Genesco (GCO) Q2 2025 earnings summary

Executive summary

• Q2 FY25 net sales reached $525 million, flat to slightly up year-over-year, exceeding expectations due to Journeys' strong performance and early back-to-school demand, while Schuh and Johnston & Murphy faced headwinds from tough comparisons and market softness.

• Digital business grew 8%, now representing 22% of retail sales, and cost optimization plus store footprint reduction supported improved bottom-line results.

• Inventory was well managed, down 8% year-over-year, and the store base was reduced by 61 stores year-over-year, with 12 closures in Q2.

• Net loss narrowed to $10 million ($0.91 per share GAAP, $0.83 non-GAAP), reflecting improved operating margin and absence of prior year goodwill impairment.

• Journeys saw positive comps in July and August, driven by refreshed product assortment and enhanced consumer experiences, while Schuh and Johnston & Murphy were pressured by market conditions but benefited from new products and digital strength.

Financial highlights

• Consolidated revenue for Q2 was $525 million, with gross margin at 46.8% (down from 47.7% last year) and adjusted operating loss of $9.3 million, an improvement from $10 million loss last year.

• Selling and administrative expenses were 48.6% of sales, down from 49.6% last year, aided by cost initiatives and store closures.

• Adjusted diluted loss per share was $0.83 versus $0.85 last year; net cash used in operating activities improved to $6 million for the first six months.

• Inventory turnover improved with an 8% year-over-year inventory reduction.

• Repurchased 382,000 shares for $9.3 million; $42.8 million remains on authorization.

Outlook and guidance

• FY25 non-GAAP EPS guidance is $0.60–$1.00, with sales expected to decrease 1%–2%, or flat to down 1% excluding the 53rd week.

• Adjusted gross margin rates for the year expected to be down 10–20 basis points; SG&A expenses flat to 20 basis points leverage.

• Q3 comps expected up low single digits, with sales down slightly due to calendar shift.

• FY25 CapEx projected at $52–$57 million, focused on omni-channel, IT, and store investments.