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GI

GENESCO INC (GCO)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $746M (+1% YoY; +7% excluding the prior-year 53rd week shift), gross margin expanded 60bps to 46.9%, and adjusted EPS rose 26% to $3.26; comps +10% with Journeys +14% and e-commerce +18% (30% of retail) .
  • Operating income increased 24% to $46.1M (adjusted $47.9M, 6.4% margin), with SG&A leveraged 60bps to 40.5% on rent and cost savings, partially offset by higher marketing and incentives .
  • FY2026 guidance: total sales flat to +1% (FX -$14M; store closures -$30M), adjusted EPS $1.30–$1.70, tax rate ~29%, gross margin down 20–30bps, SG&A leverage 50–70bps; capex $50–$65M; ~70 Journeys remodels planned .
  • Strategic catalyst: Journeys’ turnaround (higher ASPs, full-price selling, loyalty >10M, digital penetration 25% FY) and in-store remodel program showing double-digit lifts in comp, conversion, and ticket; management tone confident but acknowledges front-half gross margin pressure from mix and license exits .

What Went Well and What Went Wrong

What Went Well

  • Journeys delivered mid-teens comps and led full-price selling; management: “increased allocations and bets on key footwear brands and styles paid big dividends” .
  • Gross margin expanded 60bps YoY, driven by fewer markdowns at Journeys and improved margins at J&M and Brands Group .
  • Cost savings at the higher end of $45–$50M run-rate and SG&A leverage of 60bps; adjusted operating income up to $47.9M .

What Went Wrong

  • Schuh faced heightened U.K. promotional activity, driving a 170bps gross margin decline and lower Q4 operating income vs prior year .
  • Johnston & Murphy sales fell 6% YoY despite margin improvement; traffic softness in premium non-athletic footwear pressured results earlier in the year .
  • Front-half FY26 gross margin outlook pressured by assortment mix at Journeys and clearing inventory tied to license exits at Brands Group; wage and rent inflation add headwinds .

Financial Results

Consolidated metrics (Q2 → Q3 → Q4 FY2025)

MetricQ2 FY2025Q3 FY2025Q4 FY2025
Revenue ($USD Millions)$525.2 $596.3 $745.9
GAAP Diluted EPS ($)($0.91) $0.60 $3.06
Adjusted Diluted EPS ($)$0.83 $0.61 $3.26
Gross Margin %46.8% 47.8% 46.9%
SG&A % of Sales48.6% 46.1% 40.5%
Operating Income ($USD Millions)($10.3) $10.2 $46.1
Adjusted Operating Income ($USD Millions)($9.3) $10.3 $47.9
Adjusted EBITDA ($USD Millions)——$60.9

Segment breakdown (Q4 FY2025 vs Q4 FY2024)

SegmentSales Q4 FY2024 ($MM)Sales Q4 FY2025 ($MM)YoY %Op Inc Q4 FY2024 ($MM)Op Inc Q4 FY2025 ($MM)
Journeys Group$455.0 $478.1 +5.1% $32.3 $43.2
Schuh Group$146.1 $141.2 -3.4% $9.3 $5.6
Johnston & Murphy$97.6 $91.5 -6.3% $6.1 $6.6
Genesco Brands Group$40.2 $35.2 -12.5% ($0.3) $1.4
Total$738.9 $745.9 +1.0% $37.3 $46.1

KPIs and Operating metrics

KPIQ4 FY2024Q4 FY2025
Total Comparable Sales(4%) +10%
Journeys Comparable Sales(5%) +14%
Schuh Comparable Sales(5%) +2%
J&M Comparable Sales+8% 0%
Same Store Sales(7%) +6%
Comparable E-commerce Sales+5% +18%
E-commerce Share of Retail Sales27% 30%
Inventory YoY—+12%
Store Count (Total)1,341 1,278
Free Cash Flow (Q4)—~$103M

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Sales GrowthFY2026—Flat to +1%; FX -$14M; store closures -$30M New
Adjusted Diluted EPSFY2026—$1.30–$1.70 New
Tax RateFY2026—~29% New
Gross MarginFY2026—Down 20–30bps YoY New
SG&A % of SalesFY2026—Leverage 50–70bps New
CapexFY2026—$50–$65M New
D&AFY2026—$50–$55M New
Journeys SalesFY2026—Low single-digit increase New
Schuh Sales/CompsFY2026—Comps slightly positive; sales down low single digits (FX) New
J&M SalesFY2026—Low single-digit increase New
Genesco Brands SalesFY2026—Low single-digit decrease (license expirations) New
Share RepurchasesFY2026 Assumption—None assumed New
Tariff ExposureFY2026—≤15% of COGS exposed to China; higher tariffs incorporated New
FY2025 Adjusted EPS (for context)FY2025 Actual vs Q3 Guide$0.80–$1.00 (Q3 guide) $0.94 actual Met higher end

