Genesco(GCO)2024-09-06 15:41Financial Data and Key Metrics - Consolidated revenue for Q2 was 9.3 million from 0.83 compared to 32 million, with inventories down 8% YoY [34] Business Line Performance - Journeys saw positive comps in July and August, driven by improved product assortment and strong back-to-school sales [7][13] - Schuh faced challenges due to a tough summer season, with increased promotional activity impacting gross margins [15][16] - Johnston & Murphy (J&M) experienced pressure from robust two-year comps and a softening men's premium non-athletic footwear market, but new product launches like Amherst 2.0 resonated well [17][18] - Genesco Brands Group achieved higher profitability despite lower sales, driven by a simplified license portfolio [20] Market Performance - Journeys' digital business grew double-digits, accounting for 22% of total retail sales [30] - Schuh maintained its position as the 10th largest footwear retailer in the UK, with digital sales representing nearly 40% of total sales [16] - J&M's apparel and accessories now represent almost half of its direct-to-consumer business, with strong performance in woven shirts, blazers, and bags [19] Strategic Direction and Industry Competition - The company is focused on improving Journeys' performance through product leadership, brand building, and enhancing the omnichannel experience [22][23] - Efforts to optimize the store footprint and reduce costs are ongoing, with 29 Journeys stores closed year-to-date and up to 50 potential closures expected this year [37] - The company is investing in store refreshes and new store concepts to enhance the customer experience, with a rollout planned for October [24][58] Management Commentary on Operating Environment and Future Outlook - The consumer remains selective, shopping primarily for key footwear items during peak periods like back-to-school and holidays [10] - The company expects continued challenges in non-peak shopping periods but remains optimistic about the holiday season [27][38] - Full-year guidance remains unchanged, with expected sales down 1% to 2% and adjusted gross margin down 10 to 20 basis points [41] Other Important Information - The company repurchased 382,000 shares for 42.8 million remaining under the current authorization [36] - Capital expenditures in Q2 were 45 million to $50 million in annualized cost savings by the end of fiscal 2025 [36] Q&A Session Question: Third quarter guidance and Journeys comp expectations - The company expects low single-digit consolidated comps, with Journeys also in the low single digits [45] - Positive comps are expected to continue into September and October, driven by improved product assortment and consumer demand [47][48] Question: Holiday season and newness in the boot category - The company has diversified its assortment to include both athletic and casual styles, with strength in multiple brands [50] - While boots are not expected to drive significant growth, there are early signs of traction in some boot brands [51] Question: Serving the teen girl consumer - The company is focusing on refining its assortment, marketing, and store environment to better serve the teen girl demographic [53][54] - Efforts include updated segmentation, premium brand offerings, and enhanced in-store experiences [55] Question: Store refresh and new concept rollout - A store refresh will be completed before the holiday season, with a new store concept rollout starting in October [57][58] - The new concept emphasizes product visibility, flexibility, and a modern aesthetic while maintaining Journeys' youthful energy [59] Question: Johnston & Murphy marketing and brand trends - J&M's marketing campaign highlights the brand's evolution into casual and comfortable styles, with a focus on new product launches and innovation [62][64] - The company is seeing strong interest in diversified footwear styles and higher average selling prices [66][67]