Genesco(GCO) - 2026 Q2 - Quarterly Results

Fiscal 2026 Second Quarter Highlights Genesco exceeded expectations with positive comparable sales, though GAAP and Non-GAAP EPS declined Key Financial Metrics Genesco exceeded expectations with 4% net sales growth and positive comparable sales, despite lower GAAP and Non-GAAP EPS Q2 FY26 Key Financial Metrics | Metric | Q2 FY26 | Q2 FY25 | | :---------------- | :------ | :------ | | GAAP EPS | ($1.79) | ($0.91) | | Non-GAAP EPS | ($1.14) | ($0.83) | | Net Sales | $546 million | $525 million | | Comparable Sales | +4% | -2% | | Journeys Comp Sales | +9% | -1% | Management Commentary Management noted Journeys' strong comparable sales, raising revenue outlook while reiterating adjusted EPS guidance - Journeys achieved high-single digit comparable sales increase, driven by a strategic plan focused on product elevation, enhanced customer experience, and strengthened brand positioning, outperforming the market and increasing share[2] - The back-to-school season in the third quarter started very well, with Journeys showing positive comparable sales growth over last year's positive comps[2] - The company is raising its full-year revenue outlook due to Journeys' strong year-to-date performance, which is expected to offset additional gross margin pressure from higher tariffs and a promotional U.K. marketplace, while reiterating full-year adjusted EPS guidance of $1.30 to $1.70[4] Second Quarter Fiscal 2026 Financial Performance Net sales grew 4% driven by comparable sales, but gross margin and operating income declined Net Sales and Comparable Sales Net sales rose 4% to $546 million, driven by a 4% comparable sales increase led by Journeys Group's 9% growth Overall Sales Performance Q2 FY26 net sales increased 4% to $546 million, driven by 4% comparable sales growth, including 5% same-store sales Q2 FY26 Sales Performance Overview | Metric | Q2 FY26 | Q2 FY25 | Change | | :-------------------------- | :------ | :------ | :----- | | Net Sales | $546 million | $525 million | +4% | | Comparable Sales | +4% | (2)% | +6% pts| | Same Store Sales | +5% | (4)% | +9% pts| | Comparable E-commerce Sales | +1% | 8% | -7% pts| Comparable Sales by Group Journeys Group achieved 9% comparable sales growth, offsetting declines or minimal increases in other segments Q2 FY26 Comparable Sales by Group | Group | 2QFY26 Comparable Sales | 2QFY25 Comparable Sales | | :---------------------- | :---------------------- | :---------------------- | | Journeys Group | 9% | (1)% | | Schuh Group | (4)% | (2)% | | Johnston & Murphy Group | 1% | (5)% | | Total Genesco | 4% | (2)% | - The overall 4% sales increase was driven by a 6% increase at Journeys, 2% at Schuh, and 5% at Genesco Brands, partially offset by a 3% decrease at Johnston & Murphy[6] Gross Margin Gross margin decreased 100 bps to 45.8%, impacted by Schuh promotions and Genesco Brands' tariffs, partially offset by Johnston & Murphy Q2 Gross Margin Performance | Metric | Q2 FY26 | Q2 FY25 | Change (bps) | | :---------- | :------ | :------ | :----------- | | Gross Margin | 45.8% | 46.8% | -100 | - The decrease in gross margin was primarily due to increased promotional activity at Schuh and lower margins at Genesco Brands (related to license exits and tariffs), partially offset by increased margins at Johnston & Murphy (from price increases, lower retail markdowns, and sourcing optimization)[7] Selling and Administrative Expenses Selling and administrative expenses decreased 20 bps to 48.4% of sales, driven by lower occupancy costs, despite increased marketing Q2 Selling and Administrative Expenses | Metric | Q2 FY26 | Q2 FY25 | Change (bps) | | :-------------------------------- | :------ | :------ | :----------- | | Selling and Administrative Expenses | 48.4% | 48.6% | -20 | - The decrease in selling and administrative expenses as a percentage of sales primarily reflects decreased occupancy and other expenses, partially offset by increased marketing expense and an unfavorable comparison