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): September 6, 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 September 6, 2024, Genesco Inc. issued a press release announcing results of operations for the second fiscal quarter ended August 3, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On September 6, 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 gross margin, operating income (loss), pretax earnings (loss), earnings (loss) from continuing operations and earnings (loss) 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 September 6, 2024
99.2		Genesco Inc. Second Fiscal Quarter ended August 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: September 6, 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 2025 SECOND QUARTER RESULTS

--Financial Performance Exceeds Expectations, Driven by Journeys--

--Reaffirms Fiscal 2025 EPS Outlook--

NASHVILLE, Tenn., Sept. 6, 2024 --- Genesco Inc. (NYSE: GCO) today reported second quarter results for the three months ended August 3, 2024.

Second Quarter Fiscal 2025 Financial Summary

 

Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “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. Thus far in the third quarter, Journeys’ store traffic and sales trends have accelerated further, bolstering our confidence in the product pipeline for the back half and the initiatives underway to enhance the Journeys brand and experience for our consumers.”

 

Vaughn continued, “I am pleased with the momentum building at Journeys and the progress we’re making to meet the evolving needs of our consumers. That said, the operating environment remains choppy, and our outlook reflects this, as well as a more conservative near-term view for our other businesses. Looking ahead, I feel confident that our strategic initiatives and efforts to improve the efficiency of our operating model will enable us to unlock our full earnings potential and create value for our shareholders.”

__________________________

1Excludes a gross margin charge related to a distribution model transition in Genesco Brands Group, net of tax effect, and charges for severance and asset impairments, net of tax effect in the second quarter of Fiscal 2025 (“Excluded Items”). A reconciliation of loss and loss per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) with the adjusted loss and loss per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of loss and 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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Second Quarter Review

 

Net sales for the second quarter of Fiscal 2025 of $525 million were up compared to $523 million in the second quarter of Fiscal 2024. The sales increase includes approximately $20 to $25 million due to the move of a strong week of back-to-school sales from the third quarter last year to the second quarter this year related to the 53-week calendar shift along with an 8% increase in e-commerce comparable sales, partially offset by a decline in store sales, the impact of net store closings and decreased wholesale sales.

 

Comparable Sales
Comparable Same Store and E-commerce Sales:	2QFY25	2QFY24
Journeys Group	(1)%	(11)%
Schuh Group	(2)%	17%
Johnston & Murphy Group	(5)%	12%
Total Genesco Comparable Sales	(2)%	(2)%
Same Store Sales	(4)%	(6)%
Comparable E-commerce Sales	8%	14%

The overall sales increase for the second quarter of Fiscal 2025 compared to the second quarter of Fiscal 2024 was driven by an increase of 4% at Journeys and an increase of 1% at Schuh, partially offset by a decrease of 9% at Johnston & Murphy and a 13% or $4 million decrease at Genesco Brands. On a constant currency basis, Schuh sales were also up 1% for the second quarter this year.

 

Second quarter gross margin this year was 46.8% compared with 47.7% last year. Adjusted gross margin for the second quarter this year decreased 90 basis points as a percentage of sales compared to last year. The decrease as a percentage of sales compared to Fiscal 2024 is due primarily to a higher mix of sale product at Schuh and changes in product mix at Journeys.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Selling and administrative expense for the second quarter this year decreased 100 basis points as a percentage of sales to 48.6% compared to 49.6% last year. The decrease as a percentage of sales compared to Fiscal 2024 reflects a decrease in occupancy expense, a favorable change in certain non-income taxes, decreased royalty expense and decreased performance-based compensation expense, partially offset by increased selling salaries and depreciation expense.

 

Genesco’s GAAP operating loss for the second quarter was $10.3 million, or 2.0% of sales this year, compared with $38.6 million, or 7.4% of sales in the second quarter last year. Adjusted for the Excluded Items in all periods, the operating loss for the second quarter was $9.3 million this year compared to $10.0 million last year. Adjusted operating margin was a loss of 1.8% of sales in the second quarter of Fiscal 2025 compared to a loss of 1.9% in the second quarter last year.

