The Journeys turnaround was parent Genesco, Inc.’s number one priority as it started fiscal 2025 last February, and the division did not disappoint, closing out the year by posting 14 percent comp sales growth year-over-year in the fourth quarter.

“Our [overall] performance was driven by Journeys as the initial phase of our strategic plan to accelerate growth continued to gain traction, and Journeys’ performance far outpaced the overall market,” offered Genesco, Inc. Board Chair, President and CEO Mimi Vaughn. “These results underscore the team’s outstanding execution of our near-term initiative and the strong consumer positioning and resilience of the Journeys business.

“Like the fourth quarter, our annual performance was led by Journeys along with strength in digital, following a multiyear investment cycle in this channel and meaningful progress against several growth initiatives,” Vaughn continued.”

Vaughn characterized fiscal 2025 as a tale of two halves.

“Our focus in the first half was on the initial phase of Journeys’ strategic growth plan,” she explained. “We onboarded a new President, Andy Gray, and a new Chief Product Officer at the beginning of the year, who collectively brought strong merchant backgrounds, excellent vendor relationships and expertise in brand building and product innovation, adding to the strong team in place.”

Vaughn said this phase centered on injecting Journeys product assortment with more newness, excitement and storytelling to drive an inflection in the business comps.

“The team did an amazing job quickly, adding significant newness across several casual and athletic brands,” Vaughn noted. “Our key brand partners, very enthusiastic about Journeys unique teen customer proposition, stepped up with tremendous support of our strategic direction to better serve this customer with a spotlight on the teen girl through elevated assortments and depth.

“Fueled by improvement in the product offering and the visual reset of our stores, among other actions, comps improved sequentially from Q1 to Q2, turning positive in July,” continued Vaughn.

Vaughn said the company’s plan for the second half was to build on this strong product momentum, increasing its investment in the Journeys brand and elevating the customer experience to deliver improved results during the important back-to-school and holiday seasons.

Vaughn reminded the conference call participants that Genesco added “an exceptional marketing leader” as Journeys new CMO, further augmenting the brand’s leadership.

“After turning positive in July, Journeys comps accelerated, increasing double-digits in both Q3 and Q4, highlighting the immediate and meaningful impact this first set of changes has had on the business,” Vaughn detailed.

“In the fourth quarter specifically, increased allocations invested on key footwear brands and styles paid big dividends and fueled strong full-price selling throughout the holiday quarter, delivering double-digit comps both in stores and online. Positive traffic and meaningfully higher ASPs helped drive these results. Both casual and athletic brand sales were up, and after a couple of years of declines, the boot category leveled off,” continued Vaughn.

Vaughn said the company further leveraged the interaction between stores and online by accelerating buy online, pickup in-store (BOPIS) since implementing it a year ago to peak at almost 20 percent of Journeys online sales in December 2024.

Company CFO Sandra Harris walked through the consolidated top-line results to show how much Journeys meant to Genesco’s fourth quarter and year.

Consolidated Genesco, Inc. revenue was up roughly 1 percent to $746 million, with one less week of sales in the fourth quarter and fewer stores. Harris said the increase in revenue was attributable to total company comps up 10 percent with Stores up 6 percent and Direct comps up 18 percent, with all measures showing sequential quarterly improvement throughout the year.

All businesses delivered improved comps in the quarter, led by Journeys (+14 percent); J&M had flat comps despite traffic shortfalls, and Schuh comps, up 2 percent, driven by e-commerce and promotions.

The positive contribution from comps was partially offset by lower revenue due to closed stores and the impact of the 53rd week shift. For the year, the 53rd week negatively impacted sales by $25 million, whereas the effect on the fourth quarter was approximately $15 million higher due to the shift of key retail weeks between the quarters.

“We continued our store optimization efforts, ending the quarter with 63 net fewer stores versus a year ago, which was an increase over the 46 that we had previously anticipated,” Harris noted. “The closures overall represented 6 percent of the fleet, 5 percent of the square footage but only 2 percent of sales, and closing these stores was accretive to operating income. For many of these stores, we have also seen positive sales transfer rates that have helped offset any operating income/loss impact.”

The company has seen well above-average performance in comp, traffic, conversion, and transaction size for the 16 new 4.0 Journeys remodels, which have been open since they started the program in October 2024.

“We positioned the business for better productivity and profitability, with 64 Journeys store closures as we reshape our footprint to align with the shopping patterns of today’s consumer,” added Vaughn.

“We will continue to optimize the fleet to better support the consumers’ preference to shop both in-store and online and to enhance and improve the in-store experience across our fleet,” the CFO committed.

“In addition to the four-wall savings related to rightsizing the fleet, we have achieved the higher end of our target run rate range of $45 million to $50 million of total expense savings before reinvestment through the cost reduction program that began in fiscal 2024. The savings were from reduced rent, optimizing warehouse freight and logistics costs and labor and other procurement efficiencies,” Vaughn continued.

Outlook
“We’re excited about our momentum in the back half of fiscal 2025 and look forward to continuing to build upon that in fiscal 2026 as we transition during this year toward investing for growth with a main focus on Journeys,” Harris offered. “While reducing costs will continue to be important as we rebuild operating income, we must drive the top line to reverse the deleverage on our largely fixed expense base in recent years.

In this transition year, the bottom line grows more than the top line as store optimization and closures offset positive comps.”

Genesco expects overall comp sales for fiscal 2026 to be up 2 percent to 4 percent, driven by Journeys, with total comps higher in the front half of the year as Journeys anniversaries negative comps in fiscal 2025. The CFO said the company is being more conservative about comps in the other businesses.

“This comp growth is offset by roughly $30 million from the impact of net store closures and approximately $14 million from a weaker pound sterling, leading to total sales growth of flat to up 1 percent,” she said. “We do expect first quarter comps to be at the higher end of our annual range due to the easier comparison to last year.”

The company expects total year-end sales compared to last year to increase in low-single-digits for Journeys.

For gross margin, GCO expects the year to be down 20 basis points to 30 basis points on a consolidated basis. Harris said lower margins are the driver of this at Genesco Brands as the company clears inventory related to the exit of licenses, product mix at Journeys and channel mix at Johnston & Murphy, partially offset by improvement at Schuh after a year of heightened promotional activity.

“We do expect more pressure on gross margins in the first quarter, almost double as compared to the remainder of the year largely due to product mix shift at Journeys,” Harris noted.

Regarding tariffs, Harris said that the company estimates that only about 15 percent or less of its fiscal 2026 cost of goods sold will be exposed to China, and the gross margin outlook includes and incorporates the higher tariffs currently in place for China and elsewhere.

Genesco expects a total capital spend of between $50 million and $65 million, led by investments in store remodels to fuel Journeys’ growth, of which it is planning approximately 70 remodels, or 7 percent of the Journeys’ fleet.

Image courtesy Genesco, Inc./Journeys