GCO

Levi Strauss & Co. LEVI reported mixed third-quarter fiscal 2026 results, with earnings surpassing the Zacks Consensus Estimate but revenues falling short. The denim apparel maker benefited from tariff refunds, international expansion, wholesale strength and improved profitability. The company also raised its fiscal 2026 profit outlook. However, softer direct-to-consumer (DTC) traffic in the United States and Europe weighed on performance. Adjusted earnings of 48 cents per share topped the Zacks Consensus Estimate of 36 cents and increased 41.2% year over year. Revenues rose 4.3% to $1,610 million but missed the consensus estimate of $1,615 million. Organic revenues grew 5%, while DTC comparable sales increased just 0.4%. Levi Strauss & Co. price-consensus-eps-surprise-chart | Levi Strauss & Co. Quote Levi Strauss' DTC revenues increased 2% on both reported and organic bases, reflecting softer traffic across the United States and Europe. The channel contributed 45% of total revenues during the quarter. E-commerce revenues advanced 10%, reflecting continued digital momentum. U.S. DTC revenues declined 1%, while Europe's fell 2% on a reported basis. Management attributed the weakness to an underperforming back-to-school campaign in the United States and unusually warm weather across European markets. Meanwhile, global wholesale revenues increased 6%, supported by broad-based demand across regions and product categories. The Americas generated $839 million of revenues, up 4% on a reported basis and 2% organically. U.S. revenues declined 1%, while Latin America delivered 10% organic growth, supported by strength across channels and markets. Europe reported revenues of $442 million, up 4% on a reported basis and 5% organically. Double-digit wholesale growth supported regional performance despite weaker DTC traffic. Asia generated $293 million, increasing 5% on a reported basis and 10% organically. Momentum across Japan, India, Australia and China supported the region's growth. The Levi's brand registered 4% organic growth, supported by mid-single-digit gains across men's and women's businesses. Categories beyond denim bottoms contributed approximately half of quarterly organic revenue growth, highlighting the company's expanding lifestyle portfolio. Tops revenues increased 7%, with women's tops advancing 10%. The premium Blue Tab collection delivered strong double-digit growth, while Levi Strauss Signature grew 13%, aided by core denim and expanding lifestyle offerings. Beyond Yoga revenues increased 9% to $36 million, supported by growth across both distribution channels. Gross profit increased to $1.07 billion from $951.6 million in the year-ago quarter. Gross margin expanded 450 basis points to 66.2%, including a 370-basis-point net benefit from tariff refunds. Excluding this benefit, underlying gross margin expanded 80 basis points, supported by lower product costs and partly offset by foreign exchange pressures. Selling, general and administrative (S&G) expenses increased to $835.9 million from $775.6 million. Adjusted SG&A rose 6.2% to $817 million, primarily reflecting higher selling and distribution expenses. Adjusted EBIT increased 36% to $249 million, while adjusted EBIT margin expanded 370 basis points to 15.5%, including a 330-basis-point net tariff refund benefit. Notably, tariff refunds contributed 11 cents to adjusted earnings after reinvestment. Excluding this benefit, adjusted earnings increased approximately 9% year over year, supported by underlying margin expansion and share repurchases. Levi Strauss ended the quarter with cash and cash equivalents of $641 million and total liquidity of approximately $1.5 billion. Inventories declined 3% year over year, reflecting continued inventory management discipline. The company returned $61.6 million to shareholders through dividends, representing an 11% year-over-year increase. It also announced plans for an additional $100 million accelerated share repurchase program. The company declared a quarterly dividend of 16 cents per share, reflecting a 14% increase from the year-ago level. Management raised its fiscal 2026 adjusted earnings guidance to $1.54-$1.56 per share from $1.46-$1.52. The revised outlook includes an approximately 4-cent net tariff refund benefit. Adjusted EBIT margin is expected to reach about 12.1% compared with the previous 12% outlook. Gross margin is projected to expand 130 basis points year over year. Reported revenue growth is expected at approximately 7% compared with the earlier 7-7.5% range, reflecting foreign exchange headwinds. Organic revenue growth is projected at approximately 6%, the upper end of the previous guidance. For the fourth quarter, management anticipates reported and organic revenue growth of approximately 3% and 4%, respectively. Adjusted EBIT margin is expected to be between 11.4% and 11.6%, with adjusted earnings projected at 36-38 cents per share. Management expects DTC growth to recover to mid-single digits, supported by targeted marketing, stronger product assortments and improving traffic trends. LEVI Stock Past Three-Month Performance Image Source: Zacks Investment Research Shares of this Zacks Rank #3 (Hold) company have lost 18.2% over the past three months as compared with the industry's 6.2% decline. Genesco Inc. GCO is a Nashville-based specialty retailer and branded company. It sells footwear and accessories through retail stores. The company sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here. The Zacks Consensus Estimate for Genesco's current fiscal-year earnings indicates 62.1% growth from the year-ago actual. GCO delivered a trailing four-quarter average earnings surprise of 11.2%. Designer Brands Inc. DBI designs, produces and retails footwear and accessories. It offers shoes, boots, sandals, sneakers, socks, handbags and accessories. It currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for Designer Brands' current fiscal-year earnings and sales suggests growth of 225% and 0.6%, respectively, from the year-ago actuals. DBI delivered a trailing four-quarter average earnings surprise of 108.1%. Urban Outfitters, Inc. URBN is a lifestyle products and services company that sells fashion apparel, accessories, footwear, home goods and related offerings through a portfolio of global consumer brands. The company also holds a Zacks Rank of 2 at present. The Zacks Consensus Estimate for Urban Outfitters' current fiscal-year earnings and sales suggests growth of 14% and 9.5%, respectively, from the year-ago actuals. URBN delivered a trailing four-quarter average earnings surprise of 9.7%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Levi Strauss & Co. (LEVI) : Free Stock Analysis Report Urban Outfitters, Inc. (URBN) : Free Stock Analysis Report Genesco Inc. (GCO) : Free Stock Analysis Report Designer Brands Inc. (DBI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, Sept. 3, 2026 at 8:30 a.m. ET Board Chair, President, and Chief Executive Officer - Mimi Eckel Vaughn Senior Vice President, Finance and Chief Financial Officer - Jonathan Collins Senior Director of FP and A and Investor Relations - Darryl MacQuarrie Operator: Good day, everyone, and welcome to Genesco Second Quarter Fiscal 27 Conference Call. Just a reminder, today's call is being recorded. I will now turn the call over to Darryl MacQuarrie, Senior Director of FP and A and Investor Relations. Please go ahead, sir. Darryl MacQuarrie: Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal 27 results. During today's call, participants expect to make forward looking statements that reflect our expectations as of today. And actual results could differ materially. Genesco refers you to this morning's earnings release and the company's SEC filings, including its most recent 10 ks and 10 Q filings, for some of the factors that could cause actual results to differ the expectations reflected in the forward looking statements made today. We also expect to refer to certain adjusted financial measures during the call. All non GAAP financial measures are reconciled to their GAAP counterparts in the attachments to this morning's press release and in the schedules available on the company's website in the Quarterly Results section. Have also posted a presentation summarizing our results there as well. With me on the call today is Mimi Eckel Vaughn, board chair, president, and chief executive officer. And Jonathan Collins, Senior Vice President, Finance and Chief Financial Officer. Now I would like to turn the call over to Mimi. Mimi Eckel Vaughn: Thanks, Darryl. Good morning, everyone, and thank you for joining our second quarter fiscal 27 earnings call. Before I get into our results and progress on strategy and initiatives, I would like to start by welcoming Jonathan Collins, who joined Genesco in early August as our Chief Financial Officer. Jonathan brings more than 30 years of exceptional financial experience. His senior leadership roles in major global retail and e commerce businesses include CFO of Walmart Africa and CAO of India's Flipkart Group, and he was most recently chief financial officer of America's Car Mart. Jonathan's public company leadership multichannel retail experience and capital markets expertise make him a strong fit for Genesco as we continue executing our footwear first strategy and generating shareholder value. I am confident he will be an excellent partner to me, our leadership team, and the board as we drive our next phase of growth. Welcome, Jonathan. Jonathan's arrival along with our appointment of Tomas Petersson as president of Schuh, following Colin Temple's retirement, which I will touch on in more detail shortly, reflect our strong belief in the direction we are headed and our determination to keep accelerating our progress. Turning now to Q2, I am very pleased to report that we delivered bottom line results that were significantly better than last year and well ahead of our expectations with every business achieving gains versus plan. The quarter once again highlights that our strategy is working and our momentum is building. We have been taking considerable action to respond to changes in a dynamic consumer environment and successfully evolve our business and Q2 provides clear proof of our continued progress. Earnings improvement came from strong execution evidenced by higher gross margin recapture more full price selling, higher ticket and conversion, better store productivity, and more disciplined expense management. This is the earnings leverage we set out to build this year and we are increasingly confident that it reflects positive structural improvement or a higher quality, more profitable business. While we did in Q2 receive a substantial portion of the tariff refunds