The effective tax rate for the quarter was 15.2% in Fiscal 2025 compared to 23.1% in the second quarter last year. The adjusted tax rate, reflecting Excluded Items, was 15.1% in Fiscal 2025 compared to 23.4% in the second quarter last year. The lower adjusted tax rate for the second quarter this year compared to the second quarter last year reflects a reduction in the tax benefit recorded year to date due to lower projected earnings and taxes from our foreign jurisdictions.

 

GAAP loss from continuing operations was $9.9 million in the second quarter of Fiscal 2025 compared to $31.6 million in the second quarter last year. Adjusted for the Excluded Items in all periods, the second quarter loss from continuing operations was $9.1 million, or $0.83 per share, in Fiscal 2025, compared to $9.6 million, or $0.85 per share, in the second quarter last year.

Cash, Borrowings and Inventory

 

Cash as of August 3, 2024, was $45.9 million, compared with $37.4 million as of July 29, 2023. Total debt at the end of the second quarter of Fiscal 2025 was $77.8 million compared with $131.5 million at the end of last year’s second quarter. Inventories decreased 8% on a year-over-year basis, reflecting decreased inventory for Journeys, Schuh and Johnston & Murphy, partially offset by an increase at Genesco Brands.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Capital Expenditures and Store Activity

 

For the second quarter this year, capital expenditures were $8 million, related primarily to retail stores and digital and omnichannel initiatives. Depreciation and amortization was $13 million. During the quarter, the Company opened five stores and closed 12 stores. The Company ended the quarter with 1,314 stores compared with 1,375 stores at the end of the second quarter last year, or a decrease of 4%. Square footage was down 3% on a year-over-year basis.

Share Repurchases

 

The Company repurchased 381,711 shares during the second quarter of Fiscal 2025 for $9.3 million, or $24.49 per share. The Company currently has $42.8 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:

 

__________________________

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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Conference Call, Management Commentary and Investor Presentation

 

The Company has posted detailed financial commentary and a supplemental financial presentation of second quarter results on its website, www.genesco.com, in the investor relations section. The Company's live conference call on September 6, 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.

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,” “should,” “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

 

 

 

 

 

 

 

 

 

 

 

 

 

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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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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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 1,314 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 inspired by 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 2								Quarter 2
		Aug. 3, 2024				% of Net Sales				July 29, 2023				% of Net Sales
Net sales		$	525,188				100.0	%		$	523,027				100.0	%
Cost of sales			279,549				53.2	%			273,507				52.3	%
Gross margin(1)			245,639				46.8	%			249,520				47.7	%
Selling and administrative expenses			255,135				48.6	%			259,520				49.6	%
Goodwill impairment			—				0.0	%			28,453				5.4	%
Asset impairments and other, net(2)			778				0.1	%			174				0.0	%
Operating loss			(10,274	)			-2.0	%			(38,627	)			-7.4	%
Other components of net periodic benefit cost			86				0.0	%			148				0.0	%
Interest expense, net			1,345				0.3	%			2,383				0.5	%
Loss from continuing operations before income taxes			(11,705	)			-2.2	%			(41,158	)			-7.9	%
Income tax benefit			(1,776	)			-0.3	%			(9,526	)			-1.8	%
Loss from continuing operations			(9,929	)			-1.9	%			(31,632	)			-6.0	%
Loss from discontinued operations, net of tax			(63	)			0.0	%			(33	)			0.0	%
Net Loss		$	(9,992	)			-1.9	%		$	(31,665	)			-6.1	%
Basic loss per share:
Before discontinued operations		$	(0.91	)						$	(2.79	)
Net loss		$	(0.91	)						$	(2.79	)
Diluted loss per share:
Before discontinued operations		$	(0.91	)						$	(2.79	)
Net loss		$	(0.91	)						$	(2.79	)
Weighted-average shares outstanding:
Basic			10,942								11,344
Diluted			10,942								11,344

 

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GENESCO INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

