Genesco, Inc. reported fourth-quarter results that handily topped initial expectations as its flagship Journeys banner delivered a 12 percent same-store hike on top of 14 percent growth the prior year. The teen girls’ chain has benefited from a focus on adding more premium products, including new brands such as Nike, Hoka, and Saucony over the last year.
“We delivered a strong finish to fiscal 2026 with fourth quarter results that exceeded our expectations and reflected outstanding execution during the most important shopping period of the year,” said Mimi Vaughn, president and chief executive officer, on an analyst call. “We exit the year with clear momentum as we head into fiscal 2027.”
Fourth-Quarter Results Top Expectations
In the quarter ended January 31, companywide sales increased 7 percent, to $800 million. Comparable sales increased 9 percent. Store comps were up 9 percent, and e-commerce was up 8 percent. E-commerce sales accounted for 31 percent of total sales, up from 30 percent last year.
Vaughn said, “Stores were especially strong, propelled by exceptional conversion over holiday and higher transaction size, while digital reaccelerated, especially during peak weeks. This balanced performance across channels reinforces the strength of our multi-channel model, especially in high-volume periods.”
On a reported basis, GAAP earnings were $47.5 million, or $4.43 a share, in the quarter compared to $33.6 million, or $3.06, in the fourth quarter last year. Adjusted to exclude non-recurring items in both periods, earnings from continuing operations improved 12.3 percent to $40.2 million, or $3.74.
For the year, sales rose 5 percent to $2.4 billion, well above the 2 percent gain called for in third-quarter guidance. Genesco had upwardly revised its EPS guidance on January 12, after reporting strong holiday sales. Comparable sales for the year grew 6 percent compared with initial guidance prior to holiday selling of about 3 percent growth.
On an adjusted basis, earnings in the year jumped 49.5 percent to $15.4 million, or $1.45 per share. When it reported third-quarter results on December 4, Genesco provided full-year guidance calling for adjusted earnings of 95 cents.
Journeys Q4 Boosted By Casual And Boot Offerings
At Journeys Group, sales in the quarter climbed 10.2 percent to $527.1 million. Operating profits vaulted 39.5 percent to $60.2 million. In the year, Journeys’ sales gained 6.8 percent to $1.49 billion; operating profits surged 129.6 percent to $60.5 million.
“The transformation and strategic growth work we have been executing over the past two years—elevating the assortment, leaning into our sharp point on the style-led teen girl, building our brand, improving the experience, and rolling out 4.0 stores—continues to translate into sustained comp growth and meaningful profit improvement with double-digit comp gains in Q4 this year on top of double-digit gains last year,” said Vaughn.
She said the holiday performance at Journeys was driven by strength in both casual and athletic lifestyle footwear. Vaughn added, “Casual and boots saw a notable lift and really drove the business, particularly within key brands and franchises. At the same time, we continued to build athletics as a year-round category for our customers, and that strength added to the quarter.”
Journeys’ profitability in the quarter was supported by “strong full-price selling” and higher average selling prices. Vaughn added, “What is most exciting is we grew total customers in December and January and continued to achieve market share gains. Journeys’ performance far outpaced the overall footwear market as Journeys gains important traction with the larger youth customer base we are targeting, especially the teen girl.”
Vaughn added that Journeys’ 4.0 concept stores have been delivering “25 percent-plus” gains versus the rest of the chain, driven by higher traffic and improved productivity. Vaughn said, “These stores not only elevate the experience but reinforce our authority across brands and categories. We now have more than 84 4.0 locations, and they are increasingly meaningful drivers of performance. In addition, I want to give a shout-out to all our Journeys store teams across the store footprint who did an absolutely amazing job and delivered fantastic conversion during the holiday this year.”
Schuh Dragged Down By Heavy Promotions
U.K.-based Schuh Group’s sales grew 8.9 percent in the quarter to $153.7 million. Same-store sales grew 3 percent against a 2 percent increase a year ago. Operating earnings in the quarter were down slightly, to $6.47 million from $6.55 million.
For the year, Schuh’s sales grew 4 percent and were flat on a currency-neutral basis.
