Genesco Inc. (NYSE:GCO) stock rose Friday after the footwear and apparel retailer reported first-quarter sales that topped Wall Street expectations and raised its full-year earnings outlook, signaling improving momentum across several of its key brands.
Investors also responded positively to the company’s planned cost-cutting initiatives and the prospect of tariff refunds that could further support profitability in the coming years.
First-Quarter Results
Genesco reported a first-quarter adjusted loss of $2.18 per share, narrower than analysts’ expectations for a loss of $2.56 per share.
Revenue increased 3% year over year to $487.0 million, exceeding the consensus estimate of $475.0 million.
Comparable sales rose 2% during the quarter, driven by a 3% increase in store sales, while e-commerce sales were flat.
Gross margin expanded by 30 basis points from the prior-year period, primarily due to lower shipping and warehouse costs and reduced promotional activity. Those gains were partially offset by changes in brand mix at Journeys and Schuh.
Journeys delivered a 5% increase in comparable sales, while Johnston & Murphy posted stronger growth, with comparable sales rising 7%. In contrast, Schuh’s comparable sales fell 9% as the retailer intentionally reduced promotional activity and shifted its focus toward full-price selling.
“Journeys’ comparable sales grew mid-single-digits on top of a high-single-digit gain last year, as our work around product elevation and customer experience continues to drive market share gains,” CEO Mimi E. Vaughn said.
“At the same time, Johnston & Murphy’s comparable sales accelerated sharply, increasing high-single-digits, while Schuh’s comparable sales performance reflects our decision to pull back on promotions and prioritize a more full-price selling model.”
Cash totaled $27.1 million as of May 2, compared with $21.7 million a year earlier. Total debt stood at $45.3 million at the end of the quarter.
Tariff Refunds And Cost Savings
Genesco said it expects to receive between $23 million and $25 million in tariff refunds related to its branded businesses and has already submitted claims. The anticipated refunds were not included in the first-quarter results or the company’s fiscal 2027 guidance.
The company also announced a cost-reduction program expected to generate $40 million to $50 million in savings through fiscal 2029.
Outlook
Genesco raised its fiscal 2027 adjusted earnings guidance to a range of $2.00 to $2.40 per share, up from its previous forecast of $1.90 to $2.30 per share. The updated outlook brackets the analyst consensus estimate of $2.13 per share.
The company affirmed fiscal 2027 revenue guidance of $2.412 billion to $2.436 billion, compared with analysts’ estimate of $2.434 billion.
Genesco also maintained its expectation for comparable sales growth of 1% to 2% in fiscal 2027.
GCO Price Action: Genesco shares were up 4.37% at $37.97 at the time of publication on Friday. The stock is approaching its 52-week high of $38.95, according to Benzinga Pro data.
Photo by JHVEPhoto via Shutterstock
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