GCO Genesco Inc

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): March 8, 2024

GENESCO INC.

(Exact name of registrant as specified in its charter)

 

Tennessee	1-3083		62-0211340
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(I.R.S. Employer Identification No.)
535 Marriott Drive	Nashville	Tennessee	37214
(Address of Principal Executive Offices)			(Zip Code)

 

(615) 367-7000

Registrant's telephone number, including area code

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $1.00 par value	GCO	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

 

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On March 8, 2024, Genesco Inc. issued a press release announcing results of operations for the fourth fiscal quarter and year ended February 3, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On March 8, 2024, the Company also posted on its website, www.genesco.com, a slide presentation with summary results. A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the press release furnished herewith contains non-GAAP financial measures, including adjusted selling and administrative expense, operating income, pretax earnings, earnings from continuing operations and earnings per share from continuing operations, as discussed in the text of the release and as detailed on the reconciliation schedule attached to the press release. For consistency and ease of comparison with the adjusted results for the prior period announced last year, the Company believes that disclosure of the non-GAAP measures will be useful to investors.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

The following exhibits are furnished herewith:

 

Exhibit Number		Description
99.1		Press Release issued by Genesco Inc. on March 8, 2024
99.2		Genesco Inc. Fourth Fiscal Quarter ended February 3, 2024 Summary Results
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		GENESCO INC.
Date: March 8, 2024		By:		/s/ Thomas A. George
		Name:		Thomas A. George
		Title:		Senior Vice President and Chief Financial Officer

 

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Exhibit 99.1

 

 

GENESCO INC. REPORTS FISCAL 2024 FOURTH QUARTER

AND FULL YEAR RESULTS

Johnston & Murphy and Schuh Achieved Record Sales in FY24

Journeys Delivered Another Quarter of Sequential Comp Improvement

Fourth Quarter E-Commerce Sales Increased 5%

NASHVILLE, Tenn., March 8, 2024 --- Genesco Inc. (NYSE: GCO) today reported fourth quarter and full fiscal year results for the three and twelve months ended February 3, 2024.

 

Fourth Quarter Fiscal 2024 Financial Summary

Fiscal 2024 Financial Summary

Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “Our Fiscal 2024 results reflect the significant shift we’ve seen in our Journeys consumer’s shopping behavior. The year began with a very challenging start, and we reacted quickly to implement strategies that drove sequential improvement in Journeys comp every quarter of the year. Although the Holiday season started off positively, consumers subsequently shopped almost exclusively for key footwear items with a notable shift away from boots, putting more pressure on our core product assortment than we anticipated at the beginning of Q4. At the same time, we delivered another year of record sales for Schuh and Johnston & Murphy.”

 

 

 

_________________________

1Excludes a charge for severance and asset impairments, partially offset by an insurance gain, net of tax effect in the fourth quarter and year of Fiscal 2024 (“Excluded Items”). A reconciliation of earnings (loss) and earnings (loss) per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) with the adjusted earnings (loss) and earnings (loss) per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

 

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Vaughn continued, “As we move into Fiscal 2025, we have more work to do to meet the needs of our changing consumer. We have an outstanding team in place at Journeys with both an experienced new leader and new chief merchant, a unique proposition as the destination for teen fashion footwear and the tremendous support of our brand partners to accomplish this. Given our strong track record of turning businesses around in challenging times, an even greater call to action to accelerate the pace of Journeys improvement and initiatives already underway, we are well positioned to unlock Journeys’ considerable earnings potential and value.”

 

Thomas A. George, Genesco’s Chief Financial Officer, commented, "Although we faced a difficult operating environment in the fourth quarter, we delivered sales largely in line with our most recent guidance and better-than-expected gross margin. However, the earnings impact from unusually disruptive winter storms, along with higher than anticipated expenses at Journeys drove bottom line results below our most recent expectations. Looking ahead, while we are taking urgent actions to improve our core product assortment, we expect the current sales dynamic to remain a significant headwind in the first half of Fiscal 2025 and have factored that into our outlook.”

Fourth Quarter Review

 

Net sales for the fourth quarter (14 weeks) increased 2% to $739 million in Fiscal 2024 compared to $725 million in the fourth quarter (13 weeks) of Fiscal 2023. Excluding the 14th week, sales would have decreased 2% for the fourth quarter of Fiscal 2024. The sales decrease compared to last year was driven by decreased store sales, primarily in Journeys Group, partially offset by a 5% increase in e-commerce comparable sales, increased wholesale sales and a favorable foreign exchange impact.

