Genesco Inc. reported fiscal second-quarter 2027 net sales of $530 million, down 3% from the prior year, as comparable sales fell 1% overall despite a 1% increase in store comps and a 6% decline in e-commerce.
The company’s Journeys brand, which accounts for 60% of total sales, extended its streak with an 8th consecutive quarter of positive comps, rising 2%. Johnston & Murphy grew 4% for a third straight quarter, while Schuh’s U.K. operations declined 9%. Adjusted earnings per share came to a loss of $0.83, narrower than analyst expectations for a $1.37 loss. Shares rose 2.21% to $34.26 after a premarket rally of over 10%.
Gross margins expanded on both GAAP and adjusted bases. GAAP gross margin increased 560 basis points to 51.4%, including $22.5 million in tariff refunds and related interest income. Adjusted gross margin rose 140 basis points to 47.2%. GAAP operating income totaled $3.6 million, an $18 million improvement from the prior year’s loss of $14.4 million, while the adjusted operating loss narrowed to $8.3 million from $14.3 million.
Operating expenses declined by $6 million year-over-year, with adjusted SG&A at 48.8% of sales, representing 40 basis points of deleverage. Journeys delivered 180 basis points of expense leverage. Total liquidity stood at $394 million, and capital expenditures reached $17 million, with 95% directed to store initiatives. The company completed 25 Journeys 4.0 remodels, bringing the total to 130, and ended the quarter with 1,186 locations after opening three stores and closing 25. Inventory rose 8% to $540 million.
For the full fiscal year 2027, Genesco raised its adjusted EPS guidance to the high end of its prior range of $2.00 to $2.40. Total sales are now projected to decline about 2%, revised from a previous outlook of flat to down 1%. Comparable sales are expected to be flat, down from earlier expectations of up 1% to 2%. Gross margin expansion is forecast at 60 to 80 basis points, up from the prior 50 to 60 basis points. Adjusted SG&A is expected to be roughly $15 million lower than the prior year, equating to 30 basis points of deleverage.
Operating income is projected at $34 million to $40 million, with the higher end considered the likely outcome. Segment outlooks include low-single-digit growth for Journeys, a low-double-digit decline for Schuh, mid-single-digit growth for Johnston & Murphy, and a $30 million sales reduction for Genesco Brands Group due to license exits. The company plans to open 95 new Journeys 4.0 stores and 10 new Johnston & Murphy locations in the second half of the year.
