US' Genesco lifts FY26 sales outlook up to 4% after 4% rise in Q2

The company has reported a GAAP loss per share of $1.79 compared with $0.91 last year, while non-GAAP EPS came in at $1.14 against $0.83 a year earlier. Gross margin slipped 100 basis points (bps) YoY to 45.8 per cent, largely due to higher promotional activity at Schuh and tariff impacts, Genesco said in a press release.

Brand-wise, Journeys Group delivered a standout 9 per cent comparable sales increase, driving overall growth, while Schuh fell 4 per cent and Johnston & Murphy posted a modest 1 per cent gain, and Genesco Brands rose 5 per cent.

At quarter-end, Genesco held $41 million in cash and $71 million in total debt, while inventories rose 11 per cent YoY. The company operated 1,253 stores, down 5 per cent YoY.

“We are pleased to report another quarter that exceeded expectations and our fourth consecutive quarter of positive comparable sales growth. The momentum from the second half of last year has continued in Fiscal 2026, highlighted by Journeys’ high-single-digit comp increase as our strategic plan to accelerate growth continues to gain traction,” said Mimi E Vaughn, board chair, president and CEO. “Our focus on product elevation, enhanced customer experience, and strengthened brand positioning is resonating with our broader target teen customer base, as we outperform the market and drive increased share.”

In the first half (H1) of FY25, Genesco Inc reported net sales of $1.02 billion. Cost of sales was $548.8 million (53.8 per cent of net sales), resulting in a gross margin of $471.1 million (46.2 per cent of net sales). Selling and administrative expenses stood at $513.3 million (50.3 per cent), while asset impairments and other charges were $0.4 million.

This led to an operating loss of $42.6 million. The loss from continuing operations before income taxes in H1 totalled $45.7 million, with an income tax benefit of $6 million.

Genesco now expects FY26 sales to rise 3–4 per cent YoY, up from prior guidance of 1–2 per cent. Comparable sales are forecast to grow 4–5 per cent. The company reiterated adjusted EPS guidance of $1.3–$1.7. Comparable sales are projected to rise 4 to 5 per cent, also revised upward from the prior outlook of 2 to 3 per cent, signalling stronger consumer demand and operational execution.

“Back to school is off to a very good start in the third quarter with Journeys comping nicely positive on the positive comps for the same period last year. While near-term uncertainty around tariff rates and consumer demand remains elevated, we are encouraged by our recent performance as we prepare for the start of the upcoming holiday season. I am confident in our ability to navigate the current environment and build on our momentum,” added Vaughn.

“With Journeys strong performance year-to-date, we are raising our full year revenue outlook. The increased top-line and corresponding leverage are allowing us to offset additional pressure on gross margins from higher tariffs and a very promotional UK marketplace,” said Sandra Harris, Genesco's senior vice president finance and chief financial officer (CFO).

ALCHEMPro News Desk (SG)