we applied for, which Jonathan will detail later, this is not included in the adjusted numbers we are reporting. Our sharp execution drove meaningful earnings improvement even in this lower volume sales quarter and with a lower sales base. As anticipated, the decline in sales was driven by 3 shorter term headwinds tied to strategic actions we are taking to improve our business. Namely continued store closures as we optimize our fleet the license transition ahead of the Wrangler launch, and our intentional pullback on discounting and promotional activity at Schuh. These actions are in pursuit of a healthier more profitable business over time. As we move past these events, we expect sales trends will improve and we remain confident the consumer facing initiatives underway position us well for future growth. Importantly, both Journeys and Johnston and Murphy posted positive comparable sales in the quarter, continuing their ongoing streaks of consecutive gains with the overall company comp reflecting the reduced discounting at Schuh and corresponding impact on sales. The consumer backdrop has not changed materially from what we described last quarter. Our customer remains selective and intentional They shop with purpose when there is a reason and they do not when there is not. And they are willing to pay up when we deliver the right product. What continues to stand out is that compelling product and newness are winning. We have the right assortments, Our customer is responding and notably buying at full price. The back to school read in Q3 so far is another encouraging example. After robust spring selling, the consumer turned as usual to summer activities other than shopping. Since then, Journeys has accelerated to a mid single digit comp in August on top of its second most challenging well into the double digits monthly 2 year stack. Johnston and Murphy has also seen a notable uptick in interest in its recently dropped fall offering. This gets us off to a good start for the back half. Our goal is to extend the momentum of the last year and a half and continue to gain market share, even as footwear industry dynamics remain challenged. And with that, let me now provide more color by business on the second quarter and the actions underway to deliver the back half starting with retail. In Q2, Journeys delivered its eighth consecutive quarter of positive comparable sales on top of strong growth a year ago, extending the positive transformation story for the style led teen, which is 1 of the most important proof points of our strategy. Both store and e commerce comps were positive. Journeys merchant team continues to do an excellent job building on its elevated assortment across athletic and casual, achieving higher transaction size, more full price selling and better conversion again in the quarter. Product strength remained broad based across franchises and brands, including lifestyle running, sandals and low profile athletic fashion, with momentum in newer brands and fashion trends such as Mary Jane's and sneaker ballerinas. Ultimately, athletic lifestyle led the growth over the summer where Journeys demonstrated its ability to drive market leadership in several franchise important to its target team customer. Our 4.0 rollout remains a major driver with the new format continuing to deliver in excess of a 25% sales list. We opened 25 locations in Q2, bringing our total for the year to almost 50. What is most noteworthy about the quarter beyond the positive comps is Journeys delivered a meaningful 180 basis points of expense leverage. The productivity of these 4.0s continued fleet optimization impactful cost reduction actions and a new approach for selling salary efficiencies all contributed. This leverage combined with more modest comp growth and roughly flat sales due to closed stores drove the nice improvement in operating income, positioning Journeys well for profit gains outside of a robust shopping peak. While our back to school business got off to a later start, due to the Labor Day calendar shift, sales trends accelerated. boosted by our Life on Loud campaign as we got into the season, especially during tax free periods with customers looking for budget relief. As I mentioned, Journeys is comping nicely positive against record back to school results last year, especially in larger, more premium shopping centers and in major states like California and Texas. Turning now to SHU. Our reset is squarely about restoring better economics over time and this quarter's results show that work is taking hold. To oversee this next phase of the turnaround, we named Tomas Petersson president of Schuh in late July. Tomas succeeds Colin Temple, who is retiring after a remarkable 38 year career with the business, including the last 15 years as president. I want to thank Colin for his extraordinary in building SHU from the start into 1 of the UK's leading footwear retailers and for his partnership in getting the reset work off the ground. Tomas joins us from Foot Locker where he most recently served as the geographic leader and general manager for Europe, Middle East and Africa leading Foot Locker's largest international business. He brings extensive global leadership experience across multi branded footwear retail and footwear brands with a focus on youth culture. Tomas is reporting to Andy Gray. Head of our Journeys Global Retail Group. We have every confidence that his UK and international experience and track record growing profitable retail businesses make him the right leader to quickly build on the current progress. His skill set and experience are an exceptional fit for Schuh. Welcome, Tomas. Now back to Q2, Schuh's gross margin improved 300 basis points over last year as we prioritized full price selling over discounting and promotions with a full price mix increasing by 10 full percentage points of overall sales. Greater than expected gross margin improvement combined with extensive efforts to improve the cost structure, including 6 store closures in the quarter, selling salary efficiencies, digital marketing optimization among others, drove nearly flat operating income year over year despite lower sales. That is the trade off we said we would make at Schuh, near term sales pressure in exchange for a healthier business. We are also making progress in product with greater access to and allocation of adidas, Nike, ASICS, UGG, New Balance, Birkenstock, and others as part of our more elevated assortment strategy. And we expect continued improvement as part of the Journeys retail group. The UK consumer market remains challenged and price sensitive, which we are observing during back to school right now. Against this backdrop and with our efforts to reduce discounting, we said we expect the Schuh turnaround to take longer than Journeys but we see the same opportunity to serve the style led youth customer we have captured at Journeys and remain confident in our plan. Moving now to our branded business, Johnston and Murphy built on its momentum with its 3rd consecutive quarter of positive comp gains. Newness and improving assortments, thoughtful pricing strategies, and growing awareness driven by increased brand marketing on our Peyton Manning campaign, contributed to this growth. The strength in the quarter was store led with traffic considerably outperforming the industry along with improved conversion and higher transaction size. Both higher sales and better gross margins drove the profit increase in the quarter. We are beyond thrilled to announce that we have extended our successful partnership with Peyton Manning for 2 additional years. Peyton is the consummate successful aspirational J&M brand ambassador with over 85% recognition across our target customer base. Our post initial campaign research showed positive trends in J&M awareness and brand appeal, with revenue from new customers growing at a double digit rate this year and up for 10 consecutive months since the launch of the first campaign. Younger customers are driving the growth, from the under 26 to 35 and 36- to 45-year-old segments which gives us a long runway for growth. We are also benefiting from a shift in fashion trend. The shift is not to formal dressing, but to a more refined, put together way of dressing for work, travel, and social occasions and that shift is right in J&M's wheelhouse. Apparel was the biggest growth driver in the quarter growing double digits with strength from the XC Flex Pinnacle Blazers pants, and knits. Footwear also grew led by casual and casual athletic styles like the Ackerson, which is a dressier refined sneaker. At Genesco brands, major increases in Dockers sales and significantly improved gross margins help offset revenue loss from license exits. As our excitement builds for the Wrangler footwear launch this month. Now turning to our outlook. We are very pleased with the bottom line outperformance we delivered in Q2 and the comp acceleration we expected as Q3 got underway and we moved into the heart of back to school even as comparisons became more challenging. While we anticipate continued choppiness in consumer shopping for the balance of the year, and lower comps in non shopping peaks. We have shown that we can effectively navigate these periods. With our outperformance to expectations, we are rolling a portion of that upside forward, but are now expecting more challenging sales in the back half to take the actions needed at Schuh given how promotional we now expect The UK footwear market to be. We also plan to invest in brand building and marketing to drive customer awareness and grow our business. Taken together, these factors give us confidence that we are well positioned to deliver at the high end up from the middle of our previously increased EPS range of $2 to $2.40 Let me now briefly highlight a few of the initiatives that are shaping the second half and supporting our longer term earnings bridge. At Journeys, over the past 2 years of transformation, we have sharpened the customer proposition, we have meaningfully elevated and diversified the assortment, We have improved brand access. We have invested in the Journeys brand. Upgraded the store and online experience, and dramatically improved the economics of the business. With a reimagined concept in place, the next chapter and larger opportunity for growth is broadening awareness and attracting more new customers to Journeys. The style led teen girl who is underserved in the mall today a group that is 6 to 7 times larger than our historical base. A key initiative to accomplish this is significantly greater investment in building the Journeys brand. To this end, expanded the reach of our Life on Loud platform with our new back to school campaign, including