Genesco Inc., the parent of teen and kids oriented Journeys Group, UK-based footwear retailer Schuh Group, dress and casual brand and retailer Johnston & Murphy, along with a range of other brands under the Genesco Brands Group umbrella, reported a slightly wider loss in the fiscal 2027 first quarter on an adjusted basis. Still, the company and key executive said results for the period “strongly exceeded plan,” prompting the footwear retailer and footwear brand consolidator raised its earnings guidance for the the full fiscal year ended January 30, 2027.

Vaughn said the fiscal first quarter marked Genesco’s seventh consecutive quarter of positive comparable sales with sales, gross margin and expense leverage all exceeding expectations.

“The consumer environment is unchanged from what we’ve described over the past year,” said Vaughn. “Selective and intentional, customers shop with purpose during key events and pull back in between. When they engage, they’re looking for must-have product and newness and when we deliver what they want, they’re willing to pay up for it. This pattern has become the new normal and we navigate it effectively.”

Comparable sales increased 2 percent as gains of 5 percent at Journeys and 7 percent at Johnston & Murphy offset a tumble of 9 percent at U.K.-based Schuh.

Profitability & Expenses
Gross margins reached 47.0 percent of sales in the fiscal first quarter, up 30 basis points year-over-year, said to be due primarily to efficiencies in shipping and warehouse costs and less promotional activity across businesses, partially offset by changes in brand mix at Journeys and Schuh.

SG&A expenses were reduced to 52.2 percent of sales compared to 52.5 percent last year. Adjusted selling and administrative expenses of 51.9 percent improved 60 basis points as a percent of sales, primarily reflecting decreased selling salaries, occupancy, freight and warehouse expenses as well as ongoing cost savings initiatives, partially offset by increased performance-based incentive compensation expenses and investments in marketing.

Genesco’s GAAP operating loss for the quarter was $15.4 million, compared with a loss of $28.1 million in Q1 last year. Adjusted to exclude non-recurring items, the operating loss for the first quarter was reduced to $23.9 million from $27.9 million in Q1 last year.

The effective tax rate for the first quarter was 6.8 percent in fiscal 2027 compared to 28.5 percent in the first quarter last year. The adjusted tax rate was 6.9 percent in fiscal 2027 compared to 26.7 percent in the first quarter last year. The tax rate reflects the impact of the valuation allowance in certain jurisdictions, combined with the income tax law changes from the One Big Beautiful Bill Act (“OBBBA”).

GAAP loss was $14.8 million in the quarter compared to a loss of $21.2 million in the first quarter of last year. Adjusted loss totaled $22.7 million, or $2.18 per share, compared to a loss of $21.5 million, or $2.05 per share, in the first quarter last year.

Schuh’s Sales Drop Tied to Steps to Reduce Promotions
At Schuh, the 9 percent same-store decline was intentional and reflects a decision to pull back on promotions and prioritize a more full-price selling model. Vaughn said the strategy resulted in higher average transaction size but as expected, pressured store traffic in an already-weak UK consumer market. E-commerce also saw lower traffic due to reduced promotions.

Schuh’s overall sales declined 5.4 percent to $90.7 million. The operating loss spread to $7.0 million from $6.1 million a year ago.

On the positive side, Schuh is seeing improvement in product elevation with brand access and depth in brands like Adidas, Nike and Asics and expects additional progress with its move in late 2025 to be consolidated under Journeys Global Retail Group.

“Our work also includes tightening expenses and closing unprofitable stores and we closed five stores in the first quarter,” said Vaughn. “We anticipate the shoe turnaround will take longer than Journeys due to the tougher UK consumer environment right now and the need to pull back from promotional activity. But with sharpened customer positioning, we see the same opportunity to serve the style-led youth girl that we saw at Journeys. We also see bigger growth opportunities for these businesses together in the future with their shared brand relationships. We put out a tactical plan for Schuh in Q4 and in time we are confident our approach will deliver improved results.”

