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NASHVILLE - On Thursday, Genesco Inc. (NYSE:GCO) raised its full-year sales forecast but maintained its earnings guidance, as tariff pressures and a promotional UK market offset stronger-than-expected second quarter results.
The footwear retailer’s shares fell 8.70% in pre-market trading after the results.
The parent company of Journeys, Schuh, and Johnston & Murphy reported a second quarter adjusted loss of $1.14 per share, better than analysts’ expectations of a $1.25 loss. Revenue rose 4% to $546 million, exceeding the consensus estimate of $532.4 million, with comparable sales increasing 4% YoY.
Journeys, the company’s largest segment, led the performance with a 9% comparable sales increase, marking the fourth consecutive quarter of positive comparable sales growth for the company overall. Store sales rose 5% while e-commerce sales increased 1%.
"We are pleased to report another quarter that exceeded expectations and our fourth consecutive quarter of positive comparable sales growth," said Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer. "The momentum from the second half of last year has continued in Fiscal 2026 highlighted by Journeys high-single digit comp increase as our strategic plan to accelerate growth continues to gain traction."
Despite raising its full-year sales outlook to growth of 3-4% from previous guidance of 1-2%, Genesco maintained its adjusted earnings forecast of $1.30 to $1.70 per share. The company cited pressure on gross margins from higher tariffs and a "very promotional U.K. marketplace" as offsetting the benefits of increased sales.
Gross margin decreased 100 basis points to 45.8% compared to the same period last year, primarily due to increased promotional activity at Schuh and lower margins at Genesco Brands related to tariffs.
"With Journeys strong performance year-to-date, we are raising our full year revenue outlook," said Sandra Harris, Genesco’s Senior Vice President Finance and Chief Financial Officer. "The increased top-line and corresponding leverage are allowing us to offset additional pressure on gross margins from higher tariffs and a very promotional U.K. marketplace."
Inventory increased 11% YoY, reflecting higher levels at Journeys, Schuh and Johnston & Murphy. The company operated 1,253 stores at quarter-end, down 5% from 1,314 stores a year earlier.
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