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GI

GENESCO INC (GCO)·Q3 2025 Earnings Summary

Executive Summary

  • Revenue $596.3M, +3% YoY; total comps +6% with Journeys +11%, e-commerce +15% (24% penetration). Adjusted EPS $0.61; GAAP EPS ($1.76) due to a $26.3M U.S. valuation allowance .
  • Results beat Street: EPS $0.61 vs consensus $0.30; revenue $596.3M vs $577.7M consensus; meaningful beats driven by Journeys assortment resets and stronger digital execution .
  • FY25 guidance raised: adjusted EPS to $0.80–$1.00 (from $0.60–$1.00); sales down 1% to flat (from down 1%–2%); tax rate ~27% .
  • Catalysts: sustained Journeys momentum into holiday/Q4, store footprint optimization, and disciplined promo posture; caution on U.K. macro (Schuh) and premium nonathletic (Johnston & Murphy) temper upside .

What Went Well and What Went Wrong

What Went Well

  • Journeys comps inflected and accelerated to +11% on improved product newness and visual store resets; total company comps +6% with digital +15% and penetration >24% .
    Quote: “Our outperformance was driven by Journeys… underscoring the outstanding execution… double-digit comps… enhanced store, digital and social experiences” — Mimi Vaughn .
  • Raised FY25 adjusted EPS to $0.80–$1.00 and sales outlook to down 1% to flat, reflecting stronger Q3 and positive start to Q4; Journey’s expected low single-digit FY25 sales growth .
  • Cost actions and optimization: SG&A leveraged 10 bps YoY to 46.1%; closed 12 Journeys stores in Q3 (41 YTD), cost-savings program tracking to $45–$50M run-rate reduction by FY25-end .

What Went Wrong

  • Gross margin down 30 bps YoY to 47.8% on mix shift toward lower-initial-margin athletic footwear at Journeys despite higher ASPs; adjusted operating margin 1.7% flat YoY .
  • GAAP EPS loss ($1.76) driven by a $26.3M U.S. valuation allowance; adjusted EPS positive but only modestly up YoY ($0.61 vs $0.57) .
  • Schuh and Johnston & Murphy comps -1% each, with U.K. consumer headwinds and U.S. softness in premium nonathletic footwear; Q4 anticipated to be promotionally driven in U.K. .

Financial Results

MetricQ3 FY24 (oldest)Q2 FY25Q3 FY25 (newest)
Revenue ($USD Millions)$579.3 $525.2 $596.3
GAAP EPS ($)$0.60 ($0.91) ($1.76)
Adjusted EPS ($)$0.57 ($0.83) $0.61
Gross Margin (%)48.1% 46.8% 47.8%
Adjusted Operating Margin (%)1.9% (1.8%) 1.7%
Total Comparable Sales (%)(4%) (2%) +6%
Same Store Sales (%)(7%) (4%) +4%
Comparable E-commerce Sales (%)+8% +8% +15%
E-commerce Penetration (% of retail sales)21% 22% 24%

Segment breakdown (Sales and Operating Income):

SegmentQ3 FY24 Sales ($M)Q3 FY25 Sales ($M)Q3 FY24 Op Inc ($M)Q3 FY25 Op Inc ($M)
Journeys Group$349.4 $362.5 $12.0 $13.2
Schuh Group$118.1 $121.8 $5.5 $3.1
Johnston & Murphy Group$81.4 $78.5 $2.7 ($0.1)
Genesco Brands Group$30.4 $33.5 ($1.6) $3.7
Corporate & Other——($7.8) ($9.7)
Total Operating Income——$10.9 $10.2

KPIs

KPIQ3 FY24Q2 FY25Q3 FY25
Cash ($M)$21.7 $45.9 $33.6
Total Debt ($M)$128.2 $77.8 $100.1
Inventory YoY (%)—(8%) +1%
Store Count (Total)1,360 1,314 1,302
Share Repurchases—381,711 shares; $9.3M 17,922 shares; $0.4M

Estimates vs Actual (Q3 FY25)

