Genesco Inc. (NYSE:GCO) reported fiscal 2027 second-quarter results on Thursday. Following the results, the stock rose over 3%.
The footwear retailer posted an adjusted loss of 83 cents per share. That was narrower than the analyst consensus estimate for a loss of $1.37 per share and the year-ago loss of $1.14 per share.
Quarterly sales fell 3% to $529.858 million from $545.965 million a year earlier. However, sales topped the $527.260 million consensus estimate, according to Benzinga Pro.
Comparable sales declined 1%. Same-store sales rose 1%, while comparable e-commerce sales fell 6%. Journeys comparable sales increased 2%, and Johnston & Murphy comparable sales rose 4%. Schuh comparable sales declined 9%.
Adjusted gross margin expanded 140 basis points to 47.2%, driven by less promotional activity and stronger full-price selling. Genesco’s adjusted operating loss narrowed to $8.3 million from $14.3 million a year earlier. Adjusted operating margin improved to negative 1.6% from negative 2.6%.
GAAP earnings reached 32 cents per share, compared with a loss of $1.79 per share a year earlier.
Genesco CEO Mimi Vaughn said the company delivered a much stronger second quarter than a year ago and exceeded its own expectations. She pointed to the company’s Footwear First strategy as a key driver, with Journeys and Johnston & Murphy both posting positive comparable sales. Improved earnings were supported by stronger full-price selling, which helped rebuild gross margins, along with disciplined cost management.
Vaughn noted that the sales decline was largely tied to deliberate moves, including store closures, the company’s license transition and reduced discounting at Schuh. With those temporary pressures expected to ease, she said Genesco anticipates improving sales trends and remains confident that its ongoing initiatives can support profitable growth.
She added that the third quarter has started on a positive note, with back-to-school demand helping Journeys accelerate to mid-single-digit comparable sales growth in August, building on strong gains over the past two years.
Guidance Update
Genesco maintained its adjusted diluted earnings per share guidance range of $2 to $2.40 for fiscal 2027. However, the company now expects results at the high end of that range. Analysts expect $2.25 per share.
The company lowered its sales outlook to about $2.387 billion from its prior range of $2.412 billion to $2.436 billion. That compares with the $2.430 billion analyst estimate.
Genesco raised its GAAP earnings forecast to $2.96 to $3.39 per share from $2.32 to $2.75. Analysts expect $2.24 per share.
Tariff Refunds And Cost Savings
Genesco received $22.5 million in tariff refunds, including interest, during the quarter. The refunds were excluded from adjusted results, and the company included no additional refunds in its full-year outlook.
A cost-reduction program is expected to generate $40 million to $50 million in savings through fiscal 2029. Genesco expects to realize up to $20 million this year.
Balance Sheet And Store Count
Cash stood at $57.1 million as of Aug. 1, up from $41 million a year earlier. Total debt declined to $15.8 million from $71 million. Inventory rose 8%, primarily due to higher inventory at Journeys.
Capital expenditures totaled $17 million, while depreciation and amortization reached $13 million.
Genesco opened three stores and closed 25 during the quarter. It ended the period with 1,186 stores, down 5% from 1,253 a year earlier.
The company did not repurchase shares during the quarter. However, it bought back 317,503 shares in the third quarter through Aug. 31. Genesco has $18.8 million remaining under its repurchase authorization.
GCO Stock Price Activity: Genesco shares were up 3.04% at $34.54 during premarket trading on Thursday, according to Benzinga Pro data.
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