 

Comparable Sales
Comparable Same Store and Direct Sales:	4QFY24	4QFY23
Journeys Group	(5)%	(1)%
Schuh Group	(5)%	20%
Johnston & Murphy Group	8%	23%
Total Genesco Comparable Sales	(4)%	5%
Same Store Sales	(7)%	1%
Comparable Direct Sales	5%	21%

 

 

 

 

 

 

 

 

 

 

 

 

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The overall sales increase of 2% for the fourth quarter of Fiscal 2024 compared to the fourth quarter of Fiscal 2023 was driven by an increase of 6% at Schuh, 9% at Johnston & Murphy and a 24% increase at Genesco Brands, partially offset by a decrease of 2% at Journeys. On a constant currency basis, Schuh sales were up 2% for the fourth quarter.

 

Fourth quarter gross margin this year was 46.3%, down 10 basis points compared with 46.4% last year. The decrease as a percentage of sales compared to Fiscal 2023 is due primarily to a change in product mix at Journeys, partially offset by lower freight and logistics costs at both Johnston & Murphy and Genesco Brands.

 

Selling and administrative expense for the fourth quarter this year increased 170 basis

points as a percentage of sales compared with last year. Adjusted selling and administrative expense for the fourth quarter this year also increased 170 basis points as a percentage of sales compared with last year. Approximately 60 basis points of the increase were attributable to the 53rd week. Adjusting for the 53rdweek, expenses were relatively flat in absolute dollars when compared to last year, despite additional variable expenses associated with our direct sales growth, demonstrating the impact and benefit of our cost savings initiatives.

 

Genesco’s GAAP operating income for the fourth quarter was $37.3 million, or 5.0% of sales this year, compared with $49.8 million, or 6.9% of sales in the fourth quarter last year. Adjusted for the Excluded Items in both periods, operating income for the fourth quarter was $38.5 million this year compared to $51.0 million last year. Adjusted operating margin was 5.2% of sales in the fourth quarter of Fiscal 2024 and 7.0% in the fourth quarter last year. For the 53rd week, operating income was an estimated loss of $2.6 million, or approximately $0.18 per share.

 

The effective tax rate for the quarter was 43.0% in Fiscal 2024 compared to 19.1% in the fourth quarter last year. The adjusted tax rate, reflecting Excluded Items, was 22.6% in Fiscal 2024 compared to 25.2% in the fourth quarter last year. The lower adjusted tax rate for the fourth quarter this year compared to the fourth quarter last year primarily reflects a reduction in the effective tax rate for jurisdictions in which the Company is profitable.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GAAP earnings from continuing operations were $20.3 million in the fourth quarter of Fiscal 2024 compared to $39.2 million in the fourth quarter last year. Adjusted for the Excluded Items in both periods, fourth quarter earnings from continuing operations were $28.5 million, or $2.59 per share, in Fiscal 2024, compared to $37.1 million, or $3.06 per share, in the fourth quarter last year.

Full Year Review

 

Net sales for Fiscal 2024 (53 weeks) decreased 2.5% to $2.32 billion from $2.38 billion in Fiscal 2023 (52 weeks). Excluding the 53rdweek, sales would have decreased 4% for Fiscal 2024. The sales decrease compared to last year was driven by decreased store sales, primarily in Journeys Group, and decreased wholesale sales, partially offset by an 8% increase in e-commerce comparable sales and a favorable foreign exchange impact. Total comparable sales for Fiscal 2024 decreased 4% including a same store sales decrease of 7% and a comparable direct sales increase of 8%.

 

Overall sales for Fiscal 2024 compared to Fiscal 2023 decreased 8% at Journeys and 9% at Genesco Brands, partially offset by an increase of 11% at Schuh and 8% at Johnston & Murphy. On a constant currency basis, Schuh sales were up 8% for Fiscal 2024.

 

Gross margin for Fiscal 2024 was 47.3%, down 30 basis points compared with 47.6% last year. The decrease as a percentage of sales compared to Fiscal 2023 is due primarily to increased promotional activity and product mix shift in the Journeys business, partially offset by improved margin at Schuh along with improved margins at Johnston & Murphy and Genesco Brands reflecting decreased freight and logistics costs in Fiscal 2024.