more and bigger activations with our key brand partners and greater consumer engagement across social, digital and in store experiences. We have increased our media spend over 30%, and the campaign has already delivered over 260 million media impressions in the first 4 weeks of an 8-week flight. TikTok and Instagram engagement has increased 30% including TikTok top view. And it is all led, as we intended, to traffic increases in stores and to journeys.com, which we have seen since its launch on July 14th. The campaign features Outer Banks Madison Bailey and XO, Kitty's Anna Cathcart, 2 celebrities that resonate with our team customer. And other influencers who are all magnifying the campaign's impact through their own social networks. Our 4.0 store rollout is another key vehicle for attracting new customers and bringing the reimagined Journeys experience to life. Through the second quarter, we have opened 130 stores in the new 4.0 format and increased our full year target to 95 stores, bringing the total to about 180, or 20% of the total fleet by year end. Roughly 2 thirds are remodels with the balance primarily relocations to larger footprints plus a handful of new stores, which will drive even more growth. Our larger stores and better malls are outperforming, and we are capitalizing on that opportunity. In San Antonio, for example, we consolidated separate Journeys and Journeys Kid stores into a larger format location that is delivering promising early results. With sales up more than 70% month-to-date and well ahead of target. We also opened our first 4.0 Journeys kids store in Mesquite, Texas with plans for 7 more this year to determine if this too can be an additional growth vehicle. Moving to SHU, our priority is to build on the reset work under way while simultaneously honing the customer proposition and solidifying the path to strengthening the brand's positioning in The UK market. With Tomas now on board, we look forward to sharing that strategic growth plan in more detail in the coming months with inspiration from the Journeys playbook successes. And in the meanwhile, we will be continuing to reduce reliance on discounting. There will be a little less opportunity for gross margin improvement in Q3 but more in Q4. Completing the closure of 20 stores in total over the last 2 years or over 15% of the store base as we optimize the footprint, furthering the cost reduction results we have been achieving and building on the product access gains while rationalizing tertiary brands. At Johnston and Murphy, we see a unique moment at this time to greatly expand on our momentum as consumers gravitate toward a more refined and put together look. We are excited for the new Johnston & Murphy and Peyton campaign, which launched on September 1st, 1 month earlier than last year. We shifted marketing dollars into Q3 for more impact. This campaign has a fashion theme with continued focus on reaching our target customer through live sports and sports and business programming and content. Our assortment will be supported by strong fall newness in quarter zips, layering pieces, outerwear, and boots as we head into this important selling season. And we will have additional new customer acquisition catalysts with the opening of 10 new J&M stores in the back half. In summary, our footwear first strategy continues to gain traction and the strategic initiatives we have put in place are translating into tangible results across our company. This progress is a direct result of the stellar dedication and execution of our people and I want to thank you for your incredible work which is so exciting to see pay off. And with that, I will turn it over to Jonathan to review our financial results and outlook in more detail. Jonathan Collins: Thanks, Mimi, and good morning, everyone. Before I get into the quarter, I want to say how excited I am to be joining Genesco. As I shared when I was announced, I am honored and humbled to join the company at such an exciting time in its growth journey. Over the past few weeks, I have had the opportunity to spend time with Mimi, the board, and the leadership team. And what stands out is the progress being made under the footwear first strategy and the significant opportunity ahead. We have strong brands, and leading positions in attractive categories and multiple opportunities to drive profitable growth and shareholder value. I look forward to partnering with the team as we execute on these opportunities. With that, let me turn to the quarter. The headline for the quarter is that earnings improved meaningfully despite lower sales, driven by gross margin expansion and disciplined expense management. This performance demonstrates the operating leverage we are building and reinforces our confidence in the earnings potential of the business. Revenue for the quarter decreased 3% to $530 million and overall comparable sales declined 1%. As Mimi outlined, the decline in sales was anticipated and driven primarily by the impact of store closures, a deliberate reduction in promotional activity at Schuh amid a highly promotional UK market and the loss of sales from the license transition ahead of the Wrangler launch. We ended the quarter with 67 net fewer stores than a year ago representing approximately 5% of both our fleet and square footage. And approximately 2% of sales. Importantly, these closures continue to be accretive to operating income, with many generating positive sales transfers in excess of 15% while improving fixed cost leverage across our fleet. By channel, store comps increased 1% while ecommerce comps declined 6% due to the outsized impact of reduced promotions at Schuh online. By division, Journeys comps increased 2% Johnston and Murphy's comps increased 4% while more than offset by a 9% decline at Schuh. Adjusted gross margin was 47.2%, up 140 basis points from last year, driven by reduced promotional activity and higher full price selling at Schuh, a favorable sales mix, license exit benefit, and pricing and tariff mitigation actions in our branded businesses. Adjusted operating expenses decreased approximately $6 million versus last year driven by selling salary efficiencies and effective cost control. Adjusted SG&A expense was 48.8% of sales and deleveraged 40 basis points due primarily to lower sales volume. Excluding performance based incentive compensation, SG&A expense was almost flat as a percentage of sales. As a result of our quarter's performance, adjusted operating loss improved by $6 million to a loss of $8 million compared to a loss of $14 million last year. Adjusted diluted loss per share was $0.83 compared to a loss of $1.14 last year. This quarter's was negatively impacted by a significantly lower tax rate versus last year driven by the valuation allowance discussed on our Q4 call. And does not fully reflect the improvement in operating income. As we continue to execute the enterprise wide structural cost savings initiative announced earlier in the year, I want to provide additional color on the $40 million to $50 million opportunity. The program focuses on selling salary productivity, operational efficiencies, procurement initiatives, and AI and automation opportunities. Importantly, these are structural savings designed to permanently improve the economics of the business rather than 1 time cost reductions. The early results we are seeing from our IT transformation and broader efficiency initiatives increase our confidence in the program. Fiscal 27, we expect to realize up to $20 million of savings with the remaining $20 million to $30 million expected over the following 2 years. These savings are enabling us to invest in areas that drive growth and brand awareness while also helping to offset inflationary pressures. Regarding tariffs, we received approximately $22 million of refunds during the quarter we have excluded from our adjusted results. As a reminder, these relate only to our branded businesses where we import product which represent roughly 20% of our company. As previously discussed, we view these proceeds as nonoperating in nature, and intend to deploy them consistently with our capital allocation priorities including growth investments and returns to shareholders. We will continue mitigating tariff impacts through pricing, sourcing, and mix actions as we assess any additional exposure from the new Section 301 tariffs. Turning now to capital allocation and the balance sheet. Inventory at quarter end was up 8% versus last year, driven primarily by investments in Journeys growth initiatives. Support for 4.0 store expansion, and key product categories headed into back to school. Overall, inventory remains clean and appropriately positioned for the fall and holiday selling seasons. Capital expenditures totaled $17 million during the quarter, and were focused primarily on Journeys 4.0 remodels, and growth initiatives. We ended the quarter with 1.19 thousand stores following 3 openings and 25 closures. We did not repurchase shares during the second quarter, In the third quarter through August 31, we repurchased approximately 318 thousand shares or about 3% of outstanding shares for $11 million, leaving $19 million remaining during under our authorization. We continue to view share repurchases as an important component of our capital allocation framework, while maintaining balance sheet flexibility. Our balance sheet remains healthy, liquidity remains strong, and we expect solid cash flow generation as we move through the second half of the year. Before discussing the specifics of our updated outlook, I want to reiterate our approach to guidance. The majority of our annual earnings are generated during the third and fourth quarters particularly the fourth quarter and we continue to operate in a dynamic consumer environment. While recent performance has been encouraging and supports an increase to our full year outlook, we believe it is prudent to maintain an appropriate level of conservatism until we are further through the holiday selling season. Our goal is to establish a range we believe is achievable while preserving opportunities to outperform Turning now to our outlook. Based on our second quarter outperformance, we now expect fiscal 27 adjusted diluted earnings per share to be at the high end up from the middle, of our previously increased range of 2 point to $2.40. For the back half of the year, we still expect continued momentum at Journeys and Johnston and Murphy gross margin progress at Schuh, and disciplined expense management. We are flowing a portion of the Q2 outperformance through to the balance of the year, while also incorporating quite a bit more than an initially expected sales pressure in the back half from Schuh as we