Vaughn said of Schuh, “The U.K. retail environment remained highly competitive, ending in a lackluster holiday season, especially for discretionary categories. While many of the brands driving Journeys’ growth also resonated at Schuh, greater price sensitivity had the U.K. consumer looking for bargains. With the goal of exiting the year in a clean inventory position, the team navigated the season, driving positive comps at the expense of gross margin, with promotional activity taking a toll on profitability for the quarter.”
She added that Schuh’s goal for the current year is to improve store productivity. She added, “Taking a broader view, we see a similar consumer opportunity to Journeys in the U.K. but are clear-eyed about the work ahead at Schuh.”
Among its other segments, Johnston & Murphy’s sales improved 2.1 percent to $93.4 million; operating earnings were down slightly to $6.47 million from $6.56 million. Johnston & Murphy’s sales were flat for the year.
Vaughn said Johnston & Murphy benefited from strength in apparel and accessories, a new partnership with Peyton Manning, and return-to-office mandates. She said, “Promisingly, this momentum has increased further into the first quarter with greater return to work and more interest in dressing up.”
At Genesco Brands Group, its licensed footwear business, sales in the quarter declined to $25.7 million from $35.2 million, reflecting the end of its Levi’s footwear license. The segment reported a loss of $1.96 million, compared with operating earnings of $1.39 million. Genesco is launching the Wrangler footwear brand under a license this fall.
Next Steps in “Footwear First” Strategy
Vaughn revealed plans to further evolve its “Footwear First” strategy across its businesses.
Journeys will seek to build on the progress made this year in positioning the business as a “destination for the style-led teen,” especially the teen girl. Vaughn said, “No other concept goes across athletic, casual, and canvas footwear. This is how Journeys is differentiated and represents the white space we found to build on its strengths to serve a wider teen audience interested in style and trend that is six to seven times larger than the market we have traditionally served and who is underserved in the mall today.”
Initiatives to further that positioning include focusing on bringing in a “more premium, more elevated assortment,” including expanding the number of iconic franchises across categories such as lifestyle running, casual, low-profile, and sandals. She said, “Growth will come from trend leadership and newness from these categories, growth from the new brands we introduced last year, and growth from new models from existing in-demand brands.”
Journeys will also focus on expanding awareness “with this broader teen audience” through its Life on Loud campaign on social media and a bigger media spend planned for back-to-school and holiday selling. Journeys will look to build on successful activations this year, including one around its Nike launch in November as well as a customization tour with Ugg. Finally, Journeys will double the number of stores for its 4.0 concept and upgrade its online search capabilities with AI tools.
At Schuh, oversight for the U.K.-based chain was moved late last year to Journeys Retail Group, led by Andy Gray, with this year’s focus on “reducing Schuh’s reliance on discounting.” Vaughn said Schuh will leverage Journeys’ buying team, led by Chris Santaella, to improve content quality. Vaughn added, “This reset will take some time, but our aim is to get back to full-price selling of must-have product.”
At Johnston & Murphy, a focus in 2026 includes increasing new introductions by 30 percent to bring more freshness to assortments. At Genesco Brands, the Wrangler brand is on track for a fall launch, initially focused on Western and farm & ranch distribution.
“We see meaningful earnings opportunity to unlock in each of our strategically well-positioned businesses, but we must evolve our concepts to meet the needs of the customer, which have rapidly changed in recent years,” said Vaughn. “Journeys has been our number one priority, and we have demonstrated real success unlocking much greater profitability. With Journeys on its way, we intensify our attention to our other businesses with Schuh at the top of the list.”
She concluded, “Importantly, we enter the year in a strong position to achieve this overarching goal, thanks to clean inventories and initiatives in place to drive the improvement,” said Vaughn. “Indeed, Q1 is off to a good start in North America, even with the February weather disruption. The year reinforced a critical lesson: the right product, the right brand positioning, the right experience in stores and online – all of these matter. And when we get these aligned, we win, enabling us to take another meaningful step forward in fiscal 2027.”
Fiscal 2027 Outlook
The company expects the following for for Fiscal 2027:
- Positive comparable sales of 1 percent to 2 percent.
- Total sales to be down 1 percent to flat compared to Fiscal 2026, including a reduction in sales of approximately $30 million net due to the exit of licenses and approximately $30 million related to net store closures.
- Adjusted diluted earnings per share from continuing operations in the range of $1.90 to $2.30.
- 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 first three quarters of the year will be in the range of roughly 7 percent to 8 percent.
Image courtesy Journeys
