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GI

GENESCO INC (GCO)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 delivered a clean top- and bottom-line beat versus expectations: revenue $474.0M (+4% YoY) and EPS loss improved to ($2.02) GAAP / ($2.05) non-GAAP, with comps +5% led by Journeys +8% and SG&A leverage of 170 bps . Versus Street, revenue and EPS were ahead: $474.0M vs $463.2M consensus and ($2.05) vs ($2.09) consensus, respectively (both small beats).*
  • Management reiterated FY26 adjusted EPS guidance of $1.30–$1.70 despite newly elevated reciprocal tariffs; raised total sales outlook to +1%–2% (from flat to +1%) on FX tailwind, and narrowed comps to +2%–+3% (from +2%–+4%) .
  • Journeys’ transformation continued: athletic penetration rose, average selling price increased ~12%, and 4.0 store remodels delivered >25% sales lift; 39 remodels completed in Q1, targeting 75+ by year-end .
  • Key stock-relevant narrative: sustained Journeys momentum, tariff mitigation plans (estimated $15M unmitigated cost in branded business offset through sourcing, pricing, and cost actions), and reiterated FY26 EPS range despite macro and tariff uncertainty .

What Went Well and What Went Wrong

  • What Went Well

    • Journeys momentum: comps +8% (third straight positive quarter), broad-based strength across seven brands; ASP up ~12% as premium product mix expands .
    • Expense control: SG&A at 52.5% of sales, 170 bps leverage YoY, driven by lower occupancy/bonuses and cost savings programs .
    • 4.0 store remodels: 39 stores remodeled with >25% sales lift; plan to reach 75+ by year-end, signaling durable comp support into back-to-school/holiday .

  • What Went Wrong

    • Gross margin rate declined: 46.7% vs 47.3% YoY (adjusted -90 bps), reflecting mix shift toward athletic at Journeys/Schuh, higher promotion at Schuh, and liquidation in Brands .
    • Johnston & Murphy softness: comps -2% with factory channel pressure, offsetting slight strength in full-line retail and online; segment operating margin compressed to 0.7% vs 3.0% YoY .
    • Tariff overhang: management quantified ~$15M unmitigated tariff cost in branded business at current rates, requiring mitigating actions and pricing later in the year .

Financial Results

Multi-period performance (YoY and sequential; periods left→right = oldest→newest)

MetricQ1 FY25Q4 FY25Q1 FY26
Revenue ($USD Millions)$457.6 $745.9 $474.0
GAAP EPS ($)($2.22) $3.06 ($2.02)
Non-GAAP EPS ($)($2.10) $3.26 ($2.05)
Gross Margin %47.3% 46.9% 46.7%
Adjusted Gross Margin %47.6% 47.2% (FY only prior) —46.7%
SG&A % of Sales54.2% 40.5% 52.5%
Operating Margin % (GAAP)-7.0% 6.2% -5.9%
Operating Margin % (Adj)-6.5% 6.4% -5.9%

Q1 FY26 actual vs consensus (beats/misses)

Metric (Q1 FY26)ActualConsensusDelta
Revenue ($USD Millions)$474.0 $463.2*+$10.8 (beat)
EPS ($)($2.05) ($2.09)*+$0.04 (beat)
  • Note: CFO highlighted EPS would have been $0.05 better absent Q1 buybacks, which were dilutive in a loss quarter but accretive for the full year .

Segment breakdown (sales and operating income)

SegmentQ1 FY25 Sales ($M)Q1 FY26 Sales ($M)YoY %Q1 FY25 OI ($M)Q1 FY26 OI ($M)
Journeys Group259.4 272.6 +5%(18.8) (15.3)
Schuh Group92.3 95.9 +4%(5.9) (6.1)
Johnston & Murphy79.2 76.8 -3%2.4 0.5
Genesco Brands Group26.6 28.6 +8%(1.0) 0.7
Corporate/Other———(8.8) (7.9)
Total457.6 474.0 +4%(32.1) (28.1)

KPIs and operating metrics

KPIQ1 FY25Q1 FY26
Total comp sales-5% +5%
Journeys comp-5% +8%
Schuh comp-7% +1%
Johnston & Murphy comp-3% -2%
Same-store sales-7% +5%
E-commerce comp+3% +7%
E-commerce as % retail sales23% 23%
Ending store count1,321 1,256
Inventory ($M)$392.7 $450.8 (+15% YoY)
Share repurchasesnone in Q1 604,531 shares; $12.6M @ $20.79
Capex / D&A ($M)$6 / $13 $19 / $13

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adj Diluted EPS (cont. ops)FY26$1.30–$1.70 $1.30–$1.70 Maintained
Total Sales GrowthFY26Flat to +1% (incl. ~$14M FX headwind; ~-$30M closures) +1% to +2% (FX tailwind; comps narrowed) Raised
Comparable SalesFY26+2% to +4% (prior) +2% to +3% Narrowed/lowered high end
Tax Rate AssumptionFY26~29% ~29% Maintained
Share Repurchase AssumptionFY26No further repurchases No further repurchases Maintained
Segment ColorFY26Journeys: low-single ↑; Schuh: low-single ↓; J&M: low-single ↑; Brands: low-single ↓ Journeys: low-single ↑; Schuh: low-single ↑ (improved); J&M: low-single ↑; Brands: high-single ↓ Schuh improved; Brands weaker