Selling and administrative expense for Fiscal 2024 increased 280 basis points as a percentage of sales compared with last year. Adjusted selling and administrative expense as a percentage of sales for Fiscal 2024 was 46.5%, up 290 basis points, compared to 43.6% last year. The increase as a percentage of sales reflects deleverage in expenses, especially compensation expense, selling salaries, occupancy and marketing expenses, largely as a result of lower store comps in Fiscal 2024.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Genesco’s GAAP operating loss for Fiscal 2024 was $13.5 million, or 0.6% of sales, compared to operating income of $93.2 million, or 3.9% of sales last year. Adjusted for the Excluded Items in both periods and goodwill impairment in Fiscal 2024, operating income was $16.8 million this year compared to $96.8 million last year. Adjusted operating margin was 0.7% of sales in Fiscal 2024 and 4.1% of sales last year.

 

The effective tax rate was -8.5% in Fiscal 2024 compared to 19.8% last year. The adjusted tax rate, reflecting Excluded Items and goodwill impairment, was 24.6% in Fiscal 2024 compared to 24.0% last year.

 

GAAP loss from continuing operations was $23.6 million in Fiscal 2024, compared to earnings from continuing operations of $72.2 million last year. Adjusted for the Excluded Items in both periods and goodwill impairment in Fiscal 2024, earnings from continuing operations were $6.4 million, or $0.56 per share, in Fiscal 2024, compared to $71.1 million, or $5.59 per share, last year.

Cash, Borrowings and Inventory

 

Cash as of February 3, 2024 was $35.2 million, compared with $48.0 million as of January 28, 2023. Total debt at the end of the fourth quarter of Fiscal 2024 was $34.7 million compared with $44.9 million at the end of last year’s fourth quarter. Inventories decreased 17% on a year over year basis reflecting decreased inventory for Journeys and Johnston & Murphy, partially offset by an increase at Schuh.

Capital Expenditures and Store Activity

 

For the fourth quarter this year, capital expenditures were $10 million, related primarily to retail stores and digital and omnichannel initiatives. Depreciation and amortization was $14 million. During the quarter, the Company opened five stores and closed 24 stores. The Company ended the quarter with 1,341 stores compared with 1,410 stores at the end of the fourth quarter last year, or a decrease of 5%. Square footage was down 3% on a year-over-year basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Share Repurchases

 

The Company did not repurchase any shares during the fourth quarter of Fiscal 2024. The Company repurchased 1,261,295 shares, 10% of its outstanding shares, for $32.0 million, or $25.39 per share during Fiscal 2024. The Company currently has $52.1 million remaining on its expanded share repurchase authorization announced in June 2023.

Store Closing and Cost Savings Update

Fiscal 2025 Outlook

 

For Fiscal 2025, the Company:

Conference Call, Management Commentary and Investor Presentation

 

The Company has posted detailed financial commentary and a supplemental financial presentation of fourth quarter results on its website, www.genesco.com, in the investor relations section. The Company's live conference call on March 8, 2024, at 7:30 a.m. (Central time), may be accessed through the Company's website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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2A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to GAAP is included in Schedule B to this press release.

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Safe Harbor Statement

 

This release contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events, including shipping disruptions in the Red Sea; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address consumer demand;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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About Genesco Inc.

 

Genesco Inc. (NYSE: GCO) is a footwear focused company with distinctively positioned retail and lifestyle brands and proven omnichannel capabilities offering customers the footwear they desire in engaging shopping environments, including approximately 1,340 retail stores and branded e-commerce websites. Its Journeys, Little Burgundy and Schuh brands serve teens, kids and young adults with on-trend fashion footwear that inspires youth culture in the U.S., Canada and the U.K. Johnston & Murphy serves the successful, affluent man and woman with premium footwear, apparel and accessories in the U.S. and Canada, and Genesco Brands Group sells branded lifestyle footwear to leading retailers under licensed brands including Levi’s, Dockers and G.H. Bass. Founded in 1924, Genesco is based in Nashville, Tennessee. For more information on Genesco and its operating divisions, please visit www.genesco.com.

 

Genesco Financial Contact Genesco Media Contact

Thomas A. George Claire S. McCall

(615) 367-7465 (615) 367-8283

tgeorge@genesco.com cmccall@genesco.com

 

 

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GENESCO INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

 

 

 

