Genesco Q4 Earnings Miss Estimates, Journeys Sales Increase Y/Y

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]