Earnings Call Themes & Trends

TopicQ3 FY25 (Dec-24)Q4 FY25 (Mar-25)Q1 FY26 (Jun-25)Trend
Tariffs / TradeRisk disclosed; limited impact discussed Risk disclosed; planning prudently Reciprocal tariffs: ~10% overall China exposure; ~$15M unmitigated cost in branded; mitigation via re-sourcing, cost, selective pricing; expect to offset much of impact Rising headwind; active mitigation
Journeys product & 4.0 storesBack-to-school strength; reset stores Double-digit comps; strategic plan momentum Comps +8%; ASP +12%; 4.0 remodels 39 stores; >25% lift; 75+ planned in FY26 Accelerating
Digital / E-comm24% of retail sales 30% of retail in Q4 23% in seasonally lower Q1 Strong channel; seasonal mix
U.K./Schuh consumerComps -1%; cautious Comps +2%; improving Comps +1%; category and consumer still selective Mixed/slightly better
Inventory/capex/store fleetInventory +1% YoY; closures ongoing Inventory +12% for Journeys growth; cost savings achieved Inventory +15% to support Journeys; 26 closures; capex $19M; remodel cadence up Investing, optimizing fleet
Pricing / ASP——ASP +12% at Journeys; brands with momentum can take price; consumer stretching for must-have items Positive mix/price backdrop

Management Commentary

  • CEO Mimi Vaughn: “Third consecutive quarter of positive comparable sales increases… driven by Journeys… our cost structure realignment and store optimization helped drive a nice year-over-year improvement in operating income.”
  • On tariffs and mitigation: “We are well-diversified… limited and reducing exposure to China… plan to offset much of the impact this year” .
  • On Journeys strategy: “Athletic grew well into the double digits… now more than a third of footwear sales… 4.0 stores have delivered a sales lift of more than 25%… 39 stores to 75+ this year” .
  • CFO Sandra Harris: “Adjusted EPS would have been $0.05 better had we not opportunistically bought back shares… reiterating full-year adjusted EPS guidance of $1.30 to $1.70, incorporating the impact of current tariffs.”

Q&A Highlights

  • Brand pipeline and scaling: Newer athletic brands (e.g., Hoka, reintroduced Saucony) validate Journeys in lifestyle running; start in ~50+ doors and scale quickly based on demand .
  • Category mix and margins: Canvas/vulcanized remains pressured; athletic strength offsetting, with premium mix driving higher ASPs despite lower unit margins; expecting gross margin pressure to ease in 2H as anniversary passes .
  • Back-half drivers: Expect positive comps despite tougher compares via better allocations, expanded premium assortment, accelerated remodels (75+ by year-end), and targeted marketing to broaden teen female reach .
  • Q2 setup: Journeys tracking similar to Q1; Schuh/J&M softer; marketing pull-forward and tariff timing imply SG&A deleverage of ~100–140 bps and EPS ~$0.40–$0.50 below last year in Q2 before back-half offset .
  • Pricing power: Limited vendor price increases so far; brands with momentum have more pricing latitude; consumer is trading up for must-have items .

Estimates Context

  • Q1 FY26 vs S&P Global consensus: revenue $474.0M vs $463.2M (beat); EPS ($2.05) vs ($2.09) (beat); each based on 3 estimates.*
  • FY26 EPS consensus $1.57 sits modestly above the midpoint of reiterated $1.30–$1.70 guidance, implying Street expects mitigation to largely offset tariff impact and back-half execution to deliver leverage.*
  • Potential revisions: Near-term (Q2) downside flagged by management may lead to quarterly estimate trims, but full-year numbers likely hold near current range given reaffirmed EPS and improved sales outlook (FX tailwind) .

Key Takeaways for Investors

  • Journeys is the engine: +8% comps, +12% ASP, 4.0 remodels >25% lift—sustained product and format momentum into back-to-school appears intact .
  • Execution vs tariffs: With ~10% China exposure overall and ~$15M branded tariff headwind, multi-pronged mitigation (re-sourcing, cost-out, targeted pricing) supports reiterated FY EPS guidance—a critical de-risking signal .
  • Mix dynamics: Athletic growth boosts ASP and dollars but compresses rate; expect gross margin rate headwind to moderate later in FY26 as mix stabilizes and promotional pressure at Schuh normalizes .
  • Capital deployment: Q1 buybacks (~5% of share count) were dilutive in the quarter but accretive to FY EPS; ~$29.8M authorization remains, but guidance assumes no further repurchases .
  • Near-term setup: Management telegraphed a softer Q2 (marketing pull-forward, tariff timing), with back-half offset from seasonality, remodel lift, and stronger allocations—positioning FY to track guidance .
  • Valuation watchpoint: Street FY26 EPS ~$1.57* sits within guidance; sustaining Journeys comps and remodel ROI is key to multiple support while tariff headlines persist.
  • Risk checks: U.K. consumer selectivity and J&M factory-store pressures remain watch items; inventory build (+15% YoY) is intentional to support Journeys but warrants monitoring for turns .

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  • Values retrieved from S&P Global.