Sign in

You're signed outSign in or to get full access.

GI

GENESCO INC (GCO)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 FY26 delivered a top- and bottom-line beat vs S&P Global consensus: revenue $545.965M vs $532.386M consensus and non-GAAP EPS $(1.14) vs $(1.25) consensus; comps +4% with Journeys +9% *.
  • Gross margin contracted 100 bps to 45.8% due to a promotional U.K. environment at Schuh and tariff impacts; SG&A leveraged 20 bps as a percent of sales, with ~200 bps leverage at Journeys .
  • Management raised FY26 sales outlook to +3–4% (from +1–2%) and comps to +4–5% (from +2–3%), while reiterating adjusted EPS $1.30–$1.70; Q3 specific color calls for sales +3–4% and EPS $0.15–$0.30 higher YoY .
  • Stock reaction catalysts: stronger back-to-school trends (Journeys double-digit comps early Q3), raised sales outlook, and evidence that Journeys 4.0 remodels are producing >25% lifts, despite ongoing tariff and UK margin headwinds .

What Went Well and What Went Wrong

What Went Well

  • Journeys momentum sustained: “Journeys comps are up double digits third quarter to date on top of double-digit comps for the same period last year” (CEO) .
  • Cost discipline and leverage: SG&A 48.4% of sales, leveraging 20 bps YoY, with Journeys delivering ~200 bps SG&A leverage on strong comps and store optimization (CFO) .
  • Strategic initiatives scaling: loyalty reached 12M members; Journeys 4.0 remodels showing >25% sales lift and higher traffic, conversion, and ATV (CEO) .

What Went Wrong

  • Gross margin pressure: down 100 bps to 45.8% on heavier Schuh promotions and tariffs; Genesco Brands margins impacted by license exits; partially offset by J&M margin improvement (pricing, lower markdowns, sourcing optimization) .
  • UK volatility: Schuh comps -4% and major traffic declines in May/June, requiring promotions to right-size inventory; management expects continued choppiness (CEO) .
  • Earnings still negative and worse YoY: adjusted EPS $(1.14) vs $(0.83) prior year; adjusted operating loss $(14.3)M vs $(9.3)M last year (press release/8-K) .

Financial Results

Quarterly Performance

MetricQ4 FY25Q1 FY26Q2 FY26
Net Sales ($USD Millions)$745.949 $473.973 $545.965
GAAP EPS ($)$3.06 $(2.02) $(1.79)
Non-GAAP EPS ($)$3.26 $(2.05) $(1.14)
Gross Margin (%)46.9% 46.7% 45.8%
SG&A (% of Sales)40.5% 52.5% 48.4%
Operating Income (Loss) ($USD Millions)$46.117 $(28.145) $(14.440)
Comparable Sales (%)+10% +5% +4%

Q2 FY26 vs Consensus

MetricConsensus Q2 FY26Actual Q2 FY26
Revenue ($USD Millions)$532.386*$545.965
Primary EPS ($)$(1.25)*$(1.14)

Estimates marked with *: Values retrieved from S&P Global.

Segment Breakdown (Sales and Operating Income)

SegmentQ2 FY25 Sales ($USD Millions)Q2 FY26 Sales ($USD Millions)Q2 FY25 Op Inc (Loss) ($USD Millions)Q2 FY26 Op Inc (Loss) ($USD Millions)
Journeys Group$298.846 $318.189 $(11.151) $(4.999)
Schuh Group$124.561 $126.595 $7.339 $(0.011)
Johnston & Murphy$71.037 $68.789 $(0.403) $(1.782)
Genesco Brands Group$30.744 $32.392 $2.672 $0.653
Corporate & Other——$(8.731) $(8.301)
Total$525.188 $545.965 $(10.274) $(14.440)

KPIs and Balance Sheet Highlights

KPIQ2 FY25Q2 FY26
E-commerce % of Retail Sales30% (Q4 FY25 ref); 22% (Q2 FY26 noted) — see quarter specificity22%
Total Comparable Sales−2% +4%
Same Store Sales−4% +5%
Comparable E-commerce Sales+8% +1%
Inventory ($USD Millions)$450.187 $501.008
Cash ($USD Millions)$45.855 $40.989
Total Debt ($USD Millions)$77.839 (LT only) $71.0 (Total)
Store Count1,314 1,253
Capex ($USD Millions)—$15

Comparable Sales by Segment (Q2)

SegmentQ2 FY25Q2 FY26
Journeys Group−1% +9%
Schuh Group−2% −4%
Johnston & Murphy−5% +1%
Total Genesco−2% +4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Diluted EPSFY26$1.30–$1.70 $1.30–$1.70 Maintained
Total Sales GrowthFY26+1% to +2% vs FY25 +3% to +4% vs FY25 Raised
Comparable Sales GrowthFY26+2% to +3% +4% to +5% Raised
Gross Margin YoYFY26Down 20–30 bps (prior view) Down 50–60 bps Lowered
SG&A LeverageFY26+50–70 bps +80–100 bps Raised
CapexFY26—$55–$65M Set/Disclosed
Tax Rate (adjusted)FY26~29% ~29% (ex-OBBBA) Maintained
Q3 Sales GrowthQ3 FY26—+3% to +4% New color
Q3 Gross MarginQ3 FY26—Deleverage 50–70 bps New color
Q3 SG&AQ3 FY26—Leverage >100 bps New color
Q3 EPSQ3 FY26—$0.15–$0.30 higher YoY New color