		Quarter 4(1)								Quarter 4(1)
		February 3, 2024				% of Net Sales				January 28, 2023				% of Net Sales
Net sales		$	738,950				100.0	%		$	725,020				100.0	%
Cost of sales			396,883				53.7	%			388,395				53.6	%
Gross margin			342,067				46.3	%			336,625				46.4	%
Selling and administrative expenses			303,549				41.1	%			285,776				39.4	%
Asset impairments and other, net			1,206				0.2	%			1,009				0.1	%
Operating income			37,312				5.0	%			49,840				6.9	%
Other components of net periodic benefit cost			149				0.0	%			50				0.0	%
Interest expense, net			1,536				0.2	%			1,312				0.2	%
Earnings from continuing operations before income taxes			35,627				4.8	%			48,478				6.7	%
Income tax expense			15,337				2.1	%			9,280				1.3	%
Earnings from continuing operations			20,290				2.7	%			39,198				5.4	%
Gain (loss) from discontinued operations, net of tax(2)			6,899				0.9	%			(249	)			0.0	%
Net Earnings		$	27,189				3.7	%		$	38,949				5.4	%
Basic earnings per share:
Before discontinued operations		$	1.86							$	3.29
Net earnings		$	2.49							$	3.27
Diluted earnings per share:
Before discontinued operations		$	1.84							$	3.23
Net earnings		$	2.47							$	3.21
Weighted-average shares outstanding:
Basic			10,911								11,914
Diluted			11,025								12,124

 

 

 

 

 

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GENESCO INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

		Fiscal Year Ended(1)								Fiscal Year Ended(1)
		February 3, 2024				% of Net Sales				January 28, 2023				% of Net Sales
Net sales		$	2,324,624				100.0	%		$	2,384,888				100.0	%
Cost of sales			1,225,804				52.7	%			1,248,698				52.4	%
Gross margin			1,098,820				47.3	%			1,136,190				47.6	%
Selling and administrative expenses			1,082,040				46.5	%			1,042,094				43.7	%
Goodwill impairment			28,453				1.2	%			—				0.0	%
Asset impairments and other, net			1,787				0.1	%			855				0.0	%
Operating income (loss)			(13,460	)			-0.6	%			93,241				3.9	%
Other components of net periodic benefit cost			537				0.0	%			248				0.0	%
Interest expense, net			7,777				0.3	%			2,920				0.1	%
Earnings (loss) from continuing operations before income taxes			(21,774	)			-0.9	%			90,073				3.8	%
Income tax expense			1,854				0.1	%			17,831				0.7	%
Earnings (loss) from continuing operations			(23,628	)			-1.0	%			72,242				3.0	%
Gain (loss) from discontinued operations, net of tax			6,801				0.3	%			(327	)			0.0	%
Net Earnings (loss)		$	(16,827	)			-0.7	%		$	71,915				3.0	%
Basic earnings (loss) per share:
Before discontinued operations		$	(2.10	)						$	5.80
Net earnings (loss)		$	(1.50	)						$	5.77
Diluted earnings (loss) per share:
Before discontinued operations		$	(2.10	)						$	5.69
Net earnings (loss)		$	(1.50	)						$	5.66
Weighted-average shares outstanding:
Basic			11,243								12,457
Diluted			11,243								12,707

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

 

		Quarter 4(1)								Quarter 4(1)
		February 3, 2024				% of Net Sales				January 28, 2023				% of Net Sales
Sales:
Journeys Group		$	455,003				61.6	%		$	465,807				64.2	%
Schuh Group			146,131				19.8	%			137,516				19.0	%
Johnston & Murphy Group			97,623				13.2	%			89,311				12.3	%
Genesco Brands Group			40,193				5.4	%			32,386				4.5	%
Net Sales		$	738,950				100.0	%		$	725,020				100.0	%
Operating Income (Loss):
Journeys Group		$	32,337				7.1	%		$	43,169				9.3	%
Schuh Group			9,325				6.4	%			12,341				9.0	%
Johnston & Murphy Group			6,136				6.3	%			7,108				8.0	%
Genesco Brands Group			(267	)			-0.7	%			(3,229	)			-10.0	%
Corporate and Other(2)			(10,219	)			-1.4	%			(9,549	)			-1.3	%
Operating income			37,312				5.0	%			49,840				6.9	%
Other components of net periodic benefit cost			149				0.0	%			50				0.0	%
Interest, net			1,536				0.2	%			1,312				0.2	%
Earnings from continuing operations before income taxes			35,627				4.8	%			48,478				6.7	%
Income tax expense			15,337				2.1	%			9,280				1.3	%
Earnings from continuing operations			20,290				2.7	%			39,198				5.4	%
Gain (loss) from discontinued operations, net of tax			6,899				0.9	%			(249	)			0.0	%
Net Earnings		$	27,189				3.7	%		$	38,949				5.4	%

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

 