		Six Months Ended								Six Months Ended
		Aug. 3, 2024				% of Net Sales				July 29, 2023				% of Net Sales
Net sales		$	982,785				100.0	%		$	1,006,359				100.0	%
Cost of sales			520,865				53.0	%			528,031				52.5	%
Gross margin			461,920				47.0	%			478,328				47.5	%
Selling and administrative expenses			502,966				51.2	%			511,017				50.8	%
Goodwill impairment			—				0.0	%			28,453				2.8	%
Asset impairments and other, net			1,356				0.1	%			482				0.0	%
Operating loss			(42,402	)			-4.3	%			(61,624	)			-6.1	%
Other components of net periodic benefit cost			195				0.0	%			240				0.0	%
Interest expense, net			2,235				0.2	%			4,034				0.4	%
Loss from continuing operations before income taxes			(44,832	)			-4.6	%			(65,898	)			-6.5	%
Income tax benefit			(10,615	)			-1.1	%			(15,391	)			-1.5	%
Loss from continuing operations			(34,217	)			-3.5	%			(50,507	)			-5.0	%
Loss from discontinued operations, net of tax			(122	)			0.0	%			(48	)			0.0	%
Net Loss		$	(34,339	)			-3.5	%		$	(50,555	)			-5.0	%
Basic loss per share:
Before discontinued operations		$	(3.13	)						$	(4.36	)
Net loss		$	(3.14	)						$	(4.37	)
Diluted loss per share:
Before discontinued operations		$	(3.13	)						$	(4.36	)
Net loss		$	(3.14	)						$	(4.37	)
Weighted-average shares outstanding:
Basic			10,936								11,581
Diluted			10,936								11,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

 

		Quarter 2								Quarter 2
		Aug. 3, 2024				% of Net Sales				July 29, 2023				% of Net Sales
Sales:
Journeys Group		$	298,846				56.9	%		$	287,275				54.9	%
Schuh Group			124,561				23.7	%			122,799				23.5	%
Johnston & Murphy Group			71,037				13.5	%			77,785				14.9	%
Genesco Brands Group			30,744				5.9	%			35,168				6.7	%
Net Sales		$	525,188				100.0	%		$	523,027				100.0	%
Operating income (loss):
Journeys Group		$	(11,151	)			-3.7	%		$	(14,878	)			-5.2	%
Schuh Group			7,339				5.9	%			8,416				6.9	%
Johnston & Murphy Group			(403	)			-0.6	%			2,666				3.4	%
Genesco Brands Group(1)			2,672				8.7	%			1,851				5.3	%
Corporate and Other(2)			(8,731	)			-1.7	%			(8,229	)			-1.6	%
Goodwill Impairment			—				0.0	%			(28,453	)			-5.4	%
Operating loss			(10,274	)			-2.0	%			(38,627	)			-7.4	%
Other components of net periodic benefit cost			86				0.0	%			148				0.0	%
Interest expense, net			1,345				0.3	%			2,383				0.5	%
Loss from continuing operations before income taxes			(11,705	)			-2.2	%			(41,158	)			-7.9	%
Income tax benefit			(1,776	)			-0.3	%			(9,526	)			-1.8	%
Loss from continuing operations			(9,929	)			-1.9	%			(31,632	)			-6.0	%
Loss from discontinued operations, net of tax			(63	)			0.0	%			(33	)			0.0	%
Net Loss		$	(9,992	)			-1.9	%		$	(31,665	)			-6.1	%

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

 

		Six Months Ended								Six Months Ended
		Aug. 3, 2024				% of Net Sales				July 29, 2023				% of Net Sales
Sales:
Journeys Group		$	558,291				56.8	%		$	559,465				55.6	%
Schuh Group			216,910				22.1	%			215,904				21.5	%
Johnston & Murphy Group			150,244				15.3	%			160,412				15.9	%
Genesco Brands Group			57,340				5.8	%			70,578				7.0	%
Net Sales		$	982,785				100.0	%		$	1,006,359				100.0	%
Operating Income (Loss):
Journeys Group		$	(29,973	)			-5.4	%		$	(33,240	)			-5.9	%
Schuh Group			1,443				0.7	%			6,626				3.1	%
Johnston & Murphy Group			1,952				1.3	%			7,472				4.7	%
Genesco Brands Group			1,686				2.9	%			1,819				2.6	%
Corporate and Other(1)			(17,510	)			-1.8	%			(15,848	)			-1.6	%
Goodwill Impairment			—				0.0	%			(28,453	)			-2.8	%
Operating loss			(42,402	)			-4.3	%			(61,624	)			-6.1	%
Other components of net periodic benefit cost			195				0.0	%			240				0.0	%
Interest, net			2,235				0.2	%			4,034				0.4	%
Loss from continuing operations before income taxes			(44,832	)			-4.6	%			(65,898	)			-6.5	%
Income tax benefit			(10,615	)			-1.1	%			(15,391	)			-1.5	%
Loss from continuing operations			(34,217	)			-3.5	%			(50,507	)			-5.0	%
Loss from discontinued operations, net of tax			(122	)			0.0	%			(48	)			0.0	%
Net Loss		$	(34,339	)			-3.5	%		$	(50,555	)			-5.0	%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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GENESCO INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