to a credit for certain non-income taxes last year[8] Operating Loss GAAP operating loss widened to $14.4 million (2.6% of sales) in Q2 FY26, with adjusted operating loss also increasing Q2 Operating Loss Summary | Metric | Q2 FY26 | Q2 FY25 | | :-------------------- | :-------- | :-------- | | GAAP Operating Loss | ($14.4 million) | ($10.3 million) | | GAAP Operating Margin | -2.6% | -2.0% | | Adjusted Operating Loss | ($14.3 million) | ($9.3 million) | | Adjusted Operating Margin | -2.6% | -1.8% | Income Tax Expense Effective tax rate was -15.0% in Q2 FY26; adjusted tax rate rose to 26.5% due to higher expected rate and valuation allowance Q2 Income Tax Rates | Metric | Q2 FY26 | Q2 FY25 | | :---------------- | :------ | :------ | | Effective Tax Rate | -15.0% | 15.2% | | Adjusted Tax Rate | 26.5% | 15.1% | - The higher adjusted tax rate for Q2 FY26 compared to Q2 FY25 reflects a higher expected tax rate for Fiscal 2026 due to the impact of the valuation allowance in certain jurisdictions. The divergence between effective and adjusted tax rates is due to income tax law changes under the OBBBA[10] Loss from Continuing Operations GAAP loss from continuing operations increased to $18.5 million ($1.79 per share), with adjusted loss also widening to $11.7 million Q2 Loss from Continuing Operations | Metric | Q2 FY26 | Q2 FY25 | | :-------------------------------- | :-------- | :-------- | | GAAP Loss from Continuing Operations | ($18.5 million) | ($9.9 million) | | GAAP EPS from Continuing Operations | ($1.79) | ($0.91) | | Adjusted Loss from Continuing Operations | ($11.7 million) | ($9.1 million) | | Adjusted EPS from Continuing Operations | ($1.14) | ($0.83) | Financial Position and Capital Activities Cash and debt decreased, while inventories rose 11% year-over-year, driven by Journeys, Schuh, and Johnston & Murphy Cash, Borrowings and Inventory Cash and total debt decreased, while inventories increased 11% year-over-year, driven by Journeys, Schuh, and Johnston & Murphy Cash, Borrowings and Inventory (YoY) | Metric | Aug 2, 2025 | Aug 3, 2024 | Change | | :---------- | :---------- | :---------- | :----- | | Cash | $41.0 million | $45.9 million | -10.7% | | Total Debt | $71.0 million | $77.8 million | -8.7% | | Inventories | $501.0 million | $450.2 million | +11.3% | - The 11% year-over-year increase in inventories reflects higher inventory levels at Journeys, Schuh, and Johnston & Murphy, partially offset by a decrease at Genesco Brands[12] Capital Expenditures and Store Activity Q2 FY26 capital expenditures were $15 million, with 9 stores opened and 12 closed, resulting in a 5% YoY store count decrease Q2 Capital Expenditures and Store Activity | Metric | Q2 FY26 | | :-------------------------- | :------ | | Capital Expenditures | $15 million | | Depreciation & Amortization | $13 million | | Stores Opened | 9 | | Stores Closed | 12 | | Total Stores (End of Q2) | 1,253 | | YoY Store Count Change | -5% | | YoY Square Footage Change | -3% | Share Repurchases No shares were repurchased in Q2 FY26, leaving $29.8 million available on the share repurchase authorization - No shares were repurchased during the second quarter of Fiscal 2026[14] - The company has $29.8 million remaining on its expanded share repurchase authorization announced in June 2023[14] Fiscal 2026 Outlook Genesco raised full-year sales and comparable sales outlooks, while reiterating adjusted diluted EPS guidance of $1.30 to $1.70 Fiscal 2026 Outlook Update | Metric | New FY26 Guidance | Prior FY26 Guidance | | :------------------------------------ | :---------------- | :------------------ | | Total Sales Growth | Up 3% to 4% | Up 1% to 2% | | Comparable Sales Growth | Up 4% to 5% | Up 2% to 3% | | Adjusted Diluted EPS (Continuing Ops) | $1.30 to $1.70 | $1.30 to $1.70 | - Guidance assumes no further share repurchases and a tax rate of 29% excluding the tax impact of OBBBA[15] Corporate Information Provides investor relations details, safe harbor statements, company overview, and