Genesco Q3 Earnings Miss, Sales Rise on Higher Comparable Sales

Genesco Inc. GCO posted lower-than-expected numbers in third-quarter fiscal 2025. This retailer of branded footwear and accessories posted adjusted quarterly earnings of 79 cents per share that missed the Zacks Consensus Estimate of 87 cents. However, the bottom-line figure rose from 61 cents recorded in the year-earlier quarter.

This Zacks Rank #4 (Sell) stock has lost 26.2% in the past three months, lagging the industry’s 2.2% growth.

GCO’s Quarterly Performance

Net sales of the company inched up 3% to $616.2 million but came below the Zacks Consensus Estimate of $618 million. The year-over-year increase in the top line includes a 5% increase in same store sales, an increase in wholesale sales and favorable foreign exchange impacts, partly offset by the effects of net store closings and a 3% drop in e-commerce comparable sales. Sales were driven by an increase of 4% at Journeys, 2% at Schuh, 3% at Johnston & Murphy and a 3% increase at Genesco Brands. On a constant-currency basis, Schuh sales dipped 1% for the third quarter this year.

On a segmental basis, comps fell 2% each at the Schuh Group and Johnston & Murphy Group while the metric increased 6% at Journeys Group. Total Genesco comparable sales rose 3%.

Gross margin was 46.8%, down 100 basis point (bps) year over year as a percentage of sales, mainly owing to lower margins at Genesco Brands Group with respect to the tariff pressures and the exit of licenses, and elevated promotional activity at Schuh. This was partly offset by lower shipping and warehouse costs for Journeys and Schuh.

Selling and administrative expenses came in at 44.7%, down 140 bps as a percentage of sales, reflecting cost-savings efforts, including lower occupancy, freight and performance-based compensation expenses. Adjusted operating income of $12.9 million in the reported quarter, up 25.2% from $10.3 million recorded in the year-ago quarter.

Genesco’s Financial Snapshot

Genesco ended the quarter with approximately $27 million of cash, $69.8 million of long-term debt (excluding current maturities) and $513.8 million of shareholders’ equity. As of Nov. 1, 2025, inventories rose 6.7% $558.1 million, owing to higher inventory at Journeys, Schuh and Johnston & Murphy, somewhat offset by lower inventory at Genesco Brands.

During the fiscal third quarter, Genesco incurred $18 million as capital expenditures. For fiscal 2027, management anticipates capital expenditure in the band of $55–$65 million, which includes growth actions, including the Journeys 4.0 remodel program, other new and refreshed stores and digital investments. It opened four stores while closing 12 stores in the quarter. The company exited the quarter with 1,245 stores compared with 1,302 stores at the end of the year-earlier quarter.

Further, the company did not buy back shares during the reported quarter. It had $29.8 million left under its expanded share repurchase authorization.

What to Expect From GCO in Fiscal 2026?

For fiscal 2026, management projects sales and operating income growth compared with the last year. It now anticipates total sales to rise about 2% and comparable sales to grow around 3% from fiscal 2025. The outlook shows a decline from the prior guidance for total sales growth of 3-4% and comparable sales up 4-5%.

Genesco currently envisions adjusted earnings per share from continuing operations to be around 95 cents, down from the earlier expectation of $1.30-$1.70. This guidance predicts no further share repurchases and a tax rate of 34%, excluding the tax impact of OBBBA.

Eye These Solid Picks

We have highlighted three better-ranked stocks, namely Boot Barn BOOT, Abercombie ANF and Ulta Beauty ULTA. 

Boot Barn, a lifestyle retail chain devoted to western and work-related footwear, apparel and accessories, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 7.1%, on average. 

The Zacks Consensus Estimate for Boot Barn’s current financial-year sales and EPS indicates growth of 10.7% and 8.9%, respectively, from the year-ago figures.

Abercrombie, a leading casual apparel retailer, currently sports a Zacks Rank of 1. ANF delivered an earnings surprise of 28.9% in the last reported quarter. 

The Zacks Consensus Estimate for Abercrombie’s current financial-year sales indicates growth of 11.5% from the year-ago figure. 

Ulta Beauty, a lifestyle brand, currently has a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of 16.3%, on average.

The Zacks Consensus Estimate for ULTA’s current financial-year sales indicates growth of 6.8% from the year-ago figure.

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This article originally published on Zacks Investment Research (zacks.com).

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