Genesco (GCO) Q2 2027 earnings summary

Executive summary

• Operating income and EPS exceeded expectations and improved year-over-year, driven by gross margin expansion, disciplined expense management, and strategic actions such as store closures and reduced discounting at schuh.

• All business segments achieved gains against plans, with Journeys and Johnston & Murphy posting positive comps and schuh prioritizing profitability.

• Leadership changes included a new CFO and a new President at schuh to support ongoing transformation.

• E-commerce accounted for 22% of retail sales, with total sales at $530 million, down 3% year-over-year.

Financial highlights

• Revenue decreased 3% year-over-year to $530 million; overall comparable sales declined 1%.

• Adjusted gross margin rose 140 basis points to 47.2%, while GAAP gross margin reached 51.4% (up 560 bps).

• Adjusted operating loss improved by $6 million to a loss of $8 million; GAAP operating income was $3.6 million.

• Adjusted diluted loss per share was $0.83, better than last year's $1.14 loss; GAAP EPS was $0.32.

• Inventory increased 8% year-over-year, supporting growth initiatives and store expansion.

Outlook and guidance

• Fiscal 2027 adjusted diluted EPS expected at the high end of the $2.00–$2.40 range.

• Full-year guidance assumes flat comparable sales (previously up 1%-2%) and total sales down approximately 2%.

• Gross margin expansion now expected at 60–80 basis points for the year.

• Operating income forecasted at the high end of $34 to $40 million.

• CapEx forecasted at $65–$70 million, with 95% allocated to stores.