Genesco : Presentation

Published: 2025-06-04 06:57:05 ET GCO

Published on 06/04/2025 at 06:57

Sum m ar y Result s • June 4 , 2025

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.

Q1 FY26 Financial Snapshot

SALES

$474M

Up 4% vs Q1 FY2025 with e-commerce 23%

of retail sales

SG&A

$249M

52.5% of sales and 170 bps leverage

vs Q1 FY2025

COMPS

+5%

Stores E-commerce Journeys

+5% +7% +8%

GAAP OI

($28.1M)

Non-GAAP OI

($27.9M)

GROSS MARGIN

46.7%

Down 60 bps vs Q1 FY2025

Non-GAAP gross margin down 90 bps vs Q1 FY2025

GAAP EPS

($2.02)

Non-GAAP EPS

($2.05)

GAAP EPS $0.20 improved vs Q1 FY2025

Non-GAAP EPS $0.05 improved vs Q1 FY2025

Q1 FY26 • Highlights

Top and bottom-line results exceed expectations

All channels posting positive growth

Comparable sales increased 5%, our third consecutive positive increase, with both stores up mid-single digits and online up high single digits

Wholesale channel growth of 5%

Journeys comps were strongly positive for the third consecutive quarter as well, up 8%, and Schuh continued its positive comp run from Q4

Operating expense leveraged 170 basis points benefitting from our ongoing cost

reduction efforts

Operating income and EPS improved year over year driven by higher sales and better expense leverage; EPS would have been $0.05 better, excluding opportunistic share repurchases in Q1

Company reiterates full year EPS outlook, inclusive of current tariffs

Our Footwear Focused Vision & Strategy

OUR ASPIRATION HOW WE WILL ACHIEVE IT

Create and curate leading footwear brands that represent style, innovation and self-expression; be the destination for our consumers' favorite fashion footwear

Build enduring relationships with our target customers, grounded in unparalleled

consumer and market insights

Deliver exciting, distinctive products and experiences across physical and digital

Our Footwear Focused Vision & Strategy

Strategic Initiatives/Pillars

OUR PLATFORMS ENABLE THE STRATEGY UNITED BY DTC CAPABILITIES

1

ACCELERATE

DIGITAL

2 3

MAXIMIZE PHYSICAL & DIGITAL

DEEPEN CONSUMER INSIGHTS

4

INTENSIFY PRODUCT INNOVATION

5

RESHAPE & REINVEST COST BASE

6

PURSUE GROWTH & ACQUISITIONS

RETAIL PLATFORM

The destination for young adult and teen fashion footwear and partner of choice for leading global brands

BRANDED PLATFORM

Portfolio of leading owned and licensed brands

What is Journeys Strategic Growth Plan?

Multi-Brand, multi-category offering to inspire the journey from one you to the next

There is white space in the market for Journeys to

expand its reach amongst teens with a sharp focus on females

STYLE-LED FOOTWEAR DESTINATION

We have sharpened our consumer focus, targeting three consumer segments reaching a wider teen audience.

@ANTI-HERO

@STYLECHASER

@DYNAMICEXPLORER

Independent

Heritage Journeys consumer

Self-expression

What's cool & fashionable

More mainstream

Later trend adopters

Many different styles What's new & next Seeks latest trend

Hold

Accelerate

Validate

Journeys Today

Journeys Future

6 to 7 TIMES BIGGER TOTAL ADDRESSABLE MARKET (TAM)

Diversify Our Footwear Leadership

Invest In Our Journeys Brand

Elevate Our Customer Experience

Elevate our product to lead across multi-categories

Evolve the assortment to become a leading footwear destination and create sustainable growth.

Strengthen strategic partnership with lead brands

Build athletic as third pillar of assortment with casual & canvas

Sharp focus on the teen girl as a differentiator

Drive ASP growth through outpaced premium product growth

Establish incubation strategy for new brand and new model launches

Invest In The Journeys Brand

Evolve the marketing strategy to engage teen consumer target

Reenergize the Journeys brand, making it the ultimate destination for discovery to reach and excite the next generation of fans

FROM TO

House of brands

Singular focus on Anti-Hero

Over reliance on tactical marketing

Product only campaigns Minimal use of social media

Branded house

Expanded segmentation

More balanced, full funnel and brand approach

Product AND brand Double down on social

Elevate Our Customer Experience

Refresh our consumer touch points to fuel discovery

4.0 - Next generation store concept to support our strategy

Store Website Social

All serving our consumer segments and new consumers

All delivering on our premium style led footwear destination

4.0 stores: Modular and flexible designs, enhanced visuals and storytelling, footwear focused, digital integration, connected with our heritage.

