Genesco (GN8) Q2 2027 Earnings Report

The call was broadly optimistic. Management reported meaningful earnings improvement, gross-margin expansion, strong momentum at Journeys and Johnston & Murphy, progress at Schuh, structural cost savings, and a full-year EPS outlook at the high end of the prior range. These positives outweighed the declining quarterly sales, weaker Schuh performance, challenging consumer environment, expected second-half sales pressure, and temporary third-quarter operating-income decline.

Genesco now expects fiscal 27 adjusted diluted earnings per share to be at the high end up from the middle, of its previously increased range of $2 to $2.40; full year comparable sales are expected to be flat versus the prior expectation of up 1% to 2%, total sales down approximately 2% versus the prior expectation of down 1% to flat, gross margin expansion of 60 to 80 basis points versus 50 to 60 basis points, SG&A as a percentage of sales to deleverage approximately 30 basis points versus flat to 20 basis points of deleverage, adjusted operating income within the prior range of $34 million to $40 million with the higher end of the range up from the middle now the most likely outcome, an adjusted effective tax rate of approximately 30%, and a weighted average diluted share count of approximately 10.8 million shares; fiscal 27 is expected to realize up to $20 million of savings, with the remaining $20 million to $30 million expected over the following 2 years. For the third quarter, the company expects roughly flat comparable sales, total sales down a little over 4% to 4.5%, $14 million of loss from license exits, gross margin expansion of 90 to 100 basis points, SG&A deleverage that will more than offset the gross margin expansion, 100 basis points of pressure from increased marketing and investment, a tax rate of approximately 7% to 8%, operating income to be moderately below last year, and EPS to be $0.05 to $0.15 higher.