GENESCO INC Q4 FY2025 earnings call

• Pleased with strong year - end finish with revenue and gross margins exceeding expectations and operating profit at high end of forecast. Performance driven by Journeys' strategic plan gain traction.
• Consumer environment is choppy; consumers are selective. Company continues to innovate assortments.
• Journeys' first half focused on strategic growth plan with new leadership, second half built on product momentum. Schuh's top line flat in challenging market but comp trends recovered. Johnson and Murphy faced headwinds but improved in second half. Genesco Brands Group repositioned for better profit.

Journeys

• Fourth quarter comparable sales increased 10%, with both stores up mid-single digits and digital up high teens. For fiscal 2025, comparable sales returned to positive territory, rising 3%. Revenue contribution significant due to strong performance.

Schuh

• In fiscal 2025, top line remained relatively flat in a challenging UK footwear market. Com trends recovered sequentially, with digital sales accelerating to over 40% of the business. However, promotional activity led to 170 basis points lower gross margin.

Johnson and Murphy

• Faced headwinds last year but sales trends improved in the second half. New product introductions performed well during the holiday season, offsetting lower traffic levels to some extent.

Genesco Brands Group

• Achieved notable success with repositioning, simplifying the licenses portfolio to emphasize key brands and channels, resulting in lower sales in short term but more profit.

• Expect positive comps overall for fiscal 2026 with higher comps in first half as anniversary Journeys' negative comps. Total sales growth offset by store footprint optimization and foreign exchange pressure, expected flat to up 1%.
• Gross margin expected to be down 20 to 30 basis points, with more pressure in first quarter. SG&A expenses as percent of sales to leverage 50 to 70 basis points.
• Fiscal year earnings per share range $1.30 to $1.70. Total capital spend between $50 million and $60 million, led by store remodels for Journeys.

• Macro - economic uncertainty.
• Weather impact on sales (e.g., February weather affecting sales).
• Promotional environment in UK putting pressure on Schuh's gross margin.
• Tariffs affecting cost of goods sold.

Q: Please elaborate on quarter to date and what's seen in February.

A: February has been a roller coaster. Started with snow and cold in some places, but Valentine's Day was strong. When there's a reason to shop, consumers come out in force. We've got great assortments.

Q: Elaborate on Journeys outlook for fiscal 2026, comp growth and store closures impact.

A: Plan to build on comp and earnings momentum. Higher comps in first half as anniversary Journeys' negative comps. Offset with store closures. Overall company comp 2% - 4%, first quarter at higher end of range. Net store closures impact revenue by about $30 million.

Q: Color on Journeys remodels and their impact in the year.

A: Remodels are essential for Journeys' strategy. New consumer positioning and product assortment need aspirational environment. 16 initial remodels saw double - digit improvements in comp, conversion, average transaction size, traffic. Target 70 stores by end of year, representing 7% of fleet. Can accelerate based on results.

Q: Margin outlook for 2026, including first half pressure and incentive comp.

A: Gross margin pressure in first half due to product mix shift at Journeys, Genesco Brands Group license shifts, and inflationary impacts. Incentive comp rebuilding in SG&A, with no additional major impact anticipated going forward. First half has lower sales making it harder to cover from margin perspective.