	Aug. 3, 2024				July 29, 2023
Assets
Cash	$	45,855			$	37,416
Accounts receivable		57,497				50,351
Inventories		450,187				491,118
Other current assets		53,181				45,983
Total current assets		606,720				624,868
Property and equipment		229,116				244,090
Operating lease right of use assets		402,715				476,715
Goodwill and other intangibles		36,446				37,669
Non-current prepaid income taxes		58,051				55,028
Other non-current assets		50,703				56,389
Total Assets	$	1,383,751			$	1,494,759
Liabilities and Equity
Accounts payable	$	187,439			$	166,504
Current portion operating lease liabilities		122,527				137,369
Other current liabilities		85,697				78,707
Total current liabilities		395,663				382,580
Long-term debt		77,839				131,544
Long-term operating lease liabilities		329,773				403,413
Other long-term liabilities		47,854				44,203
Equity		532,622				533,019
Total Liabilities and Equity	$	1,383,751			$	1,494,759

 

 

 

 

 

 

 

 

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GENESCO INC.

Store Count Activity

 

	Balance 01/28/23			Open			Close			Balance 02/03/24			Open			Close			Balance 08/03/24
Journeys Group		1,130			27			94			1,063			5			29			1,039
Schuh Group		122			3			3			122			1			0			123
Johnston & Murphy Group		158			2			4			156			0			4			152
Total Retail Stores		1,410			32			101			1,341			6			33			1,314

 

GENESCO INC.

Store Count Activity

 

 

	Balance 05/04/24			Open			Close			Balance 08/03/24
Journeys Group		1,047			4			12			1,039
Schuh Group		122			1			0			123
Johnston & Murphy Group		152			0			0			152
Total Retail Stores		1,321			5			12			1,314

 

GENESCO INC.

Comparable Sales

 

	Quarter 2						Six Months
	Aug. 3, 2024			July 29, 2023			Aug. 3, 2024			July 29, 2023
Journeys Group		-1	%		-11	%		-3	%		-12	%
Schuh Group		-2	%		17	%		-4	%		15	%
Johnston & Murphy Group		-5	%		12	%		-4	%		15	%
Total Comparable Sales		-2	%		-2	%		-3	%		-4	%
Same Store Sales		-4	%		-6	%		-6	%		-7	%
Comparable E-commerce Sales		8	%		14	%		6	%		11	%

 

 

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Genesco Inc.

Adjustments to Reported Loss from Continuing Operations

Three Months Ended August 3, 2024 and July 29, 2023

The Company believes that disclosure of loss and loss per share from continuing operations and operating 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.

 

	Quarter 2									Quarter 2
	Aug. 3, 2024									July 29, 2023
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Loss from continuing operations, as reported				$	(9,929	)	$	(0.91	)				$	(31,632	)	$	(2.79	)
Gross margin adjustment:
Charges related to distribution model transition	$	169			176			0.02		$	—			—			0.00
Asset impairments and other adjustments:
Asset impairment charges	$	116			95			0.01		$	174			134			0.01
Severance		662			512			0.05			—			—			0.00
Goodwill Impairment		—			—			0.00			28,453			21,858			1.93
Total asset impairments and other adjustments	$	778			607			0.06		$	28,627			21,992			1.94
Income tax expense adjustments:
Tax impact share based awards					592			0.05						1,058			0.09
Other tax items					(577	)		(0.05	)					(1,014	)		(0.09	)
Total income tax expense adjustments					15			0.00						44			0.00
Adjusted loss from continuing operations (1) and (2)				$	(9,131	)		(0.83	)				$	(9,596	)		(0.85	)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Genesco Inc.

