Companies

Genesco reports sales growth in the third quarter

Dec 12, 2024 United States

The US-based company positively adjusted its 2025 guidance, driven by solid e-commerce growth, improved consumer experiences and robust sales momentum at Journeys during the third quarter

“Our quarterly performance once again exceeded expectations and marked a return to positive overall comparable sales. Following a strong start to the third quarter including the heart of back-to-school, sales trends at Journeys remained robust in September and October, fueling a double-digit comp gain for the business”, commented Mimi E. Vaughn, Genesco’s Chief Executive Officer.

“This result”, – he continued – “was driven by the initial phase of Journeys’ strategic growth plan, which has focused on elevating the consumer experience, including improving the product assortment and visually resetting our stores. EPS would have been stronger without the shift of an important back-to-school week into the second quarter this year”.

Third Quarter Review

For the third quarter that ended on the 2nd of November 2024, Genesco reported a 3% year-over-year increase in net sales for the period in fiscal 2025, reaching 596 million US dollars. Comparable sales rose by 6%, bolstered by a 15% surge in e-commerce and a 4% rise in same-store sales compared to the same period last year.

On a comparable basis, Journeys sales growth increased by 4%, Schuh recorded a 3% gain, and Genesco Brands grew by 10%, while Johnston & Murphy faced a 4% decline. Gross margin decreased slightly to 47.8% due to product mix changes at Journeys. Selling and administrative expenses improved marginally, reflecting cost-saving initiatives and store closures.

Despite these gains, GAAP operating income for the quarter declined to 10.2 million from 10.9 million US dollars in the previous year, with adjusted operating income also slightly down. Adjusted earnings per share from continuing operations were 0.61 US dollars, up from 0.57 US dollars in the previous fiscal. The company ended the quarter with 33.6 million US dollars in cash, a 12 million US dollars year-over-year increase.

Inventory levels rose by 1% on a comparable basis, driven by growth in Genesco Brands, while Schuh and Johnston & Murphy reduced stock. Capital expenditures for the quarter totalled 13 million US dollars, with investments primarily in retail and digital initiatives. Genesco closed 14 stores and opened two, bringing its total store count to 1,302, down by 4% from last year.

2025 Guidance

Looking ahead, Genesco has revised its fiscal 2025 outlook, anticipating total sales to be down by 1% to flat versus prior expectations of sales decreasing by 2% to 1%, excluding the 53rd week in fiscal 2024. Adjusted diluted earnings per share are projected to range between 0.80 US dollars and 1.00 US dollar, up from the previous guidance of 0.60 US dollars to 1.00 US dollar.

Image Credits: genesco.com

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