Genesco Inc. Q4 FY2026 earnings call

• Mimi Vaughn thanked Sandra Harris for her contributions and announced she will assume interim CFO role. • Discussed strong fourth quarter results with total comparable sales up 9%, Journeys leading with double-digit comp gains, SHU facing challenges due to promotional environment. • Johnston & Murphy made encouraging progress with comps improving and partnership with Peyton Manning generating engagement. • Genesco Brands Group in transition with tail end of license exits and tariff impacts weighing on results but preparing for Wrangler Footwear launch. • Emphasized need to evolve concepts to meet customer needs, with Journeys as top priority and focus on other businesses including SHU.

For the quarter, total comparable sales increased 9%. Journeys led with 12% growth, driven by continued strength in key franchises and full price selling. Johnston & Murphy comps increased 2%, with sequential improvement in December and January. SHU comps rose 3%, driven in part by holiday promotional activity. Adjusted gross margin for the quarter declined 90 basis points versus last year, primarily driven by heightened promotional activity at SHU, ongoing tariff pressure, and changes in channel mix at Genesco Brands. Journeys and Johnston & Murphy gross margins were supported by strong full-price selling. SG&A expense was 39.1% of sales, leveraging 140 basis points year over year. Adjusted operating income was $56 million for the quarter, an increase of 17% compared to $48 million last year. Adjusted diluted EPS was $3.74 versus $3.26 in Q4 last year. Full-year adjusted diluted EPS was $1.45 versus $0.94 last year.

• Fiscal 27 guidance: Expected comparable sales increase 1%-2%, total sales range from down 1% to flat. • Journeys comps projected positive, Johnson & Murphy sales to increase mid-single digits, Genesco Brands sales to decline. • Gross margin expected to improve 50-60 basis points. • SG&A as percent of sales to deleverage 10-30 basis points. • Adjusted operating income expected $32-$38 million, adjusted EPS $1.90-$2.30. • Capital expenditures approximately $65-$70 million. • First quarter comps in line with full year range, but sales down due to store closures and license exits, gross margin flattish, SG&A deleverage at high end of range leading to adjusted operating loss and lower EPS.

• Consumer environment remains selective and intentional with peaks and valleys. • SHU facing challenges with heavy promotional activity impacting profitability. • Tariff pressure with higher unmitigated dollar exposure in fiscal 27. • Seasonal earnings profile causing distorted quarterly EPS comparisons due to tax rate volatility.

Q: On Journeys, how is the business performing quarter to date, comp expectations and comp by quarter.

A: Quarter to date tracking mid-single digits, expecting higher comp in early part of year with tailwind from tax refunds and higher comp in back part of year.

Q: Changes to Journeys assortment, new brands.

A: Growth spread across existing franchises, not dependent on adding new brands but expecting growth from new brands and additional product.

Q: SHU gross margin pressure in 26 and recovery in 27.

A: 60% of 250 basis points gross margin deleverage in 26 attributable to SHU, expecting to make good dent in recovery in 27 but not all back in one year.

Q: Canvas category performance and pipeline.

A: Canvas continues to be relevant but not anticipating growth overall for 2026.

Q: Brands engaging with Journeys for premium in-store experiences.

A: Brands excited about serving coveted customer, continuing activations and building premium assortment.

Q: ASP breakdown, premium assortment vs product pipeline.

A: Both from expanding premium assortment and industry price increases, including tariff impacts.

Q: Store openings and closings timing.

A: 4.0 stores open evenly Q1-Q3 with double in Q3, Johnson & Murphy stores opening in Q3-Q4, store closures around lease expiration split between Q1-Q2 and trailing off.

Q: Licensed businesses sales and gross margin.

A: Licensed businesses sales down net 30, most pressure in second and third quarters, aiming to get back to higher gross margins but Wrangler launch will take time.

Q: Traffic, ticket, inventory.

A: Traffic down in industry, Journeys saw higher conversion, units down in inventory with SHU selling off inventory and Genesco Brands with license exits.

Q: 4.0 store comps vs rest of chain.

A: 4.0 stores comping 25% plus, stronger in all aspects including traffic, conversion, selling prices and new customers.