Genesco Stock Slumps After Q4 Results: EPS & Sales Miss Estimates, Issues Dull FY26 Outlook

Genesco Inc. GCO shares are trading lower on Friday.

The company reported fourth-quarter adjusted earnings per share of $3.26, missing the street view of $3.31. Quarterly sales of $745.949 million (increased 1% year over year) missed the analyst consensus estimate of $784.85 million.

Comparable sales increased by 10%, with stores growing by 6% and e-commerce rising by 18%. E-commerce sales accounted for 30% of retail sales, compared to 27% last year.

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Fiscal fourth quarter gross margin was 46.9%, up 60 basis points compared with 46.3% last year. The increase was primarily due to lower markdowns at Journeys and improved margins at Genesco Brands and Johnston & Murphy, partially offset by increased promotional activity at Schuh.

Adjusted operating margin was 6.4% of sales, compared with 5.2% in the year-ago period.

Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “Our performance was led by Journeys as the strategic growth initiatives we’ve implemented over the past 12 months fueled strong full priced selling and mid-teens comp growth.”

“At the same time, sales trends at Schuh and Johnston & Murphy further improved with fourth quarter comps for both businesses reaching the highest level of the year,” Vaughn added.

Cash as of February 1 was $34.0 million, compared with $35.2 million as of February 3, 2024. Total debt at the end of the fourth quarter was zero compared with $34.7 million at the end of last year’s fourth quarter.

Genesco said it achieved the higher-end of its target run-rate range of $45 to $50 million in total expense savings through the cost reduction program that began in fiscal 2024.

Inventories increased 12% year over year, reflecting increased inventory for Journeys, Johnston & Murphy, and Genesco Brands, partially offset by a decrease at Schuh.

Outlook: For Fiscal 2026, the company expects total sales to be flat to up 1% compared to fiscal 2025 including a foreign exchange negative impact of approximately $14 million and closed store impact of approximately $30 million.

Genesco sees FY26 adjusted earnings per share from continuing operations in the range of $1.30 – $1.70 versus $2.35 estimate.

Price Action: GCO shares are trading lower by 19.6% to $26.06 at last check Friday.

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