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4 FY2025)Trend
Journeys turnaroundQ2: comps turned positive in July; elevated assortment; traffic outpaced market . Q3: Journeys comps +11%; full-price selling; store visual reset .Q4: Journeys comps +14%; higher ASPs; robust full price selling; double-digit growth online and in-store .Strengthening; momentum broad-based across brands.
Digital & omnichannelQ2/Q3: e-comm comps +8–15%; BOPIS acceleration; digital penetration >24% .Q4: e-comm comps +18%; 30% of retail; FY penetration 25% .Rising penetration and profitability.
Store optimization & remodelsQ3: rightsizing fleet; closures accretive; prototypes launched .Q4: ~16 remodels to date with double-digit lifts; ~70 planned FY26 (7% fleet) .Execution ramping; tangible productivity gains.
UK macro/promotions (Schuh)Q3: tough U.K. environment; promos required; margin down; comps improved to near-flat .Q4: continued promo pressure; Schuh gross margin -170bps; comps +2% .Headwinds persist; cautious stance.
Product mix/marginsQ2/Q3: mix shift at Journeys lowered GM; boot category stabilizing .Q4/FY26: front-half GM pressure from mix and license exits; ASPs up driving gross profit dollars .Near-term margin pressure; dollars per unit improving.
Loyalty & dataQ3: ~4M All Access members; CRM campaigns .FY: Loyalty >10M members; enhanced CRM/data to drive repeat purchases .Scaling first-party data; supports LTV/retention.
Tariffs/supply chainPrior: standard risk disclosures .FY26: ≤15% COGS China exposure; guidance includes tariff impacts .Managed exposure; incorporated in outlook.
Wage/rent inflationPrior: recognized pressures .FY26: wage pressures (U.K., U.S.) and higher rents impacting front-half productivity .Cost inflation weighs on near-term margins.

Management Commentary

  • “Our performance was driven by Journeys… fuel[ing] strong full priced selling and mid-teens comp growth… sales trends at Schuh and Johnston & Murphy further improved… highest level of the year.” — Mimi Vaughn .
  • “We achieved the higher end of our target run rate range of $45 to $50 million of total expense savings…” — Cassandra Harris .
  • “We expect overall comp sales for fiscal 2026 to be up 2% to 4%… offset by roughly $30 million from net store closures and approximately $14 million from a weaker pound sterling.” — Cassandra Harris .
  • “The remodels are an essential part of Journeys’ strategy… double-digit improvements in comp, conversion, average transaction size, traffic.” — Mimi Vaughn .

Q&A Highlights

  • Journeys comps outlook: management expects stronger comps in H1 given easier compares, with continued positive comps in H2; store closures will pressure top-line but benefit margins .
  • Margin shape: front-half gross margin pressured by assortment mix at Journeys and Brands license exits; wage and rent inflation also affect productivity; SG&A leverage expected 50–70bps FY26 .
  • Remodel program: ~70 Journeys remodels planned in FY26; early results show double-digit lifts in key KPIs and faster paybacks vs new stores .
  • Inventory & shape of year: inventories built in Journeys to support demand; H1 higher comp growth but less profit growth; profitability accelerates in H2 as volumes and SG&A leverage improve .

Estimates Context

  • We attempted to retrieve Wall Street consensus EPS and revenue estimates (S&P Global) for Q4 FY2025 and the prior two quarters; data was unavailable due to an S&P Global API daily request limit at time of analysis. As a result, we cannot provide actual vs consensus comparisons in this report [GetEstimates error].
  • Investors should note Q4 adjusted EPS of $3.26 and revenue of $745.9M against internal expectations and guidance, with management stating results “exceeded expectations” and operating profit at the high end of forecast .

Key Takeaways for Investors

  • Journeys-led turnaround with higher ASPs and full-price selling is driving comp and margin improvement; continued strategic brand access and assortment elevation support FY26 comps of +2–4% company-wide .
  • Near-term margin headwinds (product mix, license exits, wage/rent inflation) likely compress front-half FY26 gross margin; SG&A leverage and remodel productivity aim to offset in back half .
  • Schuh remains a watch item given U.K. promotional intensity and FX headwinds; guidance embeds low-single-digit sales decline despite slightly positive comps .
  • Capital deployment is shifting toward growth investments (remodels, digital, technology) with FY26 capex $50–$65M; no buybacks assumed in guidance, preserving flexibility .
  • Cost discipline is real (run-rate savings $45–$50M), fleet optimization accretive to OI, and store transfers mitigating closure impacts; expect operating leverage as volumes recover .
  • FY26 adjusted EPS guided to $1.30–$1.70; trajectory depends on execution of Journeys growth plan and back-half seasonality; traders should monitor quarterly margin cadence and remodel rollouts .
  • With digital now 25% of FY retail sales and loyalty >10M members, data-driven CRM and omnichannel capabilities are key structural advantages to sustain comp momentum .