continue to prioritize gross margin improvement through more full price selling in an increasingly competitive UK footwear market along with incremental investments in marketing and brand building initiatives. Importantly, our adjusted outlook excludes the tariff refunds received during the second quarter and assumes no benefit from any future tariff refunds. Our full year guidance now assumes flat comparable sales versus our prior expectation of up 1% to 2% reflecting the greater sales pressure at Schuh, resulting in total sales down approximately 2% versus our prior expectation of down 1% to flat gross margin expansion of 60 to 80 basis points versus our prior expectation of 50 to 60 basis points reflecting second quarter outperformance. SG&A as a percentage of sales to deleverage approximately 30 basis points versus our prior expectation of flat to 20 basis points of deleverage reflecting the lower sales, and adjusted operating income within our prior range of $34 million to $40 million with the higher end of the range up from the middle now the most likely outcome. We also continue to assume a full year adjusted effective tax rate of approximately 30%. Due to the valuation allowance and seasonal earnings pattern of the business, we again expect the tax rate to remain unusually low for the third quarter with the fourth quarter true up to reach the full year rate. Our updated outlook assumes a weighted average diluted share count of approximately 10.8 million shares reflecting repurchases completed through August 31. For the third quarter, specifically, we expect roughly flat comparable sales with positive comps at Journeys and J&M offset by negative comps at Schuh. Total sales down a little over 4% to 4.5% reflecting the sales pressure at Schuh, $14 million of loss from license exits and the impact of store closures. We expected the most pressure from the license lost the second and third quarters, but were able to make up about half of it in the second quarter which we are not assuming for the third. Gross margin expansion of 90 to 100 basis points driven by Genesco brands lapping significant clearance activity last year and our expectation for more full price selling at Schuh, SG&A deleverage that will more than offset the gross margin expansion, reflecting the sales decline as well as 100 basis points of pressure from increased marketing and investment behind back to school and the expanded J&M Peyton campaign and a tax rate of approximately 7% to 8%. Taken together, we expect third quarter operating income to be moderately below last year reflecting the timing of these pressures and investments, while EPS is expected to be $0.05 to $0.15 higher. We view this as a temporary break in our operating income progression with growth expected to resume in the fourth quarter. As we move through the second half, we expect earnings to remain heavily weighted towards the fourth quarter consistent with our historical seasonal pattern. While we remain appropriately cautious heading into holiday, continued momentum at Journeys and Johnston and Murphy, margin progress at Schuh, and disciplined execution across the company reinforce our confidence in the full year outlook. Together with efficiency initiatives, we believe this progress demonstrates the earnings potential of our operating model and positions us to deliver sustained income growth over time. Operator, we are now ready for questions. Operator: Thank you. Tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset Our first question is from Joseph Civello with Truist Securities. Please proceed. Joseph Civello: Hi, guys. Thanks so much for taking my question. Congratulations on a good quarter. I have gone through wanted to follow-up on the categories at Journeys. I know you said strong comps were broad based. Wondering if we could get into the details of the different components of that, whether it be athletic or Canvas, boots, anything would be helpful. Thanks. Mimi Eckel Vaughn: Sure. Good morning, Joe, and thank you. We are excited about the performance in the quarter. And just to give you a bit more brand color about where Journeys is, we are, really experiencing multi branded momentum. We benefit from the fact that we have a diversified set of brands across as you said, athletic and canvas and casual; and that gives our consumer a lot to choose from. And also allows us to be very diversified in our overall assortment, not dependent on any 1 brand. I would say we had about, about 8+ brands providing growth in the quarter. There was some newness. We are seeing that low profile is definitely a look that is gaining quite a bit of traction. there is some nice trends in ballerinas and in Mary Jane's and certain brands. it is a look that is providing newness. And as I said, newness is what is resonating. Lifestyle running continues to perform very nicely. We have got some benefits from new brands that we introduced last year. As typical, we introduced it on a lower base, and then it ramps over time. Our sandal business was quite good for the summer. And there were 1 to 2 other brands that really did help add to the overall mix. it is been much more on the lifestyle athletic side. There have been some bright spots in casual, but if I had to weigh the scales, I would say certainly would be more lifestyle athletic than casual growth that we experienced in the quarter. Got it. Thanks so much. Operator: Our next question is from Mitchel Kummetz with Seaport Research Partners. Please proceed. Mitch Kummetz: Yes. Thanks. I have got couple of questions, I guess. Mimi, kind of along the lines of product and journeys, can you address your exposure to and performance of legacy athletic silhouettes, You know, some of your competitors came out last week and talked about challenges there. Just wondering how what you are seeing there. And do you see any risk in the back half to maybe some increased promotional promotions around some of those products from some of your competitors? And then I have got a Sure. Mimi Eckel Vaughn: Good morning, Mitch. Thanks for the question. You know, there has been a lot of talk in the industry about legacy athletic styles. As I said, our lifestyle athletic was the star of the quarter for us, and it is due to the fact that we are diversified against across a number of different brands. And I think some of the pressure in the industry is concentrated within some individual brands. And so do we expect more promotional activity in the back part of the year? We do, but it really has been quite promotional for some time now within the athletic space. And some in apparel, some in particular styles. Our great benefit is that we are serving that style based customer, particularly with a tilt toward the teen girl. And what we are seeing in ballerinas and Jane's and some of the other styles that are quite female, female tilted more than anything else is helping to drive our business. And so we are quite focused on what we are doing on how well Journeys is performing against fantastic performance the last couple of years. And so, you know, in the back part of the year, we expect promotional activity will happen around us as it has been happening. For some time, but our full price selling was quite good, was quite good through back to school, and we intend to keep the focus on full price selling for the back half. Mitch Kummetz: Just as a follow-up on the Mary Jane's and ballet flats. I get the impression that you are referring to products like Sam or maybe the Speedcat ballet shoes. Is there also an opportunity for you around some of those silhouettes on the nonathletic side where maybe there is even less competition in the mall for those kinds of products And you guys obviously address the nonathletic side well. In the mall? Mimi Eckel Vaughn: For sure. that is a great question, Mitch. And for sure, I think anytime trends take off, they start in 1 place, and then brands really try to put their own interpretation of what those trends will be. And, certainly, we do have on the Mary Jane side some nice opportunities on the casual side. You know that our mix shifts a lot into more casual in the back part of the year. And so there is certainly an opportunity. The beauty of the Journeys model is that we can sell athletic. We can sell casual. We can sell whatever is relevant. We can rotate our brands in and out. So that we are spotlighting and showcasing and growing the brands that are really relevant for our team consumer. Mitch Kummetz: And then my last question, just on the product outlook for the back half. Can you talk a little bit about how your thinking about the Boot segment? And then there is been obviously some talk about potentially a Super El Nino this year. I know that your boot business is more fashion than function, but weather does play somewhat of a factor. So could you maybe kind of walk through your thoughts around how you are thinking about boots and the potential impact of maybe some warmer weather this winter? Mimi Eckel Vaughn: Sure. So the key thing that you said, Mitch, is that our boots are definitely about fashion. And it does need to be cool to get the consumer to register that it is time to buy boots and it is time to shift what they are wearing into the fall season. And so I would say that, you know, how cold the winter is does not necessarily impact where, you know, our outlook on what the boot segment would be. I will say it is been extraordinarily hot. I mean, it is we are in Nashville, and it is gonna be 90 degrees feels like a 100, you know, really late into where we are in September. And so too early to get a read on the boot segment. I think we will know a little bit more when, cooler fall weather, comes into play. But you know, we have got a great assortment across all the categories that I just talked about. And, you know, that is what we are really banking on for the, you know, what is carrying us well for back to school. We have seen a nice pickup in our comp through back to school, and the diversification is going to carry us into the holiday season as well. Great. Thank you. Operator: Thank you. Our next question is from Samuel Poser with Williams Trading. Please proceed. Sam Poser: Good morning. Thanks for taking my questions. I would just like to know, you gave you mentioned in your prepared that Journeys comps, stores and ecom. Can you tell us sort of the variance for the 2 other divisions? Like how for Schuh and for the same information for SHU and for J&M, please? Mimi Eckel Vaughn: Sure. So we were delighted that Journeys, had positive comps in both the store channel as well as online. And we particularly saw a lot of growth in traffic for online with our Life on Loud campaign If you have not checked