GENESCO INC

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Summary of Significant Accounting Policies

Nature of Operations

Genesco Inc. and its subsidiaries business includes the sourcing and design, marketing and distribution of footwear, apparel and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys®, Journeys Kidz®, Little Burgundy® and Johnston & Murphy® banners and under the Schuh banner in the U.K. and the ROI; through catalogs and e-commerce websites including the following: journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, littleburgundyshoes.com, johnstonmurphy.com, johnstonmurphy.ca, nashvilleshoewarehouse.com and dockersshoes.com and at wholesale, primarily under our Johnston & Murphy brand, the licensed Dockers® brand, the licensed Levi's® brand, the licensed G.H. Bass® brand and other brands that we license for footwear. At February 3, 2024, we operated 1,341 retail stores in the U.S., Puerto Rico, Canada, the U.K. and the ROI.

During Fiscal 2024, we operated four reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz and Little Burgundy retail footwear chains and e-commerce operations; (ii) Schuh Group, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, e-commerce operations and wholesale distribution of products under the Johnston & Murphy brand; and (iv) Genesco Brands Group, comprised of the licensed Dockers, Levi's, and G.H. Bass brands, as well as other brands we license for footwear.

Principles of Consolidation

All subsidiaries are consolidated in our Consolidated Financial Statements. All significant intercompany transactions and accounts have been eliminated.

Fiscal Year

Our fiscal year ends on the Saturday closest to January 31. This reporting schedule is followed by many national retail companies and typically results in a 52-week fiscal year, but occasionally will contain an additional week resulting in a 53-week fiscal year. The periods presented in these financial statements each consisted of 52 weeks, except for Fiscal 2024, which consisted of 53 weeks. Fiscal 2024 ended on February 3, 2024, Fiscal 2023 ended on January 28, 2023 and Fiscal 2022 ended on January 29, 2022.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash

Our foreign subsidiaries held cash of approximately$23.2 million and$35.9 million as of February 3, 2024 and January 28, 2023, respectively, which is included in cash on the Consolidated Balance Sheets. Based upon evaluation of our worldwide operations and specific plans to remit foreign earnings back to the U.S., we can no longer assert that earnings from certain

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foreign operations will be indefinitely reinvested and have recorded U.S. taxes in accordance with applicable U.S. tax rules and regulations.

The majority of payments due from banks for customer credit cards are classified as cash, as they generally settle within 24-48 hours.

At February 3, 2024 and January 28, 2023, outstanding checks drawn on zero-balance accounts at certain domestic banks exceeded book cash balances at those banks by approximately$3.3 million and$6.0 million, respectively. These amounts are included in accounts payable in our Consolidated Balance Sheets.

Concentration of Credit Risk and Allowances on Accounts Receivable

Our wholesale businesses sell primarily to independent retailers and department stores across the United States. Receivables arising from these sales are not collateralized. Customer credit risk is affected by conditions or occurrences within the economy and the retail industry as well as by customer specific factors. In the wholesale businesses, one customer accounted for 18%, one customer accounted for 16%, one customer accounted for 11% andone customer accounted for 10% of our total trade receivables balance, whileno other customer accounted for more than 8% of our total trade receivables balance as of February 3, 2024.

We establish an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information, as well as customer specific factors. We also establish allowances for sales returns, customer deductions and co-op advertising based on specific circumstances, historical trends and projected probable outcomes.

Inventory Valuation

In our footwear wholesale operations and our Schuh Group segment, cost for inventory that we own is determined using the first-in, first-out ("FIFO") method. Net realizable value is determined using a system of analysis which evaluates inventory at the stock number level based on factors such as inventory turn, average selling price, inventory level, and selling prices reflected in future orders for footwear wholesale. We provide a valuation allowance when the inventory has not been marked down to net realizable value based on current selling prices or when the inventory is not turning and is not expected to turn at satisfactory levels.

In our retail operations, other than the Schuh Group segment, we employ the retail inventory method, applying average cost-to-retail ratios to the retail value of inventories. Under the retail inventory method, valuing inventory at the lower of cost or market is achieved as markdowns are taken or accrued as a reduction of the retail value of inventories.

Inherent in the retail inventory method are subjective judgments and estimates, including merchandise mark-on, markups, markdowns and shrinkage. These judgments and estimates, coupled with the fact that the retail inventory method is an averaging process, could produce a range of cost figures. To reduce the risk of inaccuracy and to ensure consistent presentation, we employ the retail inventory method in multiple subclasses of inventory with similar gross margins, and analyze markdown requirements at the stock number level based on factors such as inventory turn, average selling price and inventory age. In addition, we accrue markdowns as necessary. These additional markdown accruals reflect all of the above factors as well as

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current agreements to return products to vendors and vendor agreements to provide markdown support. In addition to markdown allowances, we maintain reserves for shrinkage and damaged goods based on historical rates.

Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends and overall economic conditions. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value.

