improvement, investment growth, and higher productivity [29] - Key strategic pillars include accelerating digital growth, maximizing the relationship between physical and digital channels, and intensifying product innovation [55][56] - The company plans to invest in Journeys' brand positioning and customer experience, targeting a broader customer base, particularly the teen girl demographic [58][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the start of fiscal 2026, despite navigating a fluid external environment [29] - The company expects overall comparable sales to increase by 2% to 4% in fiscal 2026, with stronger performance anticipated in the first half [46][50] - Management acknowledged challenges such as store closures and foreign exchange pressures but remains confident in the strategic positioning of the business [84][46] Other Important Information - The company closed 63 stores during the year, representing 6% of the fleet, which was accretive to operating income [37] - Capital investments in Q4 were $14 million, primarily directed towards retail stores and digital initiatives [43] - The company achieved a clean inventory position, up 12% from last year, as it adjusted distribution models [42] Q&A Session Summary Question: Can you elaborate on the macro environment and February's performance? - Management noted that February was a roller coaster with weather impacts but highlighted strong consumer turnout during key shopping events like Valentine's Day [75] Question: What is the outlook for Journeys' comparable sales in fiscal 2026? - Management expects positive comps for Journeys in the first half, with a focus on store optimization and a strong product assortment [82][84] Question: How will the strategic pillars impact the business this year? - Management emphasized that the strategic pillars are part of a longer-term plan, with immediate benefits expected from product elevation and customer engagement initiatives [88][90] Question: What is the margin outlook for 2026? - Management indicated that gross margins may face pressure in the first half due to product mix shifts and inflationary impacts, but they expect to recapture margins over time [106]

Core Viewpoint - Genesco reported quarterly earnings of $3.26 per share, missing the Zacks Consensus Estimate of $3.31 per share, but showing an increase from $2.59 per share a year ago, indicating a -1.51% earnings surprise [1] Financial Performance - The company posted revenues of $745.95 million for the quarter ended January 2025, missing the Zacks Consensus Estimate by 4.96%, but showing an increase from $738.95 million year-over-year [2] - Over the last four quarters, Genesco has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - Genesco shares have declined approximately 24.2% since the beginning of the year, contrasting with the S&P 500's decline of -2.4% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is -$1.41 on revenues of $462 million, while for the current fiscal year, it is $2.35 on revenues of $2.41 billion [7] - The estimate revisions trend for Genesco is currently favorable, leading to a Zacks Rank 1 (Strong Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The Retail - Apparel and Shoes industry, to which Genesco belongs, is currently in the top 17% of over 250 Zacks industries, indicating a favorable outlook for stocks within this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Genesco's performance [5]