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 FY25, Q1 FY26)Current Period (Q2 FY26)Trend
Journeys product elevation & mix (casual/canvas/athletic)Q4: Journeys led with mid-teens comps; lower markdowns improved margins . Q1: Journeys comps +8%, balanced assortment; ASPs rising .Journeys comps +9% in Q2; double-digit comps early Q3; six brands posted double-digit gains; ASP and ATV up; deeper premium access .Strengthening
Journeys 4.0 store remodelsEarly roll-out; >25% lift cited, 29–39 remodels by Q1 .57 remodels; >25% sales lift; targeting >80 by year-end; focus on top 250 stores .Scaling up
UK market (Schuh)Q4: promotional pressure muted margins . Q1: Schuh maintained positive comps but environment cautious .Traffic drop in May/June; promotions to clear inventory; comps improved in July/August; expect volatility; initiatives to reduce non-accretive discounting .Mixed/Volatile
TariffsFY26 outlook included tariffs; mitigation plan outlined (diversifying sourcing, price actions) .Tariffs pressured margins (GBG); FY gross margin down 50–60 bps now; offset by SG&A leverage and raised sales outlook .Headwind, mitigated
J&M repositioningQ4: improved margins; FY headwinds . Q1: mixed; slight pressure .Q2 comps positive; gross margin up via pricing/sourcing; more newness planned .Improving
Licensing/Brands (Wrangler)—Multiyear Wrangler licensing; launch Fall 2026; GBG portfolio reset with license exits .Long-term growth optionality
Digital & LoyaltyQ4: e-com 30% of retail ; Q1: e-com 23% ; loyalty growth.e-com 22% of retail in Q2; loyalty at 12M; integrated storytelling across digital .Stable/expanding reach

Management Commentary

  • “Journeys comps are up double digits third quarter to date on top of double digit comps for the same period last year” (CEO Mimi Vaughn), highlighting continued share gains and back-to-school strength .
  • “With Journeys strong performance year-to-date, we are raising our full year revenue outlook… and reiterate our full year adjusted EPS guidance of $1.30 to $1.70” (CFO Cassandra Harris) .
  • “Schuh was considerably more promotional… to maintain share and right size inventories… we expect it will continue to be volatile” (CEO) .
  • “These [Journeys 4.0] stores… leading to a sales lift of more than 25%… more than 80 expected by year end” (CEO) .
  • “Free cash flow for the quarter was $72M… primarily attributable to the receipt of a U.S. Federal tax refund” (CFO) .

Q&A Highlights

  • Journeys assortment pivot and TAM expansion: Management emphasized a balanced three-pillar mix (casual/canvas/athletic), deeper brand access, and elevated price points driving higher ASPs/ATV (Seaport), with early-stage broader marketing (“Life on Loud”) to reach a larger teen audience .
  • Store remodel performance: Journeys 4.0 stores comping >25% lifts, attracting new customers, and enabling larger box considerations; plan to exceed 80 remodels by year-end (Jefferies) .
  • UK outlook and promotions: Schuh comps turned positive in July/August; team is cutting non-accretive discounting and focusing on conversion, but market remains promotional and volatile .
  • New brands (e.g., HOKA) and product elevation: Testing in select stores, expanding access; elevated athletic price points are gaining traction alongside casual .
  • Wrangler licensing: Significant runway for GBG; broad category potential across Western/workwear/casual, with first collection in Fall 2026 .

Estimates Context

  • Q2 delivered a beat vs S&P Global consensus on both revenue and EPS: $545.965M actual vs $532.386M consensus and $(1.14) non-GAAP EPS vs $(1.25) consensus* * *.
  • Street may raise top-line estimates for FY26 and Q3 following management’s higher sales outlook and strong back-to-school trends, while trimming margin assumptions (gross margin down 50–60 bps for FY, 50–70 bps deleverage in Q3) and increasing SG&A leverage expectations .
  • Forward quarterly consensus snapshots: Q3 FY26 revenue $618.623M*, EPS $0.88*; Q4 FY26 revenue $769.417M*, EPS $3.763* — watch for any upward sales revisions and margin recalibrations post-call*.

Estimates marked with *: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Journeys is the core engine; sustained comp strength and remodel-driven lifts provide visibility into back-half upside even as gross margins face tariffs/UK promotions .
  • Mix and pricing strategy are working: elevated product, higher ASPs, and premium access underpin ATV and conversion improvements, especially in-store .
  • Near-term headwinds are manageable: raised FY sales outlook and SG&A leverage offset incremental gross margin pressure; J&M margins improving, GBG reset ongoing .
  • UK remains the swing factor: promotions likely to persist; Schuh initiatives focus on newness and conversion to stabilize comps — monitor Q3 margin cadence .
  • Back-to-school momentum is a tangible catalyst; management signaled Q3 EPS $0.15–$0.30 higher YoY, supporting near-term estimate revisions and sentiment .
  • Longer-term optionality from licensing (Wrangler) and store fleet optimization may expand non-retail profit pools and ROIC over time .
  • Tactical trading setup: positive sales revisions and strong Journeys trends vs margin caution in UK/tariffs; net effect skewed constructive given increased SG&A leverage and raised sales guide .