Adjustments to Reported Loss from Continuing Operations

Six Months Ended August 3, 2024 and July 29, 2023

The Company believes that disclosure of loss and loss per share from continuing operations and operating 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.

 

	Six Months									Six Months
	Aug. 3, 2024									July 29, 2023
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Loss from continuing operations, as reported				$	(34,217	)	$	(3.13	)				$	(50,507	)	$	(4.36	)
Gross margin adjustment:
Charges related to distribution model transition	$	1,750			1,327			0.12		$	—			—			0.00
Asset impairments and other adjustments:
Asset impairment charges	$	360			273			0.02		$	482			367			0.03
Severance		996			755			0.07			—			—			0.00
Goodwill impairment		—			—			0.00			28,453			21,858			1.89
Total asset impairments and other adjustments	$	1,356			1,028			0.09		$	28,935			22,225			1.92
Income tax expense adjustments:
Tax impact share based awards					722			0.07						1,011			0.09
Other tax items					(922	)		(0.08	)					(1,069	)		(0.10	)
Total income tax expense adjustments					(200	)		(0.01	)					(58	)		(0.01	)
Adjusted loss from continuing operations (1) and (2)				$	(32,062	)	$	(2.93	)				$	(28,340	)	$	(2.45	)

 

 

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Genesco Inc.

Adjustments to Reported Operating Income (Loss) and Gross Margin

Three Months Ended August 3, 2024 and July 29, 2023

 

 

	Quarter 2- August 3, 2024
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	(11,151	)	$	—		$	(11,151	)
Schuh Group		7,339			—			7,339
Johnston & Murphy Group		(403	)		—			(403	)
Genesco Brands Group		2,672			169			2,841
Corporate and Other		(8,731	)		778			(7,953	)
Total Operating Loss	$	(10,274	)	$	947		$	(9,327	)
% of sales		-2.0	%					-1.8	%

 

 

	Quarter 2 - July 29, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	(14,878	)	$	—		$	(14,878	)
Schuh Group		8,416			—			8,416
Johnston & Murphy Group		2,666			—			2,666
Genesco Brands Group		1,851			—			1,851
Goodwill Impairment		(28,453	)		28,453			—
Corporate and Other		(8,229	)		174			(8,055	)
Total Operating Loss	$	(38,627	)	$	28,627		$	(10,000	)
% of sales		-7.4	%					-1.9	%

 

	Quarter 2
In Thousands	Aug. 3, 2024			July 29, 2023
Gross margin, as reported	$	245,639		$	249,520
% of sales		46.8	%		47.7	%
Charges related to distribution model transition		169			—
Total adjustments		169			—
Adjusted gross margin	$	245,808		$	249,520
% of sales		46.8	%		47.7	%

 

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Genesco Inc.

Adjustments to Reported Operating Income (Loss) and Gross Margin

Six Months Ended August 3, 2024 and July 29, 2023

 

 

	Six Months August 3, 2024
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	(29,973	)	$	—		$	(29,973	)
Schuh Group		1,443			—			1,443
Johnston & Murphy Group		1,952			—			1,952
Genesco Brands Group		1,686			1,750			3,436
Corporate and Other		(17,510	)		1,356			(16,154	)
Total Operating Loss	$	(42,402	)	$	3,106		$	(39,296	)
% of sales		-4.3	%					-4.0	%

 

 

	Six Months July 29, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	(33,240	)	$	—		$	(33,240	)
Schuh Group		6,626			—			6,626
Johnston & Murphy Group		7,472			—			7,472
Genesco Brands Group		1,819			—			1,819
Goodwill Impairment		(28,453	)		28,453			—
Corporate and Other		(15,848	)		482			(15,366	)
Total Operating Loss	$	(61,624	)	$	28,935		$	(32,689	)
% of sales		-6.1	%					-3.2	%

 

	Six Months
In Thousands	Aug. 3, 2024			July 29, 2023
Gross margin, as reported	$	461,920		$	478,328
% of sales		47.0	%		47.5	%
Charges related to distribution model transition		1,750			—
Total adjustments		1,750			—
Adjusted gross margin	$	463,670		$	478,328
% of sales		47.2	%		47.5	%