contact information Investor Relations and Presentations Detailed Q2 results and presentations are available on the investor relations website, including upcoming conference calls and webcasts - Detailed financial commentary and a supplemental financial presentation of second-quarter results are available on the company's website in the investor relations section[16] - A live conference call was scheduled for August 28, 2025, at 7:30 a.m. (Central time), accessible via the company's website[16] - Genesco's management team will present at the Goldman Sachs 32nd Annual Global Retailing Conference on September 4, 2025, at 8:55 a.m. (Eastern Time), with an audio webcast available[17] Safe Harbor Statement This statement cautions that forward-looking results may differ materially due to market, economic, and operational risks, with no obligation to update - The release contains forward-looking statements regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, and cost reductions[18] - Actual results could vary materially from expectations due to factors such as weakness in store traffic, tariffs, ability to pass on price increases, operational restrictions, promotional activity, supply chain disruptions, fuel costs, foreign exchange rates, civil disturbances, and economic conditions[18][19] - Genesco undertakes no obligation to publicly release revisions to these forward-looking statements to reflect events or circumstances after the date of the release or the occurrence of unanticipated events[20] About Genesco Inc. Genesco Inc. is a footwear-focused company operating over 1,250 retail stores and e-commerce sites across distinct brands like Journeys and Johnston & Murphy - Genesco Inc. (NYSE: GCO) is a footwear-focused company with distinctively positioned retail and lifestyle brands and proven omnichannel capabilities, operating over 1,250 retail stores and branded e-commerce websites[21] - Key brands include Journeys, Little Burgundy, and Schuh (serving teens, kids, young adults in U.S., Canada, U.K.), Johnston & Murphy (premium footwear, apparel, accessories for affluent men and women in U.S., Canada), and Genesco Brands Group (licensed lifestyle footwear under brands like Wrangler, Dockers, Starter, PONY)[21] - Founded in 1924, Genesco is based in Nashville, Tennessee[21] Contacts Provides contact information for Genesco's financial and media inquiries - Financial Contact: Sandra Harris, SVP Finance, Chief Financial Officer, (615) 367-7578, SHarris2@genesco.com[22] - Media Contact: Claire S. McCall, (615) 367-8283, cmccall@genesco.com[22] Unaudited Financial Statements Presents detailed unaudited financial statements including operations, balance sheets, and segment performance Condensed Consolidated Statements of Operations (Q2) Presents unaudited condensed consolidated statements of operations for Q2 FY26 and FY25, detailing sales, margins, expenses, and net loss Condensed Consolidated Statements of Operations (Q2, in thousands) | Metric | Q2 FY26 (Aug 2, 2025) | Q2 FY25 (Aug 3, 2024) | | :------------------------------------ | :-------------------- | :-------------------- | | Net sales | $545,965 | $525,188 | | Gross margin | $249,949 (45.8%) | $245,639 (46.8%) | | Selling and administrative expenses | $264,265 (48.4%) | $255,135 (48.6%) | | Operating loss | ($14,440) (-2.6%) | ($10,274) (-2.0%) | | Loss from continuing operations | ($18,456) (-3.4%) | ($9,929) (-1.9%) | | Net Loss | ($18,471) (-3.4%) | ($9,992) (-1.9%) | | Diluted loss per share | ($1.79) | ($0.91) | Condensed Consolidated Statements of Operations (Six Months) Provides unaudited condensed consolidated statements of operations for the six months ended August 2, 2025, and August 3, 2024 Condensed Consolidated Statements of Operations (Six Months, in thousands) | Metric | Six Months FY26 (Aug 2, 2025) | Six Months FY25 (Aug 3, 2024) | | :------------------------------------ | :---------------------------- | :---------------------------- | | Net sales | $1,019,938 | $982,785 | | Gross