Executive Summary
Genesco delivered a mixed QQ2 2025 performance characterized by a resilient Journeys turnaround that drove positive comps and double-digit online growth, offset by continued pressure at Schuh and Johnston & Murphy. Consolidated revenue was $525.2 million with an adjusted operating loss of $9.3 million and an adjusted diluted loss per share of $0.83. The quarter showcased meaningful operating leverage from cost-reduction initiatives, a smaller total fleet (approximately 4% fewer Journeys stores), and aggressive rent-optimization efforts, while also underscoring ongoing margin headwinds from product mix and promotional activity across multiple brands. Management reaffirmed full-year guidance despite a cautious view on Schuh and J&M, signaling confidence in Journeysâ longer-term earnings potential and the ability to extract operating leverage as the store fleet modernizes and the product assortment evolves.
Key takeaways include: (1) Journeys achieved positive comps in July and accelerated into August, supported by a refreshed assortment and stronger brand storytelling; (2) Journeys digital achieved double-digit growth, while overall gross margin declined modestly year-over-year due to mix and higher e-commerce contribution; (3) management outlined a multi-year plan to refresh Journeysâ stores, sharpen segmentation (notably focusing on teen girls), and reduce occupancy costs, which should translate to improved profitability in the medium term; and (4) Genesco remains disciplined on capital allocationâwith modest capex, ongoing share repurchases earlier in the year, and a focus on $45â$50 million of annualized cost savings by year-end fiscal 2025.
Key Performance Indicators
QoQ: -8.19% | YoY:-126.67%
QoQ: 0.00% | YoY:-136.75%
QoQ: 0.00% | YoY:-136.55%
Key Insights
Revenue: $525.2 million (Q2); Gross profit: $245.6 million; Gross margin: 46.77%; Operating loss: $9.50 million; Net income: -$9.99 million; EPS (GAAP): -$0.91; Adjusted operating loss: -$9.30 million; Adjusted EPS: -$0.83; SG&A as % of sales: 48.6%; Digital sales: ~22% of total retail; Store comps: -4% (Q2); Direct comps: +8%; Overall comps: -2%; Journeys inventory: -9%; Total inventories: -8% (vs last year); Net debt: ~$32 million; Cash & cash equivalents: $45.9 million; Free cash flow...
Financial Highlights
Revenue: $525.2 million (Q2); Gross profit: $245.6 million; Gross margin: 46.77%; Operating loss: $9.50 million; Net income: -$9.99 million; EPS (GAAP): -$0.91; Adjusted operating loss: -$9.30 million; Adjusted EPS: -$0.83; SG&A as % of sales: 48.6%; Digital sales: ~22% of total retail; Store comps: -4% (Q2); Direct comps: +8%; Overall comps: -2%; Journeys inventory: -9%; Total inventories: -8% (vs last year); Net debt: ~$32 million; Cash & cash equivalents: $45.9 million; Free cash flow: $19.8 million; Capex: $7.9 million; Journeys stores opened/closed: +5 opened, -12 Journeys stores; Total Journeys stores: 1,314; 1H23â1H25 rent reductions: 9% on renewals; Back-half receipts and holiday demand viewed positively by management.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
525.19M |
-28.93% |
0.00% |
| Gross Profit |
245.64M |
-28.19% |
0.00% |
| Operating Income |
-9.50M |
-126.67% |
-8.19% |
| Net Income |
-9.99M |
-136.75% |
0.00% |
| EPS |
-0.91 |
-136.55% |
0.00% |
Management Commentary
- Strategy and execution: Journeysâ assortment upgrade, leadership changes (Chief Merchant, SVP Strategy & Transformation, CMO), and renewed focus on teen female customer to broaden brand appeal. Mimi Vaughn stated Journeysâ positive comps were driven by new product and an enhanced consumer experience, with comps turning positive in July and accelerating into August. "Our Journeys assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July, before the onset of Back-to-School, and accelerating into August."- Operational efficiency and cost management: Genesco emphasized store optimization, lower occupancy costs, and favorable rent adjacencies. Tom George highlighted a 9% reduction in straight-line rent expense across 45 lease renewals in Q2 and the year-to-date renewals at 164 with continued opportunistic rent reductions as leases come up for renewal. - Digital and omni-channel strength: The company noted double-digit growth in Journeysâ digital business, supported by performance marketing, loyalty programs, CRM campaigns, and omni-channel delivery. - Market dynamics and consumer behavior: The management team acknowledged a choppy macro environment with a selective consumer. Mimi noted that shoppers remain selective, favoring key footwear items and must-have products, but that Journeys is positioned to capitalize on holiday demand given improved assortment and brand partnerships. - Near-term guidance and longer-term confidence: Management reaffirmed the full-year guidance while adopting a cautious stance for Schuh and J&M, signaling resilience in Journeys and the potential for earnings leverage through cost discipline and a refreshed store fleet.
Journeysâ assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July, before the onset of Back-to-School, and accelerating into August.
â Mimi Vaughn
Total company comps were down 2%, which was a healthy sequential acceleration.
â Tom George
Forward Guidance
Management reaffirmed fiscal 2025 guidance with expected total sales to decline 1% to 2% (or flat to down 1% excluding the 53rd week last year). Key near-term assumptions include: (i) Q3 comps up low single digits versus last year (consolidated; Journeys also expected to be in the low-single digits), (ii) gross margin down approximately 60â80 basis points in Q3 due to Journeys/Schuh product mix pressures and promotional activity at Schuh, (iii) SG&A deleverage of roughly 10â40 basis points in Q3, (iv) Q4 to deliver higher operating leverage given higher sales volume, and (v) no additional share repurchases assumed for fiscal 2025. Medium-term catalysts include Journeysâ strategic store refresh rollout beginning in October with a multi-store pilot before broader deployment, enhanced brand marketing, strengthened customer segmentation (notably targeting teen girls), and continued cost discipline (targeted $45â$50 million annualized savings by year-end fiscal 2025). Investors should monitor: Journeysâ comp trajectory into the holiday season, gross margin stability amid promotional pressure at Schuh, the pace of store closures and rent leverage, and the evolution of Journeysâ digital and omni-channel contribution to profitability.