Robert J. Dennis, Genesco Chairman, President and Chief Executive Officer, commented: "We delivered second quarter consolidated results that exceeded expectations across the board. Our outperformance was driven primarily by the ongoing strength of our Journeys business, which continued to experience strong comparable sales even as year-over-year comparisons became more difficult. The second quarter marked the ninth consecutive quarter of positive consolidated comparable sales for our footwear businesses and included positive store and digital comps. At the same time, gross margins improved at each of our divisions, helping offset incremental marketing investments to achieve operating profit and earnings per share well above last year's levels. The top-line momentum we experienced in the second quarter continued nicely in August with Journeys and Schuh leading the way during the important back-to-school selling season (...) Our recent performance represents a great start to our first fiscal year as a footwear-focused company and we believe that the strategic course we have set for Genesco will result in improved profitability and increased shareholder value over the long-term."

Second Quarter Review

Net sales for the second quarter of Fiscal 2020 were flat at 487 million US dollars compared to the second quarter of Fiscal 2019. Excluding the effect of lower exchange rates, net sales would have increased by 1%. Comparable sales increased by 3%, with stores up by 1% and direct up by 20%. Direct-to-consumer sales were 10.4% of total retail sales for the quarter, compared to 8.9% last year.

Second quarter gross margin this year was 48.6%, up 110 basis points, compared with 47.5% last year. The increase as a percentage of sales reflects freight claim credits for Journeys Group, improved wholesale gross margin in Johnston & Murphy Group and efficient sell through of sale product at Schuh Group with lower markdowns.

Fiscal 2020 Outlook

For Fiscal 2020, Genesco now expects comparable sales to be up 2% to 3%.