margin | $471,130 (46.2%) | $461,920 (47.0%) | | Selling and administrative expenses | $513,300 (50.3%) | $502,966 (51.2%) | | Operating loss | ($42,585) (-4.2%) | ($42,402) (-4.3%) | | Loss from continuing operations | ($39,668) (-3.9%) | ($34,217) (-3.5%) | | Net Loss | ($39,698) (-3.9%) | ($34,339) (-3.5%) | | Diluted loss per share | ($3.82) | ($3.14) | Sales/Earnings Summary by Segment (Q2) Details Q2 FY26 and FY25 sales and operating income (loss) by segment: Journeys, Schuh, Johnston & Murphy, and Genesco Brands Sales/Earnings Summary by Segment (Q2, in thousands) | Segment | Q2 FY26 Sales | Q2 FY25 Sales | Q2 FY26 Operating Income (Loss) | Q2 FY25 Operating Income (Loss) | | :--------------------- | :------------ | :------------ | :------------------------------ | :------------------------------ | | Journeys Group | $318,189 | $298,846 | ($4,999) | ($11,151) | | Schuh Group | $126,595 | $124,561 | ($11) | $7,339 | | Johnston & Murphy Group| $68,789 | $71,037 | ($1,782) | ($403) | | Genesco Brands Group | $32,392 | $30,744 | $653 | $2,672 | | Net Sales | $545,965 | $525,188 | | | | Total Operating Loss | | | ($14,440) | ($10,274) | Sales/Earnings Summary by Segment (Six Months) Provides segment-wise sales and operating income (loss) breakdown for the six months ended August 2, 2025, and August 3, 2024 Sales/Earnings Summary by Segment (Six Months, in thousands) | Segment | Six Months FY26 Sales | Six Months FY25 Sales | Six Months FY26 Operating Income (Loss) | Six Months FY25 Operating Income (Loss) | | :--------------------- | :-------------------- | :-------------------- | :-------------------------------------- | :-------------------------------------- | | Journeys Group | $590,823 | $558,291 | ($20,282) | ($29,973) | | Schuh Group | $222,510 | $216,910 | ($6,142) | $1,443 | | Johnston & Murphy Group| $145,628 | $150,244 | ($1,282) | $1,952 | | Genesco Brands Group | $60,977 | $57,340 | $1,351 | $1,686 | | Net Sales | $1,019,938 | $982,785 | | | | Total Operating Loss | | | ($42,585) | ($42,402) | Condensed Consolidated Balance Sheets Presents unaudited condensed consolidated balance sheets as of August 2, 2025, and August 3, 2024, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | August 2, 2025 | August 3, 2024 | | :-------------------- | :------------- | :------------- | | Cash | $40,989 | $45,855 | | Inventories | $501,008 | $450,187 | | Total current assets | $645,891 | $606,720 | | Total Assets | $1,421,925 | $1,383,751 | | Total current liabilities | $414,355 | $395,663 | | Long-term debt | $57,677 | $77,839 | | Equity | $506,372 | $532,622 | | Total Liabilities and Equity | $1,421,925 | $1,383,751 | Store Count Activity Details store openings and closings by group (Journeys, Schuh, Johnston & Murphy) and total retail store count for various periods Store Count Activity (Total Retail Stores) | Group | Balance 02/03/24 | Open | Close | Balance 08/02/25 | | :---------------------- | :--------------- | :--- | :---- | :--------------- | | Journeys Group | 1,063 | 10 | 92 | 984 | | Schuh Group | 122 | 5 | 7 | 120 | | Johnston & Murphy Group | 156 | 7 | 14 | 149 | | Total Retail Stores | 1,341 | 22 | 113 | 1,253 | Comparable Sales (Detailed) Detailed comparable sales performance by group and channel, including same-store and e-commerce sales for Q2 and six months Comparable Sales Performance by Group and Channel | Metric | Q2 FY26 | Q2 FY25 | Six Months FY26 | Six Months FY25 | | :-------------------------- | :------ | :------ | :-------------- | :-------------- | | Journeys Group | 9% | -1% | 9% | -3% | | Schuh Group | -4% | -2% | -2% | -4% | | Johnston & Murphy Group | 1% | -5% | 0% | -4% | | Total Comparable Sales | 4% | -2% | 5% | -3% | | Same Store Sales | 5% | -4% | 5% | -6% | | Comparable E-commerce Sales | 1% | 8% | 4% | 6% | Non-GAAP Financial Reconciliations Reconciles GAAP to adjusted financial metrics, detailing non-recurring items and tax impacts Adjustments to Reported Loss from Continuing Operations (Q2) Reconciles