"We are very pleased with our start to fiscal 2023, particularly our ability to exceed profitability expectations. While the year ago period posed a difficult comparison due to government stimulus-fuelled consumer spending, especially for our Journeys business, our top and bottom-line performance on a multi-year basis underscores the success of our footwear focused strategy and our conviction that our company is fundamentally stronger than prior to the pandemic. Importantly, our business accelerated sequentially in April and thus far in May versus last year as inventory levels improved", commented Mimi E. Vaughn, Genesco board chair, president and chief executive officer.

First Quarter Results

In the first quarter of fiscal 2023, Genesco reported net sales of 531 million US dollars, which reflects a decline of 3%, as compared to net sales of 539 million US dollars in the first quarter of fiscal 2022, and an increase of 5% from 496 million US dollars in the same quarter of fiscal 2020, before the pandemic.

The decline was led by Journeys, whose sales declined by 16%, on a comparable basis to the first quarter of fiscal 2022, totalling 314.44 million US dollars. The company recalled that the brand was the biggest beneficiary of government stimulus in the first quarter of last year, and experienced a lack of inventory in April due to the impact of supply chain disruptions.

This result was, however, partially offset by sales increases in other segments: Schuh revenue grew by 28%, amounting to 88.16 million US dollars, Johnston & Murphy revenue was up by 46%,  adding up to 71.06 million US dollars, and Licensed Brand revenue rose by 5% to 47.13 million US dollars.

In the three months to the 30^th of April, Genesco’s gross margin widened by 50 basis points to 48.3% from 47.8% in the same period last year, and as compared with 49.9% in fiscal 2020. The increase is mainly due to lower shipping and warehouse expenses and increased full-price selling, partially offset by the channel mix impact of increased wholesale sales and freight and logistics costs.

The company reported that net earnings from continuing operations declined to 5.0 million US dollars in the first quarter of fiscal 2023, on a comparable basis with 8.9 million US dollars in the first quarter of fiscal 2022, and 6.5 million US dollars in the first quarter of fiscal 2020. Adjusted earnings per share were 0.44 US dollars, as compared to 0.79 US dollars and 0.33 US dollars in the first quarter of financial 2022 and 2020, respectively.

Fiscal 2023 Outlook  

For fiscal 2023, Genesco is expecting sales up by 1% to 3%, as compared with the past fiscal year, and adjusted diluted earnings per share from continuing operations in the range of 7.00 US dollars to 7.75 US dollars.