it out, Sam, I know that you frequent social media, but it is a spectacular campaign, and that allowed us to drive a lot of traffic both to stores but, to e comm in particular. If we shift over to shoe, we are pulling back on promotions, and online is a customer who either is jumping on the latest fashion trend or looking for a deal. And so the pullback on the promotional activity has disproportionately affected our online channel. So our comps were more negative in online than they were in stores. And we can manage that better. I think we talked about the fact that Schuh was able to almost offset all of the sales decline in the quarter, and it is because we can pull down on our expenses in the online channel. And so we are actually pleased with how our stores are holding up in light of the pullback. And then finally on Johnston and Murphy, we had some unique factors in the quarter where we had we have been pulling back on our catalog drop and we had a pullback on catalog in the quarter that again, disproportionately impacts the online channel. And so we are excited about right now is how much online has, has taken off for Johnston and Murphy with the fall assortment and with the fall drop. And the shift I talked about into a more dressed up, cleaned up look is really benefiting us in across really every channel at this time. Sam Poser: So just so I can so I can just clarify just for you also mentioned that the comps in August at Journeys has accelerated because of the later back to school. But I guess, with less promotions going on in at Schuh, Schuh would disproportionately fall off when the promotional activity is higher. There. Correct? Because you are trying to keep it cleaner. And it is a different market. And then J&M comps theoretically accelerated based on the drop of the new product. Is that a fair just general way to think about it? Mimi Eckel Vaughn: We are off to a really good start in the quarter. And we have seen an acceleration of Journeys comp, I said, into the mid single digits. And I think that part of the second quarter comp was for Journeys was affected by a later back to school. So for sure, back to school has a couple, at least a week, maybe a couple more weeks for journeys. We expect that robust comp to continue, and then we do expect in October, the end of September, October into November until holiday starts that comps will pull back. We do believe that Journeys comps will stay positive. For Schuh, we have seen a little bit of a tick up from a negative level over back to school, but we do expect the same fall off. And for j and m comps, you know, certainly have accelerated based on the impact of the new product drops. Yes for sure. So I think for sure, you know, Journeys up where it is. Schuh will fall off later on, and then J&M comps have picked up. Sam Poser: And then where are you in Schuh with getting the what you believe is the product mix where it needs to be. You know, getting it really, in its sort of full effect of having the product to more focus on the, teen girl, I guess, but teenagers in general than it has been. Mimi Eckel Vaughn: Right. We have been working on that. And a key part of the Schuh strategy is elevation of the assortment similarly to what we did in Journeys a couple of years ago. And we are making good progress. And as you know, it takes, you know, it takes some time to be able to, you know, just to change the assortment given the lead times, in our product cycle But, we are quite pleased on the progress that we are making. I do not think you see the full impact just yet. And I do think some of the progress we are making is being overshadowed by the fact that we are, you know, seeing that we are pulling back on promotions. And so I think that is puts and takes that certainly are making progress, more progress to come, but overshadowed by, lower sales from the pullback on promotions. Operator: Our next question is from Kiley Kahoe with Jefferies. Please proceed. Kiley Kahoe: Hey, good morning, and thanks for taking my questions. Journeys has now delivered 8 consecutive quarters of positive comps and you highlighted a much larger opportunity with the underserved teen girl customer. As you are thinking about increasing marketing spend and expanding the 4.0 format, how should investors think about the relative contribution of traffic growth conversion and AUR to sustain this positive comp momentum over the next few years. Thank you. Operator: Kiley, thanks for your question. Mimi Eckel Vaughn: And for noting that Journeys is on its eighth consecutive quarter of positive comp and we are really into our ninth consecutive quarter if you count our quarter to date. And what has been driving that is a reimagined concept that is really thinking about sharpness around the consumer base that we are serving, It is an underserved, you know, young female within the mall who is well served by apparel, but there is an opportunity, we think, for 6 to 7 times larger consumer base than the market we have traditionally served. And if you have been in our 4.0s, you will see that. I mean, you will see just a an incredible environment. That really speaks to her and has the exact right brand assortment that she's looking for across multiple different brands with the exact right styles out of an assortment. And that is what we can do in Journeys is we can edit the assortment and provide exactly what that what that young girl is looking for. And we have an assortment that is really on unparalleled across the mall. And so what has been happening within footwear in general is that customers have been buying fewer pairs to compensate for some of the offset in ASP increases. And we have been seeing great conversion in Journeys. We have been seeing better traffic in the 4.0s. We expect the 4.0 traffic to grow over time as, more consumers get to know the concept. The buying cycle for footwear is long. And, therefore, it takes a bit to be able to really compound that traffic growth. But, we are really leaning into conversion. And because of the elevation of the product, the, average that AUR has helped us the most. And so conversion in AUR for now and increasingly traffic growth as we build the base of new customers. And, as you said, our Life on Loud, campaign is just a great example, and all the work we are doing on social is work to be able to continue to contribute to our traffic growth. Great. Thank you so much. Operator: Thank you. We have reached the end of our question and answer session. I would like to turn the conference back over to Ms. Vaughn for closing remarks. Mimi Eckel Vaughn: Thanks for joining us this morning. We wish everybody a great holiday weekend and look forward to talking to you on our next quarterly call, if not before. Thank you. Operator: This will conclude today's conference. You may disconnect at this time, and thank you for your participation. Before you buy stock in Genesco, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Genesco wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $414,015!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,385,459!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of September 9, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Genesco (GCO) Q2 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Delivered bottom-line results ahead of expectations despite lower sales, driven by gross margin recapture and disciplined expense management across all business units. Journeys achieved its eighth consecutive quarter of positive comparable sales, fueled by a multi-branded assortment strategy that resonates with the underserved 'style-led teen girl' demographic. Schuh's performance reflects an intentional trade-off where near-term sales pressure from reduced discounting is exchanged for a healthier, more profitable business model. Johnston & Murphy's growth was propelled by a shift toward 'refined' dressing and the successful extension of the Peyton Manning brand partnership, attracting younger customers. Operational leverage improved through the rollout of Journeys 4.0 store formats, which continue to deliver sales lifts in excess of 25% compared to legacy formats. Management attributed sales declines to strategic headwinds, including fleet optimization (67 net fewer stores), license transitions, and the deliberate pullback on promotions at Schuh. Increased the full-year EPS guidance range to the high end of $2.00 to $2.40, reflecting Q2 outperformance while maintaining conservatism for the holiday season. Anticipate continued sales pressure at Schuh in the back half of the year due to a highly promotional UK footwear market and a commitment to full-price selling. Expect to realize up to $20 million in structural cost savings in fiscal 2027, part of a larger $40 million to $50 million multi-year efficiency program. Planned acceleration of the Journeys 4.0 rollout to approximately 180 stores by year-end, representing 20% of the total fleet. Q3 guidance assumes flat comparable sales, with positive momentum at Journeys and J&M offset by negative comps at Schuh and a $14 million headwind from license exits. Received $22 million in tariff refunds during Q2 related to branded businesses; these are excluded from adjusted results and treated as non-operating capital. Completed a leadership transition at Schuh, appointing Tomas Petersson as President to oversee the next phase of the brand's UK market reset. Inventory increased 8% year-over-year, which management characterized as a strategic investment to support Journeys' growth and back-to-school readiness. The company repurchased approximately 3% of outstanding shares for $11 million through August 31, with $19 million remaining under the current authorization. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that lifestyle athletic led growth, specifically citing low-profile silhouettes like ballerinas and Mary Janes as key newness drivers. Confirmed that Journeys is diversified across 8+ growth brands, reducing reliance on any single legacy athletic silhouette that may be facing industry-wide pressure. Management clarified that their boot business is driven by fashion rather than function, meaning extreme cold is not required for sales, though 'cool' weather triggers the seasonal shift. Acknowledged that record heat in September makes it too early to read the boot segment, but expressed confidence in the diversified fall assortment. Journeys saw positive comps in both stores and e-commerce, while Schuh's online channel was disproportionately hit by the reduction in promotional activity. Johnston & Murphy experienced a temporary online headwind due to a strategic pullback in catalog drops, which has since reversed with the launch of the fall collection.

