World Footwear

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Genesco reports net sales decline

Jun 7, 2024 United States
Genesco reports net sales decline
As it continues to execute its strategic plan to turn around the Journeys business, the US-based company has reported a 5% year-on-year decline in net sales in the first quarter of its fiscal year
“Against continued headwinds in the operating environment, we executed our strategic plan to deliver top and bottom-line results that were ahead of our expectations, led by our Journeys business. With new Journeys leadership in place, I am encouraged by the traction we are seeing thus far, as we work to dramatically accelerate the improvement, elevate our product assortments and enhance the experience for our consumers. In the meantime, our efforts to reduce costs and optimize our store portfolio are resulting in a leaner, more productive operating model, which will provide a nice profit tailwind as our sales improve”, commented Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer.

First Quarter Results

In the first quarter of fiscal 2025 (ended on the 4th of May), the company’s net sales reached 458 million US dollars, reflecting a decrease of 5% on a comparable basis to the same period of last year; excluding the impact of lower foreign exchange rates, net sales decreased by 6%.

This performance was primarily driven by a decrease of 5% at Journeys to 259.4 million US dollars, a decrease of 1% at Schuh to 92.3 million US dollars, a decrease of 4% at Johnston & Murphy to 79.2 million US dollars and a decrease of 25% at Genesco Bands to 27.0 million US dollars, as compared to the first quarter of fiscal 2024.

Genesco’s gross margin remained stable at 47.3% in the first quarter. However, a strategic shift towards direct-to-consumer sales and reduced markdowns at Journeys led to a 30-basis point increase in the adjusted gross margin, on a comparable basis to a similar period of the previous year.

In the first three months of the current year, the company’s net loss widened to 24.3 million US dollars, or a loss of 2.23 US dollars per diluted share, compared to a net loss of 18.9 million US dollars, or a loss of 1.60 US dollars per diluted share, recorded in the same period last year.

During the first quarter, Genesco closed 17 Journeys stores and continues to evaluate up to 50 stores for the remainder of the year. The cost savings programme remains on track to deliver annualised run rate savings of 45 million to 50 million US dollars by the end of fiscal 2025.

Full Year Outlook

For fiscal 2025, the company continues to expect total sales to decline by between 2% and 3% year-on-year, or by between 1% and 2% excluding the 53rd week.


Image Credits: wem.ca


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