Genesco(GCO) - 2025 Q3 - Quarterly Report

Sales Performance - Net sales increased 2.9% to $596.3 million in Q3 Fiscal 2025 compared to$579.3 million in Q3 Fiscal 2024, driven by a 6% increase in comparable sales[58] - E-commerce comparable sales rose by 15%, while same store sales increased by 4%[58] - Journeys Group net sales increased 3.8% to $362.5 million, with an 11$121.8 million, but operating income decreased by 43.1% to 3.1 million[78] - Johnston & Murphy Group net sales decreased 3.6% to 78.5 million, with a significant decline in operating income[80] - Genesco Brands Group's net sales increased by 10.2% to $33.5 million for Q3 Fiscal 2025 from$30.4 million in Q3 Fiscal 2024, driven primarily by increased sales of Levi's and Dockers footwear[83] - For the first nine months of Fiscal 2025, net sales decreased by 0.4% to $1.579 billion from$1.586 billion in the same period last year, impacted by decreased comparable store sales and net store closings[87] - Johnston & Murphy Group's net sales decreased by 5.4% to $228.7 million for the first nine months of Fiscal 2025, primarily due to decreased wholesale sales and a 3$338.7 million in the first nine months of Fiscal 2025, but total comparable sales decreased by 3%[97] - Genesco Brands Group's net sales decreased by 10.0% to $90.9 million for the first nine months of Fiscal 2025, primarily due to the repositioning of the business[102] Financial Metrics - Gross margin increased by 2.5$285.3 million, but as a percentage of net sales, it decreased from 48.1% to 47.8%[59] - Selling and administrative expenses rose by 2.8% to $274.9 million, but decreased as a percentage of net sales from 46.2$26.3 million U.S. valuation allowance due to uncertainty in realizing tax benefits[63] - The operating margin improved to 11.1% in Q3 Fiscal 2025 from a loss of 5.1% in Q3 Fiscal 2024, attributed to increased gross margin and decreased selling and administrative expenses[84] - The net loss for Q3 Fiscal 2025 was $18.9 million, or$1.76 diluted loss per share, compared to net earnings of $6.5 million, or$0.60 diluted earnings per share in Q3 Fiscal 2024[65] - The net loss for the first nine months of Fiscal 2025 was $53.3 million, or$4.90 diluted loss per share, compared to a net loss of $44.0 million, or$3.88 diluted loss per share, in the same period last year[94] Expenses and Cash Flow - Corporate and other expenses rose to $9.7 million in Q3 Fiscal 2025 from$7.8 million in Q3 Fiscal 2024, reflecting increased performance-based compensation[85] - Net interest expense decreased by 45.0% to $1.2 million in Q3 Fiscal 2025 compared to$2.2 million in Q3 Fiscal 2024 due to reduced average borrowings[86] - Corporate and other expenses for the first nine months of Fiscal 2025 were $27.2 million, down from$52.1 million in the same period of Fiscal 2024, reflecting a significant reduction in impairment charges[104] - Net interest expense decreased by 44.8% to $3.4 million in the first nine months of Fiscal 2025, compared to$6.2 million in the same period of Fiscal 2024, due to decreased average borrowings[107] - Cash used in operating activities increased by $5.6 million in the first nine months of Fiscal 2025, primarily due to a$54.8 million increase in cash flow from changes in accounts payable[109] - Cash used in investing activities was $22.3 million lower in the first nine months of Fiscal 2025 compared to the same period in Fiscal 2024, reflecting decreased capital expenditures[110] - Cash provided by financing activities increased by$7.3 million in the first nine months of Fiscal 2025, compared to the same period in Fiscal 2024, due to decreased share repurchases[111] Capital Expenditures and Debt - Total capital expenditures for Fiscal 2025 are expected to be approximately $45 million to$50 million, with 67% allocated for new stores and remodels[119] - As of November 2, 2024, the company had $96.1 million in U.S. revolver borrowings and$4.0 million related to GCO Canada ULC, remaining compliant with all credit facility terms[113] - Contractual obligations increased by 7% compared to February 3, 2024, primarily due to increased long-term debt[118] Tax Refunds - The company anticipates generating approximately $55 million of net tax refunds under the CARES Act, with$26 million received in Fiscal 2022[114]