On September 6, 2024, Genesco Inc (GCO, Financial) released its 8-K filing reporting the financial results for the second quarter of Fiscal 2025, ending August 3, 2024. The company, which sells footwear, headwear, sports apparel, and accessories, operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Licensed Brands.
Second Quarter Financial Highlights
Genesco Inc (GCO, Financial) reported total net sales of $525 million for Q2 Fiscal 2025, surpassing the analyst estimate of $512.30 million. This marks a slight increase from $523 million in the same quarter last year. However, comparable sales decreased by 2%, with e-commerce sales increasing by 8% and store sales decreasing by 4%.
GAAP earnings per share (EPS) were reported at ($0.91), while Non-GAAP EPS stood at ($0.83). The company also noted a significant 8% year-over-year decrease in inventory, reflecting improved inventory management across its segments.
Segment Performance
The Journeys Group, which includes Journeys, Journeys Kidz, and Little Burgundy retail chains, showed a 4% increase in sales, driven by early Back-to-School demand. Schuh Group also saw a 1% increase in sales. However, Johnston & Murphy Group and Genesco Brands Group experienced declines of 9% and 13%, respectively.
| Segment | Q2 FY25 Sales ($ million) | Q2 FY24 Sales ($ million) | % Change |
|---|---|---|---|
| Journeys Group | 298.8 | 287.3 | 4% |
| Schuh Group | 124.6 | 122.8 | 1% |
| Johnston & Murphy Group | 71.0 | 77.8 | -9% |
| Genesco Brands Group | 30.7 | 35.2 | -13% |
Operational Efficiency and Cost Management
Genesco Inc (GCO, Financial) reported a gross margin of 46.8%, down from 47.7% in the previous year, primarily due to a higher mix of sale products at Schuh and changes in product mix at Journeys. Selling and administrative expenses decreased by 100 basis points to 48.6% of sales, reflecting lower occupancy expenses and decreased performance-based compensation.
Operating loss for the quarter was $10.3 million, a significant improvement from the $38.6 million loss reported in the same quarter last year. The adjusted operating loss was $9.3 million, compared to $10.0 million last year.
Cash Flow and Share Repurchases
As of August 3, 2024, Genesco Inc (GCO, Financial) had $45.9 million in cash, up from $37.4 million last year. Total debt decreased to $77.8 million from $131.5 million. The company repurchased $9.3 million worth of stock during the quarter, with $42.8 million remaining on the share repurchase authorization.
Outlook and Strategic Initiatives
Genesco Inc (GCO, Financial) reaffirmed its Fiscal 2025 EPS outlook and expects total sales to decrease by 1% to 2% compared to Fiscal 2024. The company continues to focus on strategic initiatives to enhance the Journeys brand and improve operational efficiency.
Mimi E. Vaughn, Genesco’s Board Chair, President, and CEO, stated, “We delivered another quarter that surpassed our top- and bottom-line expectations, as the improvement in our Journeys business continues to gain traction. Armed with a more elevated and diversified product assortment, Journeys capitalized on the early Back-to-School demand, which drove a positive inflection in comparable sales as the quarter progressed.”
For more detailed financial commentary and a supplemental financial presentation, visit the investor relations section on the company's website, www.genesco.com.
Explore the complete 8-K earnings release (here) from Genesco Inc for further details.
