Genesco Reports Improved Q2 Earnings Amid Sales Decline
Genesco Inc. (NYSE: GCO) reported improved second-quarter fiscal 2027 earnings despite a decline in revenue, driven by gross margin expansion and disciplined expense management. Revenue fell to $530 million from the prior year, with consolidated comparable sales down 1%. However, adjusted gross margin increased significantly to 47.2%, up 140 basis points, while operating loss narrowed to $8 million compared to $14 million a year ago. Journeys continued as Genesco's growth engine, posting its eighth consecutive quarter of positive comparable sales with an increase of 2%. The company also raised its target for Journeys' store openings under the 4.0 format from 75 to 95 stores in fiscal 2027. Looking ahead, Genesco expects flat comparable sales and a total-sales decline but anticipates adjusted EPS toward the high end of $2.00–$2.40 with operating income between $34 million and $40 million. Store closures were part of strategic fleet optimization efforts that have been accretive to operating income, while Schuh's reduced promotional activity contributed to lower e-commerce sales growth.
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