		Fiscal Year Ended(1)								Fiscal Year Ended(1)
		February 3, 2024				% of Net Sales				January 28, 2023				% of Net Sales
Sales:
Journeys Group		$	1,363,835				58.7	%		$	1,482,203				62.1	%
Schuh Group			480,164				20.7	%			432,002				18.1	%
Johnston & Murphy Group			339,446				14.6	%			314,759				13.2	%
Genesco Brands Group			141,179				6.1	%			155,924				6.5	%
Net Sales		$	2,324,624				100.0	%		$	2,384,888				100.0	%
Operating Income (Loss):
Journeys Group		$	11,072				0.8	%		$	94,404				6.4	%
Schuh Group			21,435				4.5	%			17,601				4.1	%
Johnston & Murphy Group			16,314				4.8	%			14,364				4.6	%
Genesco Brands Group			(8	)			0.0	%			(678	)			-0.4	%
Corporate and Other(2)			(33,820	)			-1.5	%			(32,450	)			-1.4	%
Goodwill Impairment			(28,453	)			-1.2	%			—				0.0	%
Operating income (loss)			(13,460	)			-0.6	%			93,241				3.9	%
Other components of net periodic benefit cost			537				0.0	%			248				0.0	%
Interest, net			7,777				0.3	%			2,920				0.1	%
Earnings (loss) from continuing operations before income taxes			(21,774	)			-0.9	%			90,073				3.8	%
Income tax expense			1,854				0.1	%			17,831				0.7	%
Earnings (loss) from continuing operations			(23,628	)			-1.0	%			72,242				3.0	%
Gain (loss) from discontinued operations, net of tax			6,801				0.3	%			(327	)			0.0	%
Net Earnings (Loss)		$	(16,827	)			-0.7	%		$	71,915				3.0	%

 

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GENESCO INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

		February 3, 2024				January 28, 2023
Assets
Cash		$	35,155			$	47,990
Accounts receivable			53,618				40,818
Inventories			378,967				458,017
Other current assets			39,611				25,844
Total current assets			507,351				572,669
Property and equipment			240,266				233,733
Operating lease right of use assets			436,896				470,991
Goodwill and other intangibles			36,815				65,553
Non-current prepaid income taxes			56,839				54,111
Other non-current assets			51,723				59,369
Total Assets		$	1,329,890			$	1,456,426
Liabilities and Equity
Accounts payable		$	114,621			$	144,998
Current portion operating lease liabilities			129,189				134,458
Other current liabilities			75,727				81,327
Total current liabilities			319,537				360,783
Long-term debt			34,682				44,858
Long-term operating lease liabilities			359,073				401,113
Other long-term liabilities			45,396				42,706
Equity			571,202				606,966
Total Liabilities and Equity		$	1,329,890			$	1,456,426

 

 

 

 

 

 

 

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GENESCO INC.

Store Count Activity

 

	Balance 01/29/22			Open			Close			Balance 01/28/23			Open			Close			Balance 02/03/24
Journeys Group		1,135			22			27			1,130			27			94			1,063
Schuh Group		123			4			5			122			3			3			122
Johnston & Murphy Group		167			2			11			158			2			4			156
Total Retail Stores		1,425			28			43			1,410			32			101			1,341

 

 

GENESCO INC.

Store Count Activity

 

	Balance 10/28/23			Open			Close			Balance 02/03/24
Journeys Group		1,080			3			20			1,063
Schuh Group		124			1			3			122
Johnston & Murphy Group		156			1			1			156
Total Retail Stores		1,360			5			24			1,341

 

 

GENESCO INC.

Comparable Sales(1)

 

	Quarter 4						Fiscal Year Ended
	February 3, 2024			January 28, 2023			February 3, 2024			January 28, 2023
Journeys Group		-5	%		-1	%		-9	%	NA
Schuh Group		-5	%		20	%		6	%	NA
Johnston & Murphy Group		8	%		23	%		9	%	NA
Total Comparable Sales		-4	%		5	%		-4	%	NA
Same Store Sales		-7	%		1	%		-7	%	NA
Comparable Direct Sales		5	%		21	%		8	%		0	%

 

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Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Three Months Ended February 3, 2024 and January 28, 2023

The Company believes that disclosure of earnings and earnings per share from continuing operations and operating income adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