Tariff Exposure

Based on what we know today, we expect our mitigation actions will mostly offset the tariff impact for the year

Our retail business, comprised of Journeys and Schuh, represents approximately 80% of Genesco's

business where we sell a mix of mostly larger, premium, global brands with diversified sourcing.

Our branded business, comprised of Johnston & Murphy and Genesco Brands Group, represents approximately 20% of Genesco's business and we have been working diligently over the past several years to diversify countries of production and lower our China exposure.

Along with our retail business, we estimated our exposure at the beginning of Fiscal 2026 to

China tariffs to be a little more than 10% for Genesco overall

Unmitigated cost increases within our branded business would be roughly $15M for this fiscal year reflecting the current higher tariffs and assuming no changes in sourcing

We are taking the following actions to mitigate this cost pressure:

Accelerating, increasing or cancelling inventory

Further diversifying suppliers and re-sourcing to countries with lower tariffs

Working with longstanding factory partners to reduce costs

Identifying further cost reductions across our business

Planning for strategic price increases targeted more toward the back half of the year

Tariff Exposure - Continued diversification out of China expected throughout FY26

Genesco Estimated FY26 Revenue

Reciprocal Tariff Affected Countries

(estimated at beginning of FY26)

52%

Vietnam, India,

Cambodia

11% China1

schuh

~80%

19%

Branded

81%

Retail

Impacted by Reciprocal Tariffs

6%

Rest of World

11%

6%

Journeys

3% GBG

2% J&M

China1

5% EU

5%

Central & Latin America

1 We expect China exposure to be half this percentage or less by the end of FY26

Quarter 4(1) Quarter 4(1)

Feb 3, 2025 Jan 28, 2024

Q1 FY26 • Key Earnings Highlights

Quarter 1

May 3, 2025

Quarter 1

May 4, 2024

Total Sales Change

4%

-5%

Total Comparable Sales

5%

-5%

Journeys Group Schuh Group

Johnston & Murphy Group

8%

1%

-2%

-5%

-7%

-3%

Same Store Sales

Comparable E-commerce Sales

5%

7%

-7%

3%

Gross Margin % (1)

GAAP

Non-GAAP

46.7%

46.7%

47.3%

47.6%

Selling and Admin. Expenses %

52.5%

54.2%

Operating Loss % (1)

GAAP

Non-GAAP

-5.9%

-5.9%

-7.0%

-6.5%

Loss per Diluted Share (1)

GAAP

Non-GAAP

($2.02)

($2.05)

($2.22)

($2.10)

(1)See GAAP to Non-GAAP adjustments in appendix.

Q1 FY26 Capital Allocation Snapshot

TOTAL LIQUIDITY

~$230M

Liquidity is comprised of cash and borrowing available under bank facilities

INVENTORY

$451M

+15% vs Q1 FY2025

to meet Journeys growth

CAPITAL EXPENDITURES

$19M

~85% allocated to stores

~15% to other

SHARE REPURCHASES

$13M

$30M remaining under current authorization

STORE COUNT

1,256

4 26

Opened Closed

JOURNEYS 4.0

29

remodels

39 total remodels to date 75+ by end of year

FY26 • Strong Digital Growth

Quarter 1

Trailing 12 months(1)

$500

$400

$600

$500

$545

$486

12%

$ in Millions

$ in Millions

$400

$300

$200

$100

$-

31%

25%

FY25 FY26

$300

$200

$93

$98

5%

$100

$-

FY25 FY26

% of Retail Sales (2) 23% 23%

23% 25%

(1) 52-week period for trailing twelve months ended May 3, 2025 and 53-week period for trailing twelve months ended May 4, 2024.

(2) Retail sales represent combined store sales and e-commerce sales

20%

16%

6%

58%

Q1 FY26

Net Sales

$474.0 Million

Q1 FY26

Sales by Segment

Q1 & Proj 12 mos FY26 • Retail Store Summary

Q1 FY26

Feb. 1,

2025

Open

Close

May 3,

2025

Journeys Group

1,006

2

19

989

Schuh Group

124

0

3

121

Johnston & Murphy Group

148

2

4

146

Total Stores

1,278

4

26

1,256

Projected 12 mos FY26

Feb. 1,

2025

Open

Close

Jan. 31,

2026

Journeys Group

1,006

4

57

953

Schuh Group

124

1

7

118

Johnston & Murphy Group

148

17

5

160

Total Stores

1,278

22

69

1,231

FY26 • Outlook (1)