This article first appeared on GuruFocus. Revenue: Decreased 3% to $530 million. Comparable Sales: Declined 1% overall; store comps increased 1%, e-commerce comps declined 6%. Adjusted Gross Margin: 47.2%, up 140 basis points from last year. Adjusted Operating Loss: Improved by $6 million to a loss of $8 million, compared to a loss of $14 million last year. Adjusted Diluted Loss per Share: $0.83, compared to a loss of $1.14 last year. Journeys Comparable Sales: Increased 2%, marking the eighth consecutive quarter of positive comps. Johnston & Murphy Comparable Sales: Increased 4%, the third consecutive quarter of positive comp gains. schuh Comparable Sales: Declined 9%, with gross margin improving 300 basis points. Store Count: Ended the quarter with 1,186 stores, a net decrease of 67 stores year-over-year. Inventory: Up 8% versus last year. Capital Expenditures: Totaled $17 million during the quarter. Tariff Refunds: Received approximately $22 million during the quarter, excluded from adjusted results. Warning! GuruFocus has detected 7 Warning Sign with WLY. Is GCO fairly valued? Test your thesis with our free DCF calculator. Release Date: September 03, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Genesco Inc (NYSE:GCO) delivered second-quarter bottom-line results significantly better than last year and well ahead of expectations, with every business achieving gains versus plans. Journeys delivered its eighth consecutive quarter of positive comparable sales, with both store and e-commerce comps positive, and achieved a meaningful 180 basis points of expense leverage. Johnston & Murphy posted its third consecutive quarter of positive comp gains, driven by newness, improved assortments, and the successful Peyton Manning campaign, which has been extended for two additional years. schuh's gross margin improved 300 basis points year-over-year as the company prioritized full-price selling, with the full-price mix increasing by 10 percentage points of overall sales. The company raised its full-year adjusted EPS guidance to the high end of the $2 to $2.40 range, reflecting confidence in its strategic initiatives and earnings potential. The Journeys 4.0 store format continues to outperform, delivering in excess of a 25% sales lift, with the company increasing its full-year target to 95 store openings. Genesco Inc (NYSE:GCO) received approximately $22 million in tariff refunds during the quarter, which are excluded from adjusted results and will be deployed for growth investments and shareholder returns. Total company revenue decreased 3% to $530 million, with overall comparable sales declining 1%, driven by store closures, reduced promotional activity at schuh, and the license transition ahead of the Wrangler launch. schuh's comparable sales declined 9% due to the intentional pullback on discounting and promotional activity, and the UK consumer market remains challenged and price sensitive. The company now expects flat comparable sales for the full year, down from its prior expectation of up 1% to 2%, reflecting greater sales pressure at schuh. Third-quarter operating income is expected to be moderately below last year due to sales declines, increased marketing investments, and the timing of license exit losses. E-commerce comparable sales declined 6% overall, with schuh's online channel disproportionately impacted by the reduction in promotional activity. The company ended the quarter with 67 net fewer stores than a year ago, representing approximately 5% of its fleet and square footage, which contributed to the sales decline. SG&A expense deleveraged 40 basis points as a percentage of sales due to lower sales volume, and the company expects further deleverage of approximately 30 basis points for the full year. Q: Can you provide more detail on the product category performance at Journeys, specifically the breakdown between athletic, canvas, and casual?A: Mimi Vaughn, Board Chair, President, and CEO: Journeys experienced multi-branded momentum with over eight brands contributing to growth. The strength was broad-based, with lifestyle running performing well and newer fashion trends like Mary Janes and sneaker ballerinas gaining traction. While there were bright spots in casual, the growth was more heavily weighted toward the lifestyle athletic side. The diversified assortment allows Journeys to rotate brands in and out based on relevance for its teen customer. Q: Given the industry-wide challenges with legacy athletic silhouettes, what is your exposure and performance in that area, and do you see a risk of increased promotions from competitors in the back half?A: Mimi Vaughn, Board Chair, President, and CEO: While there is industry pressure concentrated within individual brands, Journeys' strength lies in its diversification across multiple brands. The company expects promotional activity to continue but benefits from serving a style-led customer, particularly the teen girl, with trends like ballerinas and Mary Janes driving business. Journeys remains focused on full-price selling and has performed well against strong comparisons. Q: How should investors think about the drivers of Journeys' positive comp momentumtraffic growth, conversion, and AURgiven the larger opportunity with the underserved teen girl customer and increased marketing spend?A: Mimi Vaughn, Board Chair, President, and CEO: The reimagined 4.0 concept is designed to appeal to a consumer base that is six to seven times larger than the traditionally served market. Currently, Journeys is leaning heavily into conversion and AUR, which have been helped by elevated product assortments. Traffic growth is expected to increase over time as more consumers become aware of the concept through initiatives like the "Life on Loud" campaign and social media engagement. Q: Can you break down the comparable sales performance by channel (store vs. e-commerce) for each of the divisions?A: Mimi Vaughn, Board Chair, President, and CEO: Journeys posted positive comps in both stores and online, with significant traffic growth online driven by the "Life on Loud" campaign. At schuh, the intentional pullback on promotions disproportionately affected the online channel, leading to more negative comps online than in stores. Johnston & Murphy's online channel was impacted by a reduction in catalog drops, but has since seen a strong uptick with the launch of its fall assortment. Q: How is the product mix evolution at schuh progressing, and when will the full impact of the assortment elevation be visible?A: Mimi Vaughn, Board Chair, President, and CEO: Schuh is making good progress on elevating its assortment, similar to the strategy implemented at Journeys. However, given product lead times, the full impact will take time to materialize. The progress is currently being overshadowed by lower sales resulting from the deliberate pullback on promotions, but the company is pleased with the direction and expects continued improvement. Q: What are your thoughts on the boot segment for the back half, and how might weather, such as a potential El Nino, impact the business?A: Mimi Vaughn, Board Chair, President, and CEO: Journeys' boot business is fashion-driven rather than function-driven. While cooler weather is needed to trigger consumer interest in boots, the company's outlook is not heavily dependent on winter weather severity. With an extraordinarily hot start to September, it is too early to get a read on the boot segment. The diversified assortment across all categories is expected to carry the business through back-to-school and into the holiday season. Q: Can you provide more color on the third-quarter guidance, which expects operating income to be moderately below last year despite higher EPS?A: Jonathan Collins, CFO: The third quarter will see SG&A deleverage that more than offsets gross margin expansion, reflecting lower sales, 100 basis points of pressure from increased marketing investments behind back-to-school and the expanded Johnston & Murphy Peyton Manning campaign, and the impact of license exits. This is viewed as a temporary break in operating income progression, with growth expected to resume in the fourth quarter. Q: How are you thinking about the sales trajectory for each division as you move through the back half, particularly regarding the later back-to-school shift?A: Mimi Vaughn, Board Chair, President, and CEO: Journeys comps have accelerated to mid-single digits in August and are expected to remain positive, though they will likely pull back in October and November before holiday. Schuh has seen a slight tick up from negative levels during back-to-school but is expected to face continued pressure due to the promotional UK market. Johnston & Murphy comps have accelerated based on the impact of new product drops. Q: What is the status of the enterprise-wide cost savings initiative, and how much has been realized so far?A: Jonathan Collins, CFO: The $40 to $50 million structural cost savings program focuses on selling salary productivity, operational efficiencies, procurement, and AI/automation. For fiscal 2027, the company expects to realize up to $20 million in savings, with the remaining $20 to $30 million expected over the following two years. Early results from IT transformation and efficiency initiatives increase confidence in the program. Q: Can you elaborate on the tariff refunds received during the quarter and how they are being treated in the financials?A: Jonathan Collins, CFO: The company received approximately $22 million in tariff refunds during the quarter, which have been excluded from adjusted results. These proceeds relate only to the branded businesses, which represent roughly 20% of the company. The refunds are viewed as non-operating in nature and will be deployed consistently with capital allocation priorities, including growth investments and share repurchases. