7 days ago
American retailer Genesco raises FY26 sales outlook to 1â2% growth
American footwear retailer Genesco expects total sales to increase by 1 to 2 per cent in fiscal 2026 (FY26), up from the previous forecast of flat to 1 per cent growth, due to favourable foreign exchange impacts. The company also narrowed its comparable sales growth outlook to 2 to 3 per cent, compared to the earlier range of 2 to 4 per cent.
Genesco expects FY26 sales to rise 1â€'2 per cent, up from its prior flat to 1 per cent forecast. In Q1 FY26, net sales grew 4 per cent to $474 million, driven by 5 per cent comparable sales growth. Journeys, Schuh, and Genesco Brands saw gains, offsetting a decline at Johnston & Murphy. The company reaffirmed its full-year EPS guidance of $1.30â€'$1.70 despite tariff-related uncertainty.
Net sales for the first quarter (Q1) of FY26 increased 4 per cent to $474 million compared to $458 million in the first quarter of fiscal 2025. The net sales increase reflects a 5 per cent growth in comparable sales, including a 7 per cent rise in e-commerce comparable sales and a 5 per cent increase in same store sales, and increased wholesale sales, partially offset by the impact of net store closings.
The overall sales increase of 4 per cent for the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025 was driven by an increase of 5 per cent at Journeys, an increase of 4 per cent at Schuh and a 7 per cent increase at Genesco Brands, partially offset by a decrease of 3 per cent at Johnston & Murphy. On a constant currency basis, Schuh sales were up 1 per cent for the first quarter this year, the company said in a press release.
The company reported a gross margin of 46.7 per cent for Q1, down from 47.3 per cent a year earlier. On an adjusted basis, the gross margin declined by 90 basis points from 47.6 per cent last year, primarily due to changes in brand mix at Journeys and Schuh, increased promotional activity at Schuh, and lower margins at Genesco Brands linked to product liquidations from discontinued licences.
Selling and administrative expenses improved to 52.5 per cent of sales, down 170 basis points from the prior year, reflecting reduced occupancy costs, lower performance-based compensation, and ongoing cost-saving initiatives.
The company posted a GAAP operating loss of $28.1 million, or 5.9 per cent of sales, compared to a loss of $32.1 million, or 7 per cent, in the same period last year. On an adjusted basis, the operating loss narrowed to $27.9 million from $30 million, with the adjusted operating margin improving to -5.9 per cent from -6.5 per cent year-on-year.
It reported a GAAP loss from continuing operations of $21.2 million in Q1, an improvement from the $24.3 million loss recorded in the same period last year. On an adjusted basis, the Q1 loss totalled $21.5 million, or $2.05 per share, compared to $22.9 million, or $2.10 per share, in Q1 FY25.
The effective tax rate for the quarter rose to 28.5 per cent from 26.7 per cent last year. Excluding one-time items, the adjusted tax rate was 26.7 per cent, up from 26 per cent in the prior-year period.
'Following the significant momentum in last year's back half, we are pleased with our start to fiscal 2026 with both sales and profitability coming in above our expectations. Our first quarter performance was highlighted by our third consecutive quarter of positive comparable sales increases, with results once again driven by Journeys, as our strategic plan to accelerate growth and increase market share continues to gain traction. At the same time, the work we've done realigning our cost structure including our ongoing store optimisation initiatives, helped drive a nice year-over-year improvement in operating income,' Mimi E Vaughn, Genesco's board chair, president and chief executive officer , said.
'While an already choppy consumer environment has become more pronounced recently from the increased uncertainty due to tariffs, our diversified sourcing and mitigation actions position us well to manage the current tariff impact. In addition, our strong strategic positioning and track record of evolving our businesses in the face of market disruptions are giving us confidence in successfully navigating the current environment,' Vaughn continued.