MetricConsensusActual
EPS ($)$0.30 $0.61 (Adjusted)
Revenue ($M)$577.73 $596.33

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Sales (YoY)FY25Down 1%–2% (or flat to down 1% excl. 53rd week) Down 1% to flat (or flat to up 1% excl. 53rd week) Raised
Adjusted EPS ($)FY25$0.60–$1.00 $0.80–$1.00 Raised
Tax Rate AssumptionFY25~27% ~27% Maintained
Journeys SalesFY25Mid-single-digit decline (color) Low single-digit increase (color) Raised
Schuh SalesFY25Low single-digit decline (color) Relatively flat (color) Raised
Johnston & Murphy SalesFY25Flat (color) Mid-single-digit decline incl. store closings (color) Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 FY25)Previous Mentions (Q2 FY25)Current Period (Q3 FY25)Trend
Journeys assortment/brand positioningNew leadership; accelerate assortment elevation; loyalty progress; cost reduction program Early BTS demand; Journeys comps improving; pipeline confidence Style-led teen focus with sharp point on “Her”; double-digit comps; new store concept rollout (10 opened) Improving
Digital/CRM/LoyaltyDigital penetration 23%; loyalty foundations E-comm +8%; penetration 22% E-comm +15%; penetration >24%; All Access >4M members; CRM-driven personalization Improving
U.K. macro (Schuh)U.K. consumer weaker than U.S.; inflation impacts Schuh comps -2%; more sale mix; U.K. promos Comps ~flat/-1%; promo environment persists; Schuh Club ~3M members; brand access improving in future seasons Stabilizing, cautious
Promotional environmentLower markdowns at Journeys; margin mix shifts Higher sale mix at Schuh pressured margins Journeys less promotional vs market; margin pressure mainly mix (athletic) Mixed
Store footprint optimizationQ1 closed 21 stores; evaluate up to 50 Journeys closures Q2 closed 12 stores; footprint optimization ongoing Q3 closed 14; Journeys -12; “optimize footprint,” drive productivity; landlord support for remodels Ongoing
Brand access/exclusivesBuilding partnerships; assortment diversification BTS driven by multiple brands, not just one Better access to key brands; breadth and depth across 7–8 brands driving business; Schuh leveraging Journeys synergies Improving

Management Commentary

  • Strategy: “We have built 3 strategic growth priorities around product, brand and experience… to fuel our new positioning and engage and excite more customers” — Mimi Vaughn .
  • Demand and promo posture: “Journeys was not promotional… strength of our assortment carried the business… a lot of full-price selling” — Mimi Vaughn on Q4 start and Black Friday .
  • Margin mix: “It’s not more markdowns… it really is mix… moving from canvas/vulcanized to broader casual and athletic brands… higher ASPs” — Mimi Vaughn .
  • Store optimization: “We’re not necessarily calling it closing stores; we’re calling it optimizing our footprint… more sophisticated capabilities to drive traffic to other stores or online” — Mimi Vaughn .

Q&A Highlights

  • Journeys assortment breadth/depth and brand allocations: management emphasized multi-brand strength (7–8 brands) and stronger partnerships to serve the style-led teen, particularly “Team Girl” .
  • New store concept rollout: 10 opened in Q3; plan ~15 in FY25 with potential acceleration based on results; landlord enthusiasm supports pull-forward opportunities .
  • Q4 Journeys comps: expected positive but below Q3’s +11% due to possible pull-forward of winter purchasing; Black Friday performed well with full-price sell-through .
  • Schuh brand access: synergies with Journeys; line-of-sight to improved access beginning spring; U.K. consumer headwinds remain .
  • Demand creation: increased brand marketing, social/TikTok presence, CRM/loyalty analytics to personalize and drive awareness and conversion .

Estimates Context

  • S&P Global consensus was unavailable in this session due to data access limits. Using third-party consensus as proxy, GCO delivered a beat: adjusted EPS $0.61 vs $0.30 consensus; revenue $596.3M vs $577.7M consensus .
  • Given raised FY25 guidance (EPS to $0.80–$1.00; sales down 1% to flat), Street models likely need upward revisions to FY25 EPS and Journeys segment sales, while trimming Schuh/J&M assumptions due to management’s more cautious stance .

Key Takeaways for Investors

  • Journeys turnaround is gaining traction; breadth and depth across key brands plus new store concept underpin continued comp strength into holiday/Q4 .
  • Margin pressure is primarily mix-driven; higher ASPs and cost actions partially offset — watch gross margin trajectory as assortment shifts further into athletic .
  • FY25 outlook improved; raised EPS and sales guidance suggest estimate revisions upward, with Journeys expected low-single-digit FY25 sales growth .
  • Schuh remains exposed to U.K. macro and promotional intensity; access improvements slated for spring could aid 2H performance .
  • Johnston & Murphy pressured by premium nonathletic softness; near-term guided lower; initiatives to drive more casual, multi-category growth are in flight .
  • Ongoing footprint optimization and $45–$50M cost-savings program support operating leverage as comps improve .
  • Trading lens: Near-term upside skew if Q4 comps at Journeys remain positive with limited promo; risk is U.K. consumer softness and mix-driven margin headwinds. Reaction drivers include holiday performance updates and evidence of sustained digital/loyalty conversion gains .

Additional Relevant Q3 Press Releases

  • CFO appointment: Genesco Names Sandra Harris Chief Financial Officer (Oct 1, 2024), providing finance leadership transition context highlighted on the call .
  • Q3 results reporting schedule (Nov 20, 2024) .