Q2 GAAP loss from continuing operations to adjusted loss, detailing adjustments for severance, impairments, and OBBBA tax impacts Q2 Adjustments to Loss from Continuing Operations (in thousands, except per share) | Metric | Q2 FY26 (Aug 2, 2025) | Q2 FY25 (Aug 3, 2024) | | :-------------------------------------- | :-------------------- | :-------------------- | | Loss from continuing operations, as reported | ($18,456) ($1.79/share) | ($9,929) ($0.91/share) | | Severance (net of tax) | $88 ($0.00/share) | $512 ($0.05/share) | | OBBBA Tax Impact (net of tax) | $6,849 ($0.66/share) | — | | Adjusted loss from continuing operations | ($11,708) ($1.14/share) | ($9,131) ($0.83/share) | | Adjusted tax rate | 26.5% | 15.1% | Adjustments to Reported Loss from Continuing Operations (Six Months) Reconciles six-month GAAP loss from continuing operations to adjusted loss, outlining similar adjustments as the quarterly reconciliation Six Months Adjustments to Loss from Continuing Operations (in thousands, except per share) | Metric | Six Months FY26 (Aug 2, 2025) | Six Months FY25 (Aug 3, 2024) | | :-------------------------------------- | :---------------------------- | :---------------------------- | | Loss from continuing operations, as reported | ($39,668) ($3.82/share) | ($34,217) ($3.13/share) | | Distribution model transition (net of tax) | — | $1,327 ($0.12/share) | | Severance (net of tax) | $273 ($0.03/share) | $755 ($0.07/share) | | OBBBA Tax Impact (net of tax) | $6,849 ($0.66/share) | — | | Adjusted loss from continuing operations | ($33,238) ($3.20/share) | ($32,062) ($2.93/share) | | Adjusted tax rate | 26.6% | 23.2% | Adjustments to Reported Operating Income (Loss) and Gross Margin (Q2) Details Q2 adjustments to reported operating income (loss) and gross margin, including severance, asset impairments, and transition charges Q2 Adjustments to Operating Income (Loss) and Gross Margin (in thousands) | Metric | Q2 FY26 Operating Loss (Reported) | Q2 FY26 Operating Loss (Adjusted) | Q2 FY25 Operating Loss (Reported) | Q2 FY25 Operating Loss (Adjusted) | | :-------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Total Operating Loss | ($14,440) | ($14,316) | ($10,274) | ($9,327) | | % of sales | -2.6% | -2.6% | -2.0% | -1.8% | | Adjusted EBITDA | | ($842) | | $3,842 | | Gross margin, as reported | $249,949 (45.8%) | $249,949 (45.8%) | $245,639 (46.8%) | $245,808 (46.8%) | Adjustments to Reported Operating Income (Loss) and Gross Margin (Six Months) Reconciles six-month reported operating income (loss) and gross margin, including adjustments for distribution model transition and impairments Six Months Adjustments to Operating Income (Loss) and Gross Margin (in thousands) | Metric | Six Months FY26 Operating Loss (Reported) | Six Months FY26 Operating Loss (Adjusted) | Six Months FY25 Operating Loss (Reported) | Six Months FY25 Operating Loss (Adjusted) | | :-------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | | Total Operating Loss | ($42,585) | ($42,170) | ($42,402) | ($39,296) | | % of sales | -4.2% | -4.1% | -4.3% | -4.0% | | Adjusted EBITDA | | ($15,303) | | ($12,890) | | Gross margin, as reported | $471,130 (46.2%) | $471,130 (46.2%) | $461,920 (47.0%) | $463,670 (47.2%) | Adjustments to Forecasted Earnings from Continuing Operations (FY26) Reconciles forecasted FY26 GAAP earnings from continuing operations to adjusted forecasted earnings, including asset impairments and other adjustments FY26 Adjustments to Forecasted Earnings from Continuing Operations (in millions, except per share) | Metric | High Guidance FY26 | Low Guidance FY26 | | :------------------------------------- | :----------------- | :---------------- | | Forecasted earnings from continuing operations | $17.1 ($1.62/share) | $12.6 ($1.19/share) | | Asset impairments and other adjustments | $0.8 ($0.08/share) | $1.2 ($0.11/share) | | Adjusted forecasted earnings from continuing operations | $17.9 ($1.70/share) | $13.8 ($1.30/share) | | Forecasted tax rate | ~29% | ~29% |