“Following a good Back-to-School season, demand in October softened in an ongoing challenging operating environment, along with a delayed start to the fall selling season. Disruptions related to the implementation of a new ERP system for our branded businesses added to the pressure, all leading to results that were below our expectations. Despite these headwinds, we were pleased to see sales trends within our Journeys business continue to sequentially improve, and Schuh and Johnston & Murphy deliver record third-quarter sales. In the meantime, we continued to inject Journeys’ product assortment with more of the newness and must-have items our customer desires, while also executing on our cost reduction and store closure plans”, commented Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer.

Third Quarter Results

In the third quarter of fiscal 2024, the company’s net sales amounted to 579 million US dollars, decreasing by 4%, on a comparable basis to the same period of last year.

This result was driven by a decline of 8% in store sales at Journeys and a 22% decrease at Genesco Brands, partially offset by an increase of 13% at Schuh and a growth of 22% at Johnston & Murphy, as compared to the third quarter of fiscal 2023.

 
In the three months running to the 28^th of October, the company’s gross margin narrowed by 60 basis points to 48.1% from 48.7% in a similar period a year ago, due to “increased promotional activity at Journeys”, “more normalized markdowns and closeouts at Johnston & Murphy and increased shipping and warehouse expense in all retail businesses”.

Genesco’s third quarter net earnings fell significantly to 6.5 million US dollars, or 0.60 US dollars per diluted share, on a comparable basis to the 20.4 million US dollars, 1.65 US dollars per diluted share, recorded in the same quarter of fiscal 2023.

Full Year Outlook

“Fourth quarter-to-date, I’m pleased to say our total comps are currently running positive and we experienced a strong start to the holiday season. However, as consumer shopping behaviour remains choppy, we plan to increase our promotional activity, especially at Journeys, for the remainder of the holiday season to be more competitive and drive sales in this environment”.

Therefore, the US-based company has revised its guidance for fiscal 2024 and now expects its sales to decline by 1% to 2%, or by 2% to 3% excluding the 53^rd week this year, as compared to the prior fiscal year. Adjusted diluted earnings per share from continuing operations are, however, anticipated between 1.50 US dollars to 2.00 US dollars.