Reiterates FY26 EPS Outlook:

Note: See earnings call transcript for important details regarding guidance assumptions

Non-GAAP EPS

$1.30 to $1.70 per share (includes current tariff impact)

Total Sales vs. FY2025

up 1% to 2% due to FX (vs. previous flat to up 1%)

Comparable Sales

up 2% to 3%

(vs. previous up 2% to 4%)

Gross Margin vs. FY2025

down 20 to 30 basis points

SG&A Expenses vs. FY2025

50 to 70 basis points leverage

Tax Rate

~ 29%

CapEx

~ $50 - $65 million

(70% allocated to stores; 30% to other)

Depreciation & Amortization

~ $50 - $55 million

Avg Shares Outstanding

10.6 million

(assumes no further repurchases)

Additional color on anticipated sales growth by business:

Journeys: Low-single digit percentage increase

schuh: Low-single digit percentage increase (vs. previous low-single digit decrease)

Johnston & Murphy: Low-single digit percentage increase

Genesco Brands Group: High-single digit percentage decrease (vs. previous low-single digit decrease)

(1)On a Non-GAAP basis

Q1 FY26 • Adjusted Operating Income Statement (1)

Quarter 1

May 3, 2025 May 4, 2024

In Thousands

Oper Inc

(Loss)

Adjust

Adj Oper

Inc (Loss)

Oper Inc

(Loss)

Adjust

Adj Oper

Inc (Loss)

Journeys Group

$ (15,283) $

-

$ (15,283)

$ (18,822)

$ -

$ (18,822)

Schuh Group

(6,131)

-

(6,131)

(5,896)

-

(5,896)

Johnston & Murphy Group

500

-

500

2,355

-

2,355

Genesco Brands Group

698

-

698

(986)

1,581

595

Corporate and Other

(7,929)

291

(7,638)

(8,779)

578

(8,201)

Total Operating Loss

$ (28,145) $

291

$ (27,854)

$ (32,128)

$ 2,159

$ (29,969)

% of sales

-5.9%

-5.9%

-7.0%

-6.5%

Depreciation and amortization

13,393

13,237

Adjusted loss before interest, taxes, depreciation and amortization ("EBITDA") (2)

$ (14,461)

$ (16,732)

% of sales

-3.1%

-3.7%

(1)See GAAP to Non-GAAP adjustments in appendix.

(2)Excludes "Other components of net periodic benefit cost" line item on the Consolidated Statements of Operations.

Q1 FY26 • Non-GAAP Reconciliation

In Thousands (except per share amounts)

Quarter 1

May 3, 2025 May 4, 2024

Net of

Per Share

Net of

Per Share

Pretax

Tax

Amounts

Pretax

Tax

Amounts

Loss from continuing operations, as reported

Gross margin adjustment:

$ (21,212)

$ (2.02)

$ (24,288)

$ (2.22)

Charges related to distribution model transition

$ -

-

0.00

$ 1,581

1,151

0.10

Asset impairments and other adjustments:

Asset impairment charges

$ 34

24

0.00

$ 244

178

0.02

Severance

257

185

0.02

334

243

0.02

Total asset impairments and other adjustments

$ 291

209

0.02

$ 578

421

0.04

Income tax expense adjustments:

Tax impact share based awards

139

0.01

130

0.01

Other tax items

(666)

(0.06)

(345)

(0.03)

Total income tax expense adjustments

(527)

(0.05)

(215)

(0.02)

Adjusted loss from continuing operations (1) and (2)

$ (21,530)

$ (2.05)

$ (22,931)

($2.10)

(1)The adjusted tax rate for the first quarter of Fiscal 2026 and 2025 is 26.7% and 26.0%, respectively.

(2)EPS reflects 10.5 million and 10.9 million share count for the first quarter of Fiscal 2026 and 2025, respectively, which excludes common stock equivalents in both periods due to the loss from continuing operations.

Q1 FY26 • Adjusted Gross Margin

Quarter 1

In Thousands

May 3, 2025

May 4, 2024

Gross margin, as reported

$ 221,181

$ 216,281

% of sales

46.7%

47.3%

Charges related to distribution model transition

-

1,581

Total adjustments

-

1,581

Adjusted gross margin

$ 221,181

$ 217,862

% of sales

46.7%

47.6%

Sum m ar y Result s • June 4 , 2025

Disclaimer

Genesco Inc. published this content on June 04, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on June 04, 2025 at 10:56 UTC.