Financial Performance - Fourth quarter net sales increased 1% to $746 million compared to $739 million in Q4 FY24, with comparable sales up 10%[5] - GAAP EPS for the fourth quarter was $3.06, compared to $1.84 last year, while Non-GAAP EPS was $3.26, up from $2.59[5] - Full year net sales for Fiscal 2025 were flat at $2.3 billion, with total comparable sales increasing 3%[16] - Net sales for Q4 2025 reached $745.9 million, a slight increase from $738.9 million in Q4 2024, representing a growth of 1.4%[34] - For the fiscal year 2025, net sales totaled $2.33 billion, slightly up from $2.32 billion in fiscal year 2024[36] - Total net sales for Fiscal Year 2025 reached $2,325,062, a slight increase from $2,324,624 in Fiscal Year 2024[40] Profitability Metrics - Gross margin for the fourth quarter was 46.9%, up 60 basis points from 46.3% last year, driven by lower markdowns at Journeys[11] - Operating income for Q4 2025 was $46.1 million, up 23.5% from $37.3 million in Q4 2024, reflecting a stronger operational performance[34] - Earnings from continuing operations increased to $33.6 million in Q4 2025, compared to $20.3 million in Q4 2024, marking a growth of 65.5%[34] - Adjusted EBITDA for Q4 2025 was $60,866,000, which is 8.2% of sales, compared to $52,510,000 or 7.1% of sales in Q4 2024[56] - For the fiscal year ended February 1, 2025, total operating income was $18,910,000, up from $16,780,000 in the previous fiscal year[59] - The gross margin for the fiscal year ended February 1, 2025, was reported at $1,096,813,000, or 47.2% of sales, slightly down from 47.3% in the prior year[60] Cost Management - Selling and administrative expenses decreased to 40.5% of sales in Q4 FY25 from 41.1% last year, reflecting cost savings initiatives[12] - The company achieved total expense savings of $45 to $50 million through its cost reduction program initiated in Fiscal 2024[26] - The company ended the fourth quarter with zero total debt, down from $34.7 million at the end of the previous year[23] Store Operations - The company closed 28 stores during the fourth quarter, resulting in a total of 1,278 stores, a decrease of 5% year-over-year[24] - The total number of retail stores decreased to 1,278 by February 1, 2025, down from 1,341 a year earlier[44] Segment Performance - The Journeys Group accounted for 64.1% of total sales in Q4 2025, up from 61.6% in Q4 2024, highlighting its dominant market position[38] - The Schuh Group's sales decreased to $141.2 million in Q4 2025 from $146.1 million in Q4 2024, a decline of 3.5%[38] - Genesco Brands Group reported an operating income of $1.4 million in Q4 2025, recovering from an operating loss of $0.3 million in Q4 2024[38] - Operating income for the Journeys Group improved to $26,345, compared to $11,072 in Fiscal Year 2024, marking a significant increase[40] - The Journeys Group reported operating income of $43,152,000 in Q4 2025, an increase from $32,337,000 in Q4 2024[56] - The Schuh Group's operating income increased to $5,637,000 in Q4 2025 from $9,325,000 in Q4 2024[56] - Corporate and Other segment reported an operating loss of $8,873,000 in Q4 2025, compared to a loss of $9,013,000 in Q4 2024[56] Future Outlook - For Fiscal 2026, the company expects total sales to be flat to up 1%, with adjusted diluted EPS projected between $1.30 and $1.70[28] - The company anticipates continued focus on digital gains and market share expansion in the upcoming quarters[30] - The company forecasts earnings from continuing operations for fiscal 2026 to be between $13.2 million and $18.2 million, translating to a per share range of $1.18 to $1.61[62] - Adjusted forecasted earnings from continuing operations for fiscal 2026 are estimated to be between $14.6 million and $19.2 million, or $1.30 to $1.70 per share[62] Impairments and Adjustments - The company recorded a goodwill impairment charge of $28,453 in Fiscal Year 2024, which was not present in Fiscal Year 2025[40] - The company recorded total asset impairments and other adjustments of $1.0 million for high guidance and $1.4 million for low guidance in fiscal 2026[62] E-commerce Performance - E-commerce comparable sales rose 18%, representing 30% of total retail sales, up from 27% last year[5] - The company experienced a significant increase in comparable e-commerce sales, which rose by 12% for the fiscal year, compared to 8% in the previous year[48] - Comparable sales for the total company increased by 10% in Quarter 4 of Fiscal Year 2025, compared to a decline of 4% in the same quarter of the previous year[48]