	Quarter 4(1)									Quarter 4(1)
	February 3, 2024									January 28, 2023
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Earnings from continuing operations, as reported				$	20,290		$	1.84					$	39,198		$	3.23
Asset impairments and other adjustments:
Asset impairment charges	$	378			272			0.03		$	1,009			729			0.06
Goodwill impairment		—			24			0.00			—			—			0.00
Severance		1,095			820			0.08			—			—			0.00
Insurance gain		(267	)		(200	)		(0.02	)		—			—			0.00
Fees related to shareholder activist		—			—			0.00			—			(5	)		0.00
Expenses related to new HQ building		—			—			0.00			112			100			0.01
Total asset impairments and other adjustments	$	1,206			916			0.09		$	1,121			824			0.07
Income tax expense adjustments:
Other tax items					7,313			0.66						(2,939	)		(0.24	)
Total income tax expense adjustments					7,313			0.66						(2,939	)		(0.24	)
Adjusted earnings from continuing operations (2) and (3)				$	28,519		$	2.59					$	37,083		$	3.06

 

 

 

 

 

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Genesco Inc.

Adjustments to Reported Operating Income and Selling and Administrative Expenses

Three Months Ended February 3, 2024 and January 28, 2023

 

 

	Quarter 4 - February 3, 2024
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	32,337		$	—		$	32,337
Schuh Group		9,325			—			9,325
Johnston & Murphy Group		6,136			—			6,136
Genesco Brands Group		(267	)		—			(267	)
Corporate and Other		(10,219	)		1,206			(9,013	)
Total Operating Income	$	37,312		$	1,206		$	38,518
% of sales		5.0	%					5.2	%

 

 

	Quarter 4 - January 28, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	43,169		$	—		$	43,169
Schuh Group		12,341			—			12,341
Johnston & Murphy Group		7,108			—			7,108
Genesco Brands Group		(3,229	)		—			(3,229	)
Corporate and Other		(9,549	)		1,121			(8,428	)
Total Operating Income	$	49,840		$	1,121		$	50,961
% of sales		6.9	%					7.0	%

 

	Quarter 4
In Thousands	February 3, 2024			January 28, 2023
Selling and administrative expenses, as reported	$	303,549		$	285,776
Expenses related to new HQ building		—			(112	)
Total adjustments		—			(112	)
Adjusted selling and administrative expenses		303,549			285,664
% of sales		41.1	%		39.4	%

 

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Genesco Inc.

Adjustments to Reported Earnings (Loss) from Continuing Operations

Fiscal Year Ended February 3, 2024 and January 28, 2023

The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

	Fiscal Year Ended(1)									Fiscal Year Ended(1)
	February 3, 2024									January 28, 2023
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Earnings (loss) from continuing operations, as reported				$	(23,628	)	$	(2.10	)				$	72,242		$	5.69
Asset impairments and other adjustments:
Asset impairment charges	$	959			718			0.07		$	1,550			1,183			0.09
Goodwill impairment		28,453			21,882			1.93			—			—			0.00
Severance		1,095			820			0.07			—			—			0.00
Insurance gain		(267	)		(200	)		(0.02	)		—			—			0.00
Impact of additional dilutive shares		—			—			0.02			—			—			0.00
Gain on pension termination		—			—			0.00			(695	)		(525	)		(0.04	)
Expenses related to new HQ building		—			—			0.00			2,657			2,005			0.16
Total asset impairments and other adjustments	$	30,240			23,220			2.07		$	3,512			2,663			0.21
Income tax expense adjustments:
Tax impact share based awards					1,059			0.09						(635	)		(0.05	)
Other tax items					5,735			0.50						(3,188	)		(0.26	)
Total income tax expense adjustments					6,794			0.59						(3,823	)		(0.31	)
Adjusted earnings from continuing operations (2) and (3)				$	6,386		$	0.56					$	71,082		$	5.59

 

 

 

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Genesco Inc.

Adjustments to Reported Operating Income (Loss) and Selling and Administrative Expenses

Fiscal Year Ended February 3, 2024 and January 28, 2023

 

	Fiscal Year Ended February 3, 2024
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	11,072		$	—		$	11,072
Schuh Group		21,435			—			21,435
Johnston & Murphy Group		16,314			—			16,314
Genesco Brands Group		(8	)		—			(8	)
Goodwill Impairment		(28,453	)		28,453			—
Corporate and Other		(33,820	)		1,787			(32,033	)
Total Operating Income (Loss)	$	(13,460	)	$	30,240		$	16,780
% of sales		-0.6	%					0.7	%

 

	Fiscal Year Ended January 28, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	94,404		$	—		$	94,404
Schuh Group		17,601			—			17,601
Johnston & Murphy Group		14,364			—			14,364
Genesco Brands Group		(678	)		—			(678	)
Corporate and Other		(32,450	)		3,512			(28,938	)
Total Operating Income	$	93,241		$	3,512		$	96,753
% of sales		3.9	%					4.1	%

 

	Fiscal Year Ended
In Thousands	February 3, 2024			January 28, 2023
Selling and administrative expenses, as reported	$	1,082,040		$	1,042,094
Expenses related to new HQ building		—			(2,657	)
Total adjustments		—			(2,657	)
Adjusted selling and administrative expenses		1,082,040			1,039,437
% of sales		46.5	%		43.6	%

 

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Genesco Inc.

