Genesco Raises Profit Target for Fiscal Year 2027 Despite Revenue Decline
For the second quarter ended August 1, 2026, Genesco reported a 3% drop in net sales to $530 million. The decline was attributed to store closures, reduced licensed sales, fewer online discounts at Schuh, and negative currency effects. However, two of its key brands—Johnston & Murphy and Journeys—posted sales increases of 5% and 2%, respectively. Despite the revenue slump, Genesco improved adjusted gross margin from 45.8% to 47.2%. This was driven by reduced promotional activity and a stronger focus on full-price selling at Schuh. The company also received $22.5 million in tariff refunds during the quarter (excluded from adjusted earnings) and narrowed its operating loss significantly compared to last year. Genesco raised its FY27 profit guidance, projecting operating income toward the upper end of a revised range ($34m–$40m), despite forecasting total sales will decline by about 2%. The company cited strategic actions like store closures as contributing factors and expressed confidence in future growth.
Tickers: $GCO
Topics: profitability retail sales performance