Market Performance - The Nasdaq Composite and S&P 500 indexes gained 0.68% and 0.52% respectively, while the Dow Jones Industrial Average fell by 0.27% last week, indicating mixed market performance [1] - The manufacturing purchasing managers' index (PMI) for January was reported at 50.9%, up from 49.2% in December, suggesting expansion in manufacturing activities [2] Employment and Wages - U.S. nonfarm payrolls increased by 143,000 jobs in January, below the estimate of 169,000, indicating a slowdown in job market growth [2] - The unemployment rate was recorded at 4.0%, the lowest since May, while average hourly earnings increased by 0.5%, exceeding analysts' expectations of 0.3% [2] Trade Relations - The trade war between the U.S. and China remains a concern, with China imposing targeted tariffs on U.S. imports in response to President Trump's trade policies [3] Stock Performance and Recommendations - Versus Systems Inc. (VS) shares gained 16.6% since being upgraded to Zacks Rank 2 (Buy) on December 13, outperforming the S&P 500 [4] - Urban Outfitters, Inc. (URBN) saw an 11.6% return since its upgrade to Zacks Rank 1 (Strong Buy) on December 4 [5] - A hypothetical portfolio of Zacks Rank 1 stocks returned +22.3% in 2024, compared to +28% for the S&P 500 index [5] Focus List and Model Portfolios - Palantir Technologies Inc. (PLTR) gained 89.8% over the past 12 weeks, while Deere & Company (DE) returned 18.2% in the same period [11] - The Zacks Focus List portfolio returned +29.54% in 2023, outperforming the S&P 500 index [12] - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned +16.26% in 2024, compared to +24.89% for the S&P 500 index [15] Dividend Stocks - Intercontinental Exchange, Inc. (ICE) returned 6.7% over the past 12 weeks, while Quest Diagnostics Incorporated (DGX) increased by 3.9% [17] - The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +6.95% in 2024, underperforming the S&P 500 index [19] Long-term Performance - The Zacks Top 10 portfolio has produced a cumulative return of +1,998% since 2012, significantly outperforming the S&P 500 index's +461.86% [21]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Genesco (GCO) Analysis - Genesco (GCO) has shown a four-week price change of 3.7%, indicating growing investor interest [4] - Over the past 12 weeks, GCO's stock has gained 50.6%, with a beta of 2.37, suggesting it moves 137% higher than the market [5] - GCO has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - GCO has received upward revisions in earnings estimates, earning a Zacks Rank 1 (Strong Buy), which is associated with strong momentum effects [7] - The stock is trading at a Price-to-Sales ratio of 0.20, suggesting it is undervalued, as investors pay only 20 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides GCO, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify potential winning stocks based on various investing styles [9]

Core Insights - Genesco Inc. experienced a 10% increase in comparable sales for Q4 2024, driven by the holiday season [1][2] - The company upgraded its fiscal 2025 earnings guidance to a range of 80 cents to $1.00 per share, reflecting confidence in profitability [1][6] - The Zacks Consensus Estimate indicates a projected annual growth of 44.6% in earnings per share (EPS) for Genesco [11] Sales Performance - Comparable sales growth of 10% includes both physical stores and e-commerce, with same-store sales up 6% and e-commerce sales up 20% [2] - The Journeys Group led the sales growth with a 14% year-over-year increase, while the Schuh Group grew by 3%, and Johnston & Murphy Group saw a slight decline of 1% [3] Management Commentary - CEO Mimi E. Vaughn noted that sales at the Journeys Group exceeded expectations during the holiday season, attributed to strong full-price selling [4] - The success in sales has led to increased incentive compensation expenses and accelerated store closures as part of a strategy to optimize the retail footprint [5] Future Outlook - Genesco plans to leverage the success of the Journeys Group to drive growth in fiscal 2026, focusing on sustainable profitability through investments in digital platforms and cost optimization [7] - The company aims to enhance its core brands and align with consumer trends to strengthen its competitive position [9] Strategic Initiatives - Genesco is optimizing its store footprint and introducing modern designs to improve customer experience and brand perception [10] - The company’s strategic focus on digital marketing and customer engagement has amplified its reach among style-conscious consumers [9]

Core Viewpoint - In 2025, stocks are expected to rise due to Donald Trump's pro-growth plans, the Federal Reserve's interest rate policies, and a robust U.S. economy, with a focus on selecting stocks that exhibit strong earnings acceleration to capitalize on this trend [1]. Earnings Acceleration - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), indicating an increase in the quarter-over-quarter earnings growth rate within a specified timeframe [3]. - Stocks that demonstrate earnings acceleration are likely to experience a rally in share prices, as this metric highlights companies that have not yet attracted investor attention [4]. Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, with projected EPS growth rates for the upcoming quarter expected to surpass prior periods [6]. - Specific criteria include: - EPS % Projected Growth (Q1)/(Q0) must be greater than EPS % Growth (Q0)/(Q-1) [7] - EPS % Growth (Q0)/(Q-1) must be greater than EPS % Growth (Q-1)/(Q-2) [8] - Current Price must be greater than or equal to $5 and average 20-day volume must be greater than or equal to 50,000 [8]. Top Stocks Identified - Genesco Inc. (GCO) has a Zacks Rank 1 (Strong Buy) with an expected earnings growth rate of 44.6% for the current year [9]. - Lands' End, Inc. (LE) also holds a Zacks Rank 1, with an expected earnings growth rate of 373.3% for the current year [10]. - Mercury General Corporation (MCY) has a Zacks Rank 1 and an expected earnings growth rate of 1,583.3% for the current year [11].