Adjustments to Forecasted Earnings from Continuing Operations

Fiscal Year Ending February 1, 2025

 

 

 

In millions (except per share amounts)	High Guidance Fiscal 2025						Low Guidance Fiscal 2025
	Net of Tax			Per Share			Net of Tax			Per Share
Forecasted earnings from continuing operations	$	10.4		$	0.92		$	5.4		$	0.48
Asset impairments and other adjustments:
Asset impairments and other matters		0.9			0.08			1.3			0.12
Total asset impairments and other adjustments (1)		0.9			0.08			1.3			0.12
Adjusted forecasted earnings from continuing operations (2)	$	11.3		$	1.00		$	6.7		$	0.60

 

 

 

 

This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.

 

 

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FOURTH QUARTER FY24 GENESCO Summary Results March 8, 2024 Exhibit 00.0 Exhibit 99.2

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This presentation contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events, including shipping disruptions in the Red Sea; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address consumer demand; the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements. Safe Harbor Statement

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Non-GAAP Financial Measures We report consolidated financial results in accordance with generally accepted accounting principles (“GAAP”). However, to supplement these consolidated financial results our presentation includes certain non-GAAP financial measures such as earnings (loss) and earnings (loss) per share and operating income (loss). This supplemental information should not be considered in isolation as a substitute for related GAAP measures. We believe that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results. Reconciliations of the non-GAAP supplemental information to the comparable GAAP measures can be found in the Appendix.

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Our Footwear Focused Vision & Strategy Our Aspiration Create and curate leading footwear brands that represent style, innovation and self-expression; be the destination for our consumers’ favorite fashion footwear How We Will Achieve It Build enduring relationships with our target customers, grounded in unparalleled consumer and market insights Deliver exciting, distinctive experiences and products across digital and physical touchpoints

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Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars Genesco’s strategy spans six strategic growth pillars People, Values, Organization, Culture and ESG Stewardship Accelerate digital to grow direct-to-consumer Pursue synergistic acquisitions to add to growth Maximize the relationship between physical and digital Intensify product innovation and trend insight efforts Reshape the cost base to reinvest for future growth Deepen consumer insights to strengthen customer relationships and brand equity 1 5 6 2 3 4 Attract, Develop and Retain Consumer-Obsessed Talent Genesco’s six strategic growth pillars are designed to accelerate our evolution, while leveraging digital and systems synergies to drive sustainable growth and enhanced profitability

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Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars Strong Strategic Positioning Retail Platform Branded Platform The destination for young adult and teen fashion footwear and partner of choice for leading global brands Portfolio of leading owned and licensed brands #1 omnichannel retailer of teen fashion footwear #1 omnichannel retailer of youth fashion footwear Deep brand heritage and reputation for quality product Deep brand heritage across portfolio

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Q4 & FY24 Highlights Q4 Journeys delivered another sequential improvement in comp sales. We delivered better than anticipated gross margin. J&M posted record top line results. We grew our comparable digital business in Q4 by 5% and expanded digital penetration to 27% versus 25% a year ago. BOPIS was a bright spot for Journeys in its first holiday in operation, accounting for almost 30% of e-commerce sales in the week leading up to Christmas. Total company inventory was down 17%, and Journeys inventory was down over 20%, enabling us to generate strong free cash flow and enter the new fiscal year in a very clean position. We ended the quarter with 69 fewer stores versus a year ago as we continued to optimize our store footprint and drive productivity in our remaining store fleet. FY24 Both J&M and Schuh posted record top line results. Journeys delivered sequential improvement in comp sales in every quarter. Against a difficult operating climate, overall sales declined only low single digits and gross margin compressed by just 30 basis points. Expense deleverage impacted the bottom line. We grew our comparable digital business in FY24 by 8% and expanded digital penetration to 23% versus 20% a year ago. We launched Journeys All Access loyalty program and BOPIS at Journeys and J&M to encouraging initial results. We continued to advance our strategies to position the business for better productivity and profitability: We closed nearly 100 underperforming Journeys stores and are evaluating up to 50 more closures in fiscal 25. We made substantial progress in realigning our cost base and we are now targeting an increased run rate of $45-$50 million in annualized savings by the end of fiscal 25.