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Genesco Inc.? Here are five stocks we like better. Profitability improved despite weaker sales: Second-quarter revenue fell 3% to $530 million and comparable sales declined 1%, but gross margin expanded 140 basis points to 47.2% and the adjusted loss per share narrowed to $0.83 from $1.14. Journeys remained the growth engine: Comparable sales rose 2% for an eighth consecutive positive quarter, supported by lifestyle athletic footwear and stronger full-price selling. Genesco raised its target for Journeys’ 4.0 store openings to 95 for the year. Outlook emphasizes margins over sales growth: Genesco now expects flat fiscal 2027 comparable sales and about a 2% total-sales decline, while forecasting adjusted EPS toward the high end of its $2.00–$2.40 range and adjusted operating income of $34 million to $40 million. Genesco Pops On Earnings But Don’t Expect A Rally Genesco (NYSE:GCO) reported improved second-quarter fiscal 2027 earnings despite lower revenue, as gross-margin expansion and expense discipline offset sales pressure from store closures, reduced promotions at Schuh and licensed-brand transitions. Revenue declined 3% year over year to $530 million, while consolidated comparable sales fell 1%. Adjusted gross margin increased 140 basis points to 47.2%, and adjusted operating loss narrowed to $8 million from $14 million a year earlier. Adjusted diluted loss per share improved to $0.83 from $1.14 in the prior-year quarter. → Boarding Call: EHang Secures First-Mover Altitude “The headline for the quarter is that earnings improved meaningfully despite lower sales, driven by gross margin expansion and disciplined expense management,” Chief Financial Officer Jonathan Collins said on the call. The company ended the quarter with 1,186 stores, following three openings and 25 closures. Genesco had 67 fewer stores than a year earlier, representing about 5% of its store fleet and square footage. Collins said the closures have been accretive to operating income, with many producing sales transfers above 15%. → Medtronic’s Stars Are Aligning for a Price Recovery Comparable store sales rose 1%, while e-commerce comparable sales declined 6%, largely reflecting Schuh’s lower promotional activity online. By division, Journeys comparable sales increased 2% and Johnston & Murphy comparable sales rose 4%, while Schuh comparable sales fell 9%. Chief Executive Officer Mimi Vaughn said the lower sales base was anticipated and tied to actions intended to improve longer-term profitability. Those actions include continued fleet optimization, a license transition ahead of the Wrangler footwear launch and Schuh’s deliberate reduction in discounts and promotions. → Dutch Bros Sell-Off Creates a Growth Opportunity “These actions are in pursuit of a healthier, more profitable business over time,” Vaughn said. Journeys recorded its eighth consecutive quarter of positive comparable sales, with gains in both stores and e-commerce. Vaughn cited higher transaction sizes, more full-price selling and improved conversion, supported by product strength in lifestyle running, sandals and low-profile athletic fashion. The retailer also saw momentum in newer fashion trends, including Mary Janes and sneaker ballerinas. During the question-and-answer session, Vaughn said lifestyle athletic products were the largest contributor to growth, though the company also sees an opportunity for casual interpretations of current footwear trends. Journeys’ 4.0 store format remained a central part of the growth plan. The format has delivered sales lifts exceeding 25%, according to Vaughn. The company opened 25 new-format locations in the second quarter and had opened about 130 4.0 stores through the quarter. Genesco raised its full-year target to 95 4.0 openings, which would bring the total to roughly 180 locations, or 20% of the Journeys fleet, by year-end. Vaughn also said Journeys comparable sales accelerated to the mid-single digits in August, aided by back-to-school demand and the company’s “Life On Loud” campaign. Genesco increased media spending by more than 30%, and the campaign generated more than 260 million media impressions in its first four weeks, the company said. At Schuh, Genesco is accepting near-term sales pressure as it reduces reliance on promotions in a challenging and price-sensitive U.K. consumer market. Schuh’s gross margin improved 300 basis points from the prior year, while its full-price sales mix increased by 10 percentage points. Despite lower revenue, Schuh delivered nearly flat operating income year over year after cost actions that included six store closures during the quarter, selling-salary efficiencies and digital-marketing optimization. Genesco appointed Tomas Petersson as Schuh president in late July, succeeding Colin Temple, who retired after 38 years with the business and 15 years as president. Petersson previously served as geographic leader and general manager for Europe, the Middle East and Africa at Foot Locker. The company said it is making progress in gaining access to product from brands including adidas, Nike, ASICS, UGG, New Balance and Birkenstock. However, Vaughn said the full effect of the assortment changes has not yet been realized because of product lead times. Johnston & Murphy produced its third consecutive quarter of positive comparable sales. Vaughn said stores led the division’s growth, with traffic outperforming the industry, conversion improving and transaction sizes increasing. Apparel was the largest growth driver, while casual and casual-athletic footwear also grew. The company extended its partnership with brand ambassador Peyton Manning for two additional years. Vaughn said revenue from new customers has grown at a double-digit rate this year and has increased for 10 consecutive months since the first campaign launched. Genesco received approximately $22 million in tariff refunds during the quarter, but excluded the proceeds from adjusted results and said its outlook assumes no benefit from potential future refunds. The company plans to use the proceeds in line with its capital-allocation priorities, including growth investments and shareholder returns. For fiscal 2027, Genesco now expects adjusted diluted earnings per share toward the high end of its previously increased $2.00 to $2.40 range. The company now forecasts flat comparable sales for the year, versus its prior expectation for 1% to 2% growth, and expects total sales to decline about 2%. Gross margin is expected to expand 60 to 80 basis points for the full year, while adjusted operating income is still projected at $34 million to $40 million, with the higher end of that range now viewed as the most likely outcome. Genesco Inc is a Nashville, Tennessee-based retailer, wholesaler and licensee specializing in branded footwear, headwear, apparel and accessories. Through its portfolio of retail chains, wholesale distribution channels and licensing agreements, Genesco brings a range of product offerings to consumers in North America and Europe. The company's retail segment includes specialty chains such as Journeys, which targets fashion-focused teens and young adults in the United States and Canada, and Schuh, a footwear retailer with locations in the United Kingdom and Ireland. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Genesco Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

Footwear, apparel, and accessories retailer Genesco (NYSE:GCO) met Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 3% year on year to $529.9 million. Its non-GAAP loss of $0.83 per share was 39.3% above analysts’ consensus estimates. Is now the time to buy Genesco? Find out in our full research report. Revenue: $529.9 million vs analyst estimates of $527.6 million (3% year-on-year decline, in line) Adjusted EPS: -$0.83 vs analyst estimates of -$1.37 (39.3% beat) Adjusted EBITDA: $4.84 million (0.9% margin, 675% year-on-year growth) Adjusted EPS guidance for the full year is $2.20 at the midpoint, missing analyst estimates by 2.3% Operating Margin: 0.7%, up from -2.7% in the same quarter last year Locations: 1,186 at quarter end, down from 1,253 in the same quarter last year Same-Store Sales rose 1% year on year (4% in the same quarter last year) Market Capitalization: $372.3 million Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “We delivered second quarter bottom line results that were significantly better than last year and well ahead of our expectations. The quarter provides further evidence that our Footwear First strategy is working and our momentum is building. Journeys and Johnston & Murphy both delivered positive comparable sales in the quarter, and earnings improvement reflected the operating leverage we set out to build, with more full-price selling aiding gross margin recapture and disciplined expense management driving the stronger performance. As we anticipated, the decline in sales was driven by strategic actions: store closures, our license transition, and pullback on discounting at Schuh. As we move past these shorter-term headwinds, we expect sales trends to improve, and we remain confident that the initiatives underway across our company position us for profitable growth.” Spanning a broad range of styles, brands, and prices, Genesco (NYSE:GCO) sells footwear, apparel, and accessories through multiple brands and banners. Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Genesco grew its sales at a weak 1.9% compounded annual growth rate. This fell short of our benchmarks and is a rough starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Genesco’s annualized revenue growth of 2.8% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. Genesco also reports same-store sales, which show how much revenue its established locations generate. Over the last two years, Genesco’s same-store sales averaged 5% year-on-year growth. Because this number is better than its revenue growth, we can see its sales from existing locations are performing better than its sales from new locations. This quarter, Genesco reported a rather uninspiring 3% year-on-year revenue decline to $529.9 million of revenue, in line with Wall Street’s estimates. Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a slight deceleration versus the last two years. This projection doesn’t excite us and indicates its products and services will face some demand challenges. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. Genesco’s operating margin has risen over the last 12 months and averaged 1.3% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business. In Q2, Genesco’s breakeven margin was 0.7%, up 3.3 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses. Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions. Sadly for Genesco, its EPS declined by 22.5% annually over the last five years while its revenue grew by 1.9%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes. In Q2, Genesco reported adjusted EPS of negative $0.83, up from negative $1.14 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Genesco’s full-year EPS to grow 108% from $1.52 to $3.17. It was good to see Genesco beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. On the other hand, its full-year EPS guidance missed. Overall, we think this was still a solid quarter with some key areas of upside. The stock traded up 3.7% to $34.82 immediately after reporting. Genesco put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

