Companies

Genesco lowers full year earnings guidance

Jan 12, 2024 United States

After posting weak Christmas sales, the Nashville-based footwear company has lowered its earnings guidance for fiscal 2024. Journeys continues to struggle

“Following a positive start to the holiday season, sales decelerated in the weeks approaching Christmas, as consumer shopping trends remained choppy and peak shopping days were not enough to offset the lulls in between”, explained Mimi E. Vaughn, Genesco board chair, president, and chief executive officer.

In the nine weeks to the 30^th of December 2023, the company’s comparable sales, including both stores and direct sales, declined by 4%, on a comparable basis to the same period of the prior fiscal year. Broken down, Genesco’s same-store sales in this period decreased by 6% year-over-year and sales in the e-commerce business rose by 3% year-over-year.

The Journeys group continues to struggle, as “store results were pressured despite our more promotional stance. While consumer appetite for key items remained strong, there was less interest in boots, which are a meaningful part of our winter assortment”. This resulted in a comparable sales decline of 6% in these nine weeks, as compared to a similar period of fiscal 2023.

The Schuh group posted a comparable sales decrease of 5%, but on the other hand, like-for-like sales at Johnston & Murphy increased by 11%, on a comparable basis to the same period of the previous year. “Positively, momentum remained strong at Johnston & Murphy, helping to counter the lower-than-expected results at Journeys, and our online businesses continued to post solid gains”, commented Genesco’s CEO.

Overall, Genesco now expects full year adjusted earnings per share in the range of 0.65 US dollars to 0.85 US dollars, as compared to the previous guidance of adjusted earnings per share in the range of 1.50 US dollars to 2.00 US dollars.

“Looking forward, we are on course to enter fiscal 2025 with clean inventories and we will continue our efforts to better align our merchandise assortments with current consumer demand, while also reshaping our cost base. These actions, combined with our other strategic initiatives to elevate and evolve the Journeys business, are aimed at driving improved long-term value”, concluded Mimi E. Vaughn.

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