Johnston and Murphy Benefits from Dress-Up Trend
The 7 percent comp gain at Johnston and Murphy compared to a 2 percent decline in the 2025 first quarter and reflects successful pricing strategies that drove higher full price selling and fewer markdowns as well as efforts to increase brand awareness, including a campaign featuring Peyton Manning.

Said Vaughn, “While apparel has been a standout for some time, especially blazers and knits, this quarter we also saw nice growth in footwear. We’ve been working diligently to accelerate our product innovation and we’re seeing strong consumer response to our updated designs and new footwear concepts like the Ackerson and Tyson collections. We’re also benefiting from a new trend shift toward more refined and tailored dressing, especially as people want to look good at the office, which is right in J&M’s wheelhouse.”

Johnston and Murphy’s sales improved 5.8 percent to $81.3 million. Operating earnings nearly doubled to $1.16 million from $698,000 a year ago.

Genesco Brands Group Sees Slight Increase in Sales
Genesco Brands Group, its wholesale segment, generated sales in the quarter of $29.7 million compared to $28.6 million a year ago. The business completed the wind-down of its Levi’s footwear license and is prepping to launch a licensed Wrangler footwear range this fall. Vaughn said the Wrangler business “positions us for healthy growth going forward.”

The segment also includes the licensed Dockers footwear line, which saw sales and profits ahead of last year and ahead of plan.

Tariff Refunds
The company is expecting refunds under the International Emergency Economic Powers Act of approximately $23 to $25 million related to its branded businesses, for which it has already applied but which are not included in the financials this quarter. In addition, the tariff refunds are not included in the company’s guidance for the remainder of the year.

Cash, Borrowings and Inventory
Cash as of May 2, 2026, was $27.1 million, compared with $21.7 million as of May 3, 2025. Total debt at the end of the first quarter of fiscal 2027 was $45.3 million compared with $121.0 million at the end of last year’s first quarter. Inventories increased 6 percent on a year-over-year basis primarily reflecting increased inventory for Journeys, partially offset by decreased inventory at Genesco Brands.

Capital Expenditures and Store Activity
For the first quarter this year, capital expenditures were $15 million, related primarily to retail stores. Depreciation and amortization was $13 million. During the quarter, the company opened two stores and closed 30 stores. The company ended the quarter with 1,208 stores compared with 1,256 stores at the end of the first quarter last year, or a decrease of 4 percent. Square footage was down 4 percent on a year-over-year basis.

Share Repurchases
The company did not repurchase any shares during the first quarter of fiscal 2027. The company currently has $29.8 million remaining on its expanded share repurchase authorization announced in June 2023, after repurchasing 604,531 shares during fiscal 2026. The company continues to view share repurchases as an important component of its balanced capital allocation strategy and is committed to deploying excess capital.

Fiscal 2027 Outlook
Vaughn concluded, “We have clear plans in place to drive continued improvement in fiscal 2027. Our top-line guidance reflects another year of overall positive comparable sales growth, offset by store closures and license transitions in our branded footwear group. The projected increase in our bottom line is being driven by another year of increased profitability at Journeys and improvement at Johnston & Murphy. We also expect higher gross margins, primarily at Schuh, as we reduce the business’ dependency on promotions and focus on returning to a full price, full margin sales model.”

For fiscal 2027, the company:

Raises expectations for adjusted diluted earnings per share from continuing operations to a range of $2.00 to $2.402, with the middle of the range the most likely outcome, as a result of the better-than-expected start to fiscal 2027, versus the previous range of $1.90 to $2.30 per share, Genesco, Inc.:

  • Continues to expect positive comparable sales of 1 percent to 2 percent;
  • Continues to expect total sales to be down 1 percent to flat compared to fiscal 2026, reflecting the impact of store closures and license exits; and
  • Guidance assumes no further share repurchases and a tax rate of 30 percent for fiscal 2027 but due to the valuation allowance, the tax rate for the second and third quarters of the year will be in the range of approximately 7 percent to 8 percent.

Image courtesy Schuh Group / Genesco, Inc.

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