Genesco Inc. (GCO) 2025 Q2 Earnings Call Summary

Optimistic Highlights

• Exceeded Expectations

Sales and profitability exceeded expectations, driven by strong performance at Journeys.

• Digital Business Growth

Digital sales grew by high single digits, contributing significantly to overall performance.

• Positive Back-to-School Results

Journeys saw positive comps in July and August, driven by new product assortments and increased consumer interest in footwear.

• Clean Inventories

Journeys maintained clean inventories, enabling full-price selling and lower markdowns.

• Cost Reduction and Share Repurchase

Cost reduction initiatives and share repurchase actions enhanced bottom-line results.

Pessimistic Highlights

• Schuh and Johnston & Murphy Pressure

Schuh and Johnston & Murphy faced challenges due to robust multi-year comparisons and a tough economic environment.

• Increased Promotional Activity

Schuh had to increase promotional activity to clear slower-moving products, impacting gross margins.

• Softening in Men's Premium Non-Athletic Footwear

Johnston & Murphy experienced sales pressure due to a softening market in men's premium non-athletic footwear.

• Cautious View for Schuh and J&M

The company remains cautious about Schuh and Johnston & Murphy's performance for the remainder of the year.

• Gross Margin Pressure

Expected gross margin pressure due to product mix and increased promotional activity at Schuh.

Company Outlook

• Positive Momentum at Journeys

Optimistic about Journeys' performance for the holiday season due to improved product assortments and consumer engagement.

• Cautious View for Schuh and J&M

Maintaining a cautious outlook for Schuh and Johnston & Murphy due to current trends and economic uncertainties.

• Full-Year Guidance Maintained

Despite better-than-expected Q2 results, the company is maintaining its full-year EPS guidance of $0.60 to $1.00.

• Focus on Long-Term Growth

Committed to unlocking growth and value across the company in fiscal 2026 and beyond.

• Continued Cost Savings

Ongoing initiatives to reduce costs and improve operational efficiencies.

Q & A Highlights

• Q: Third Quarter Guide (Mitch Kummetz, from Seaport Research)

A: Consolidated comp is expected to be low single digits, with Journeys also in low single digits. (Tom George)

• Q: September and October Expectations (Mitch Kummetz, from Seaport Research)

A: Expect positive comps to continue into September and October, driven by strong product assortments and consumer demand. (Mimi Vaughn)

• Q: Holiday Product Assortment (Mitch Kummetz, from Seaport Research)

A: Expect a diversified assortment to drive holiday sales, with strength in both athletic and casual categories. (Mimi Vaughn)

• Q: Serving Teen Girl Consumer (Mitch Kummetz, from Seaport Research)

A: Doubling down on serving the female consumer with refined segmentation, improved marketing, and elevated assortments. (Mimi Vaughn)

• Q: Store Refresh and Updated Concept (Mitch Kummetz, from Seaport Research)

A: Store refresh to be completed before the holiday season, with a new concept being tested in high-volume locations starting in October. (Mimi Vaughn)

• Q: Johnston & Murphy Marketing (Mantero Moreno-Cheek, from Jefferies)

A: Pleased with the new brand marketing campaign, focusing on new products and innovation to drive sales. (Mimi Vaughn)

• Q: Back-to-School Trends (Mantero Moreno-Cheek, from Jefferies)

A: Diversification and increased interest in footwear across various brands and styles, with higher average selling prices. (Mimi Vaughn)