Genesco(GCO 0.78%) reported first-quarter fiscal 2026 outcomes on June 4, 2025, with income rising 4% year-over-year (YoY) to $474 million and comparable gross sales up 5%, pushed primarily by an 8% year-over-year comparable gross sales improve at its Journeys banner. Administration reaffirmed adjusted earnings per share (EPS) steerage of $1.30 to $1.70 for fiscal 2026 (interval ending Jan. 31, 2026), citing sturdy price management, aggressive tariff mitigation efforts, and continued strategic transformation within the Journeys enterprise.
Journeys comp development drives Genesco outperformance
The Journeys banner achieved an 8% comparable gross sales improve within the quarter, marking the third consecutive interval of sturdy features. Athletic footwear now exceeds one-third of Journeys gross sales, and common promoting costs climbed 12% YoY. Throughout the corporate, each in-store and e-commerce channels registered mid- to high-single-digit development.
“Journeys comps elevated high-single digits because the preliminary section of our strategic plan to speed up development prolonged its momentum and Journeys continued to realize market share. The buyer setting stays uneven and with latest first quarter occasions, this choppiness has grow to be extra pronounced. Customers present a willingness to buy when there is a purpose like we noticed over Valentine’s Day and Easter and retreat when there’s not. They usually stay fairly selective. Our service provider and product groups proceed to innovate and add freshness to our assortments to fulfill buyers who’re in search of must-have product and a purpose to purchase one thing new and who’re passing on every part else.”
— Mimi Eckel Vaughn, Board Chair, President and Chief Govt Officer
The breadth of Journeys’ comp development throughout manufacturers and channels, alongside a 12% improve in common footwear promoting costs, alerts administration’s profitable repositioning in direction of higher-value, trend-responsive client segments.
Genesco mitigates tariff dangers via provide chain actions
Regardless of new U.S.-China reciprocal tariffs that would add $15 million in annual prices to the branded enterprise phase, administration cited a multi-year provide chain shift that has lowered China publicity to only over 10% of complete product as of the beginning of the yr and a pathway to exit China sourcing virtually fully if wanted. Retail banners Schuh and Journeys, accounting for over 80% of gross sales, are both U.Ok.-domiciled or depend on diversified international manufacturers much less immediately uncovered to tariff headwinds.
“During the last a number of years, we have been working diligently to cut back threat throughout our provide chain with a concerted effort to diversify our nations of manufacturing. These efforts have meaningfully paid off with dramatically decrease dependence on and a path to be virtually fully out of China in brief order as wanted. During the last 2 months, our groups have swiftly and constantly evaluated our product strains and sourcing plans and brought aggressive motion to reduce the reciprocal tariff affect. On the present charges, we estimate the reciprocal tariffs in our branded enterprise would lead to unmitigated price will increase of roughly $15 million this fiscal yr. We’re taking the next actions, amongst others, to mitigate this price strain, accelerating, growing or canceling stock to reap the benefits of tariff home windows, additional diversifying suppliers and resourcing to nations with decrease tariffs, working with long-standing manufacturing facility companions to cut back prices and planning for strategic value will increase focused extra towards the again half of the yr, coupled with demand era investments.”
— Mimi Eckel Vaughn, Board Chair, President and Chief Govt Officer
Ongoing diversification of sourcing, focused value will increase, and shut vendor collaboration counsel Genesco retains the flexibility to defend margins and restrict tariff-driven earnings volatility, lowering long-term operational threat relative to much less nimble trade friends.
Journeys 4.0 remodels increase retailer productiveness and model enchantment
The rollout of the brand new “Journeys 4.0” retailer format, with 39 remodels accomplished and plans to succeed in 75-plus areas by year-end, has produced larger than 25% gross sales lifts per reworked unit, with notable features in new buyer acquisition, site visitors, and conversion charges. Focusing remodels on the chain’s highest-potential websites leverages fastened investments whereas driving disproportionate total enterprise affect.
“Our new retailer idea has delivered sturdy outcomes and a gross sales carry of greater than 25%. Our focus is on making the most efficient shops much more productive. These shops have meaningfully higher site visitors, increased conversion and better common promoting costs and have been attracting a bigger share of latest prospects. We now have 39 shops within the 4.0 format. The outcomes have been so compelling, we have pulled ahead extra shops to rework this yr. By year-end, we count on to have 75-plus shops on this new format, underscoring our perception on this initiative as a cornerstone of Journeys transformation.”
— Mimi Eckel Vaughn, Board Chair, President and Chief Govt Officer
Reworking high-potential shops with the 4.0 format is driving outsized gross sales development and buyer engagement, supporting the corporate’s broader transformation technique and long-term earnings potential.
Wanting Forward
Administration reiterated EPS steerage (non-GAAP) of $1.30 to $1.70 for fiscal 2026, forecasting comparable gross sales up 2% to three% YoY and complete gross sales development of 1% to 2% YoY, with improved international change tailwinds partly offsetting web retailer closures. Gross margin is predicted to say no 20% to 30% foundation factors. The second quarter is anticipated to stay a seasonally low interval with elevated SG&A deleverage, however back-to-school and vacation buying and selling are anticipated to drive stronger profitability and money move within the second half.
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