Q2 2027 Genesco Inc Earnings Call Transcript
Key Points
- Genesco Inc (GCO) delivered second-quarter bottom-line results significantly better than last year and well ahead of expectations, with every business achieving gains versus plans.
- Journeys delivered its eighth consecutive quarter of positive comparable sales, with both store and e-commerce comps positive, and achieved a meaningful 180 basis points of expense leverage.
- Johnston & Murphy posted its third consecutive quarter of positive comp gains, driven by newness, improved assortments, and the successful Peyton Manning campaign, which has been extended for two additional years.
- schuh's gross margin improved 300 basis points year-over-year as the company prioritized full-price selling, with the full-price mix increasing by 10 percentage points of overall sales.
- The company raised its full-year adjusted EPS guidance to the high end of the $2 to $2.40 range, reflecting confidence in its strategic initiatives and earnings potential.
- The Journeys 4.0 store format continues to outperform, delivering in excess of a 25% sales lift, with the company increasing its full-year target to 95 store openings.
- Genesco Inc (GCO) received approximately $22 million in tariff refunds during the quarter, which are excluded from adjusted results and will be deployed for growth investments and shareholder returns.
- Total company revenue decreased 3% to $530 million, with overall comparable sales declining 1%, driven by store closures, reduced promotional activity at schuh, and the license transition ahead of the Wrangler launch.
- schuh's comparable sales declined 9% due to the intentional pullback on discounting and promotional activity, and the UK consumer market remains challenged and price sensitive.
- The company now expects flat comparable sales for the full year, down from its prior expectation of up 1% to 2%, reflecting greater sales pressure at schuh.
- Third-quarter operating income is expected to be moderately below last year due to sales declines, increased marketing investments, and the timing of license exit losses.
- E-commerce comparable sales declined 6% overall, with schuh's online channel disproportionately impacted by the reduction in promotional activity.
- The company ended the quarter with 67 net fewer stores than a year ago, representing approximately 5% of its fleet and square footage, which contributed to the sales decline.
- SG&A expense deleveraged 40 basis points as a percentage of sales due to lower sales volume, and the company expects further deleverage of approximately 30 basis points for the full year.
Good day, everyone, and welcome to Genesco's second quarter fiscal 2027 conference call. Just a reminder, today's call is being recorded.
I will now turn the call over to Darryl MacQuarrie, Senior Director of FP&A and Investor Relations. Please go ahead, sir.
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Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal 2027 results. During today's call, participants expect to make forward-looking statements that reflect our expectations as of today, and actual results could differ materially. Genesco refers you to this morning's earnings release and the company's SEC filings, including its most recent 10-K and 10-Q filings, for some of the factors that could cause actual results to differ from the expectations reflected in the forward-looking statements made today. We also expect to refer to certain adjusted financial measures during the call.
All non-GAAP financial measures are reconciled to their GAAP
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