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Journeys Consumer-Centric Growth Strategy Drive Product Leadership and Create Marketplace Differentiation Diversify and add new key styles with our existing brand partners Increase our leadership position with all our key brands Enhance in-store, social, and digital exposure for brands Work to add new brands Build the Journeys Brand and Enhance the Omni-Experience Intensify efforts to build and promote Journeys as an industry leading retail brand Improve Journeys’ brand presence and upgrade the customer experience in stores and online Personalize and improve the timeliness and relevancy of marketing communications Evolve the All Access loyalty program Leverage the Power of Our People Leverage the expertise of our store employees for excellent service as a differentiator Maximize mobile POS and BOPIS, to improve efficiency and customer engagement Use data to improve training and execution Optimize to Drive Operational and Cost Efficiencies Optimize the store footprint; close unproductive stores Strategically open mall and off-mall stores in data-informed sites Drive efficiencies in selling salaries, rent expense, and inventory management

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$739 MILLION IN SALES +5% GROWTH IN COMPARABLE DIGITAL SALES vs. Q4 FY2023 $1.84 GAAP EPS $2.59 NON-GAAP EPS 27% DIGITAL PENTRATION vs. 25% Q4 FY2023 Q4 FY24 Key Earnings Highlights

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Q4 FY24 Key Earning Highlights

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12mos FY24 Key Earning Highlights

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Q4 FY24 E-Commerce Sales Highlights % of Retail Sales (2) 31% 25% 25% 27% (1) Quarter 4 for the 14-week period ended February 3, 2024 and the 13-week period ended January 28, 2023. Fiscal 2024 for the 53-week period ended February 3, 2024 and Fiscal 2023 for the 52-week period ended January 28, 2023. (2) Retail sales represent combined store sales and e-commerce sales 20% 23% 9% 11%

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Q4 FY24 Comparable Sales

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FY24 (1) Net Sales $739.0 Million Q4 FY24 Sales by Segment FY23 (1) Net Sales $725.0 Million Journeys Schuh Johnston & Murphy Group Genesco Brands Group (1) Quarter 4 for the 14-week period ended February 3, 2024 and the 13-week period ended January 28, 2023.

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12mos FY24 Sales by Segment FY24 Net Sales $2.3 Billion FY23 Net Sales $2.4 Billion Journeys Schuh Johnston & Murphy Group Genesco Brands Group (1) Fiscal 2024 for the 53-week period ended February 3, 2024 and Fiscal 2023 for the 52-week period ended January 28, 2023.

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Q4 FY24 Adjusted Operating Income Statement (1)

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12mos FY24 Adjusted Operating Income Statement (1)

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Q4 FY23 Inventory/Sales Change by Segment Q4 FY24 Inventory/Sales Change by Segment

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Q4 FY24 Retail Stores Summary

---

For Q4 FY24 Retail Square Footage

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FY25 Outlook (1) Note: See earnings call transcript for important details regarding guidance assumptions. (1) On a Non-GAAP basis Additional color on anticipated sales growth by business: Journeys: Mid-single digit percentage decline Schuh: Flat Johnston & Murphy: Low-single digit percentage increase Genesco Brands Group: High-single digit percentage decline

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FY25 Projected Retail Store Count

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FY25 Projected Capital Spending Omni-channel, IT, DC & Other New Stores & Remodels Projected FY25 CapEx approx. $52 - 57 Million FY25 Projected Depreciation & Amortization = $51 Million

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Appendix

---

Q4 FY24 Non-GAAP Reconciliation

---

12mos FY24 Non-GAAP Reconciliation

---

Q4 FY24 Adjusted Selling & Administrative Expenses

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12mos FY24 Adjusted Selling & Administrative Expenses

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FOURTH QUARTER FY24 GENESCO Summary Results March 8, 2024 Exhibit 00.0

v3.24.0.1

Document And Entity Information	Mar. 08, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Mar. 08, 2024
Entity Registrant Name	GENESCO INC.
Entity Central Index Key	0000018498
Entity Emerging Growth Company	false
Securities Act File Number	1-3083
Entity Incorporation, State or Country Code	TN
Entity Tax Identification Number	62-0211340
Entity Address, Address Line One	535 Marriott Drive
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37214
City Area Code	615
Local Phone Number	367-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	GCO
Security Exchange Name	NYSE

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