Shares of Genesco climbed nearly 8 percent in pre-market trading on Thursday after beating analysts’ expectations in the second quarter. The Nashville-based footwear company reported a net loss of $8.8 million, or $0.83 per share, in the second quarter of fiscal 2027, compared to a loss of $11.7 million, or $1.14 per share, in Q2 2026. Net sales decreased 3 percent to $530 million compared to $546 million in the second quarter of fiscal 2026. More from WWD Journeys Will Continue to Shine When Genesco Reports Earnings This Week, Analyst Says Ulta Beauty Beats Wall Street Expectations, Raises Full-year Forecasts Amid Strong Q2 Performance Bath & Body Works Topped Wall Street Sales Estimates in Q2, but Is Still Not Getting Enough Consumers Through Its Doors Still, this performance beat analysts’ expectations, which called for net sales in Q2 to be between $526.6 million and $528.7 million with a loss per share between $1.34 and $1.39, according to Yahoo Finance. Genesco noted that the decline in net sales reflected the impact of net store closings, decreased licensed sales, a 6 percent drop in e-commerce comparable sales from reduced Schuh discounting and an unfavorable foreign exchange impact, partially offset by a 1 percent increase in same store sales and higher sales from enlarged stores. The company further reported that overall sales for the second quarter were driven by a decrease of 10 percent at Schuh and a 21 percent, or $7 million, decrease at Genesco Brands, partially offset by a 5 percent increase at Johnston & Murphy, while sales at Journeys were flat. During the quarter, the company opened three stores and closed 25 stores. The company ended the quarter with 1,186 stores compared with 1,253 stores at the end of the first quarter last year, or a decrease of 5 percent. Square footage was also down 5 percent on a year-over-year basis. Genesco disclosed that it received $22.5 million in tariff refunds, including interest, during the second quarter this year related to its branded businesses under the International Emergency Economic Powers Act. The company noted that no additional tariff refunds are included in its guidance for the full year. Genesco president, chief executive officer and board chair, Mimi Vaughn reiterated in a statement that the company delivered second quarter bottom line results that were “significantly better” than last year and well ahead of expectations. “The quarter provides further evidence that our ‘Footwear First’ strategy is working and our momentum is building,” Vaughn noted. “Journeys and Johnston & Murphy both delivered positive comparable sales in the quarter, and earnings improvement reflected the operating leverage we set out to build, with more full-price selling aiding gross margin recapture and disciplined expense management driving the stronger performance.” The CEO added that the third quarter is “off to a good start” with back-to-school and Journeys accelerating to a mid-single-digit comp in August on top of “very strong” growth the last two years. Looking ahead, Genesco is raising its full-year adjusted earnings per share outlook to the high end of the $2.00 to $2.40 range, up from its previous midpoint of the same range. Comparable sales are now expected to be flat versus prior guidance of positive 1 percent to 2 percent, reflecting greater pressure at Schuh, resulting in total sales now down approximately 2 percent versus prior guidance of flat to down 1 percent. “As we move past these shorter-term headwinds, we expect sales trends to improve, and we remain confident that the initiatives underway across our company position us for profitable growth,” Vaughn added. Best of WWD Zendaya's Best Christian Louboutin 'So Kate' Heels Moments All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

Footwear, apparel, and accessories retailer Genesco (NYSE:GCO) will be reporting results this Thursday before market open. Here’s what you need to know. Genesco beat analysts’ revenue expectations last quarter, reporting revenues of $487 million, up 2.8% year on year. It was a very strong quarter for the company, with a beat of analysts’ EPS estimates. Is Genesco a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members. This quarter, the market is expecting Genesco’s revenue to decline 3.4% year on year, a reversal from the 4% increase it recorded in the same quarter last year. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Genesco has missed Wall Street’s revenue estimates multiple times over the last two years. Looking at Genesco’s peers in the consumer discretionary - footwear segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Steven Madden delivered year-on-year revenue growth of 19.1%, beating analysts’ expectations by 4.8%, and Wolverine Worldwide reported revenues up 6.8%, topping estimates by 0.9%. Steven Madden traded up 6.2% following the results while Wolverine Worldwide was also up 16.4%. Read our full analysis of Steven Madden’s results here and Wolverine Worldwide’s results here. Over the past year, investors have repeatedly shifted their focus from one macro narrative to another (AI disruption and AI capex spending to geopolitics, interest rates, and the broader health of the economy). While some of the consumer discretionary - footwear stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 7.2% on average over the last month. Genesco is down 16.6% during the same time and is heading into earnings with an average analyst price target of $40.33 (compared to the current share price of $32.56). ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Williams Trading analyst Sam Poser is bullish on Genesco Inc. and has a “buy” rating on shares of the retailer. He sees “ongoing strength” at Journeys, which represents 62 percent of the Nashville-based footwear firm’s annual revenue. That strength is fueled by improved merchandise assortments. In addition, the roll-out of its remodeled stores — a new store concept dubbed 4.0 doors featuring larger footprints, new fixtures and added experiential components — is expected to drive second quarter 2027 earnings. More from WWD Shein's Hong Kong IPO Opens With a Reality Check EXCLUSIVE: Randa Acquires Untuckit, Will Operate It as a Stand-alone Business What to Watch: Here's the Skinny on Skinny Jeans Poser said gains at Journeys will help Genesco’s second quarter 2027 earnings results “meet and exceed guidance.” Genesco is slated to report second quarter earnings results on Sept. 3. Poser is forecasting second quarter same-store sales of up 3.5 percent, on top of the 9 percent gain in same-store sales in the year-ago second quarter period. “We are confident that the improving product mix and the additional 4.0 stores will drive the comps,” Poser said. There were 940 Journeys stores at the end of the first quarter, with 105 doors representing the 4.0 concept, up from 39 in the same year-ago quarter in 2026. The Williams Trading analyst said there were 45 more 4.0 locations planned for Fiscal Year 2027, including some Journeys Kidz 4.0 stores that will be attached to select Journeys 4.0 locations. One of the takeaways from Genesco’s first quarter conference call in May was the company’s chief executive officer Mimi Vaughn noting that its Johnston & Murphy label saw brand awareness “continue to trend up” since its tie-up with NFL Hall of Famer Peyton Manning. She said demand was seen from younger consumers and are improving and that the retailer “continues to be successful in attracting consumers that are younger than its traditional customers.” Investors will want to know more about branding and what else is on the agenda for the Johnston & Murphy brand for the fall season. As for the Schuh operation, which has been struggling, Vaughn said the company sees the same opportunity to serve the style-led youth girl at Schuh that it saw at Journeys. And with the immediate priority to improve profitability including reducing the reliance on discounting, investors will want to know how the reset is progressing as the British banner works on it merchandise mix. Vaughn said in the first quarter call that Schuh is building on its improved product access with brands that include Nike, Adidas and Asics. Best of WWD Zendaya's Best Christian Louboutin 'So Kate' Heels Moments All the Retailers That Nike Left and Then Went Back Mikey Madison's Elegant Red Carpet Shoe Style [PHOTOS] Sign up for FN's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.