 

 

 

 

 

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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	$	8.2		$	0.75		$	3.5		$	0.32
Charges related to distribution model transition		1.3			0.12			1.3			0.12
Asset impairments and other adjustments:
Asset impairments and other matters		1.4			0.13			1.8			0.16
Total asset impairments and other adjustments (1)		1.4			0.13			1.8			0.16
Adjusted forecasted earnings from continuing operations (2)	$	10.9		$	1.00		$	6.6		$	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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Summary ResultsSeptember 6, 2024 FY25 Q2 GENESCO 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 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 Our Footwear Focused Vision & Strategy

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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 Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars

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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 Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars

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Q2 FY25 • Highlights Delivered top- and bottom-line results ahead of our expectations. Sales, led by Journeys, more than offset some pressure at Schuh and Johnston and Murphy, which continued to face robust multi-year comparisons Strong sequential sales improvement, with comps turning positive in July before the onset of back-to-school, and accelerating into August Journeys store traffic nicely outpaced the broader market as it accelerated through the quarter Overall company digital business was a standout, with comparable e-commerce sales up 8%, representing 22% of retail sales We further strengthened the connections with our consumer through progress on loyalty and customer insights across our businesses Inventory remained well controlled, with total company inventory down 8% versus last year and Journeys inventory down 9% We ended the quarter with 61 fewer stores versus a year ago as we continued to optimize our store footprint and drive productivity in our remaining store fleet

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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 Journeys Consumer - Centric Growth Strategy

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$525 MILLION IN SALES +8% GROWTH IN COMPARABLE E-COMMERCE SALES vs. Q2 FY2024 $(0.91) GAAP EPS $(0.83) NON-GAAP EPS 22% E-COMMERCE PENETRATION vs. 21% Q2 FY2024 Q2 FY25 Key Earning Highlights

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Q2 FY25 • Key Earning Highlights

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6mos FY25 • Key Earning Highlights

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(1) 53-week period for trailing twelve months ended August 3, 2024 and 52-week period for trailing twelve months ended July 29,2023. (2) Retail sales represent combined store sales and e-commerce sales % of Retail Sales (2) 31% 25% 21% 22% 21% 24% 9% 9% Q2 FY25 • E-Commerce Sales Highlights

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Q2 FY25 • Comparable Sales

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FY25 Net Sales $525.2 Million Q2 FY25 Sales by Segment FY24 Net Sales $523.0 Million Journeys Schuh Johnston & Murphy Group Genesco Brands Group

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6mos FY25 Sales by Segment FY25 Net Sales $982.8 Million FY24 Net Sales $1.0 Billion Journeys Schuh Johnston & Murphy Group Genesco Brands Group

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Q2 FY25 • Adjusted Operating Income Statement (1)

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6mos FY25 • Adjusted Operating Income Statement (1)

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Q2 FY25 Inventory/Sales Change by Segment

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Q2 FY25 • Retail Store Summary

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For Q2 FY25 Retail Square Footage

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(1) FY25 Outlook Note: See earnings call transcript for important details regarding guidance assumptions. Additional color on anticipated sales growth by business: Journeys Group: Roughly flat Schuh Group: Low-single digit percentage decline Johnston & Murphy Group: Mid-single digit percentage decline Genesco Brands Group: Low-double digit percentage decline (1) On a Non-GAAP basis (2) Versus prior guidance of total sales decrease of 2% to 3%, or down 1% to 2% excluding the 53rd week in FY2024

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FY25 Projected Retail Store Count

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

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Appendix

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Q2 FY25 • Non-GAAP Reconciliation

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6mos FY25 • Non-GAAP Reconciliation

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Q2 FY25 • Adjusted Gross Margin

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6mos FY25 • Adjusted Gross Margin

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Summary ResultsSeptember 6, 2024 FY25 Q2 GENESCO

v3.24.2.u1

Document And Entity Information	Sep. 06, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 06, 2024
Entity Registrant Name	GENESCO INC.
Entity Central Index Key	0000018498
Entity Emerging Growth Company	false
Entity 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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