Property and Equipment

Property and equipment are recorded at cost and depreciated or amortized over the estimated useful life of related assets. Depreciation and amortization expense are computed principally by the straight-line method over the following estimated useful lives:

Depreciation expense related to property and equipment was approximately$48.9 million,$42.3 million and$42.4 million for Fiscal 2024, 2023 and 2022, respectively.

Leases

We recognize lease assets and corresponding lease liabilities for all operating leases on the Consolidated Balance Sheets as described under ASC 842. We evaluate renewal options and break options at lease inception and on an ongoing basis and include renewal options and break options that we are reasonably certain to exercise in our expected lease terms for calculations of the right-of-use assets and liabilities. Approximately 3% of our leases contain renewal options. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. As most of our leases do not provide a determinable implicit rate, we estimate our collateralized incremental borrowing rate based upon a synthetic credit rating and yield curve analysis at the lease commencement or modification date in determining the present value of lease payments. For lease payments in foreign currencies, the incremental borrowing rate is adjusted to be reflective of the risk associated with the respective currency. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment, if any, of operating lease assets. We test right-of-use assets for impairment in the same manner as long-lived assets.

Net lease costs are included within selling and administrative expenses on the Consolidated Statements of Operations.

Asset Retirement Obligations

An asset retirement obligation represents a legal obligation associated with the retirement of a tangible long-lived asset that is incurred upon the acquisition, construction, development, or normal operation of that long-lived asset. Our asset retirement obligations are primarily associated with leasehold improvements that we are contractually obligated to remove at the end of a lease to comply with the lease agreement. We recognize asset retirement obligations at the inception of a lease with such

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conditions if a reasonable estimate of fair value can be made. Asset retirement obligations are recorded in other long-term liabilities in our Consolidated Balance Sheets and are subsequently adjusted for changes in estimated asset retirement obligations. The associated estimated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset and depreciated over its useful life.

Our Consolidated Balance Sheets include asset retirement obligations related to leases of$11.0 million and$10.8 million as of February 3, 2024 and January 28, 2023, respectively.

Impairment of Long-Lived Assets

We periodically assess the realizability of our long-lived assets, other than goodwill, and evaluate such assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Asset impairment is determined to exist if estimated future cash flows, undiscounted and without interest charges, are less than the carrying amount. Inherent in the analysis of impairment are subjective judgments about future cash flows. Failure to make appropriate conclusions regarding these judgments may result in an overstatement or understatement of the value of long-lived assets.

We annually assess our goodwill and indefinite lived trade names for impairment and on an interim basis if indicators of impairment are present. Our annual assessment date of goodwill and indefinite lived trade names is the first day of the fourth quarter.

In accordance with ASC 350, we have the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If, after such assessment, we conclude that the asset is not impaired, no further action is required. However, if we conclude otherwise, we are required to determine the fair value of the asset using a quantitative impairment test. The quantitative impairment test for goodwill compares the fair value of each reporting unit with the carrying value of the reporting unit with which the goodwill is associated. If the fair value of the reporting unit is less than the carrying value of the reporting unit, an impairment charge would be recorded for the amount, if any, in which the carrying value exceeds the reporting unit's fair value. We estimate fair value using the best information available, and compute the fair value derived by a combination of the market and income approach. The market approach is based on observed market data of comparable companies to determine fair value. The income approach utilizes a projection of a reporting unit’s estimated operating results and cash flows that are discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in our fair value estimate is the weighted average cost of capital utilized for discounting our cash flow projections in our income approach. The projection uses our best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements.

Fair Value

The Fair Value Measurements and Disclosures Topic of the Codification defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosures about fair value measurements. This Topic defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between

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market participants on the measurement date. It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Revenue Recognition

Revenue is recognized upon satisfaction of all contractual performance obligations and transfer of control to the customer. Revenue is measured as the amount of consideration we expect to be entitled to in exchange for corresponding goods. The majority of our sales are single performance obligation arrangements for retail sale transactions for which the transaction price is equivalent to the stated price of the product, net of any stated discounts applicable at a point in time. Each sales transaction results in an implicit contract with the customer to deliver a product at the point of sale. Revenue from retail sales is recognized at the point of sale, is net of estimated returns, and excludes sales and value added taxes. Revenue from catalog and internet sales is recognized at estimated time of delivery to the customer, is net of estimated returns, and excludes sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Actual amounts of markdowns have not differed materially from estimates. Shipping and handling costs charged to customers are included in net sales. We exclude sales and value added tax collected on behalf of third parties from transaction price.

A provision for estimated returns is provided through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Estimated returns are based on historical returns and claims. Actual returns and claims in any future period may differ from historical experience. Revenue from gift cards is deferred and recognized upon the redemption of the cards. These cards have no expiration date. Income from unredeemed cards is recognized on the Consolidated Statements of Operations within net sales in proportion to the pattern of rights exercised by the customer in future periods. We perform an evaluation of historical redemption patterns from the date of original issuance to estimate future period redemption activity.

Our Consolidated Balance Sheets include an accrued liability for gift cards of$5.6 million and$6.0 million as of February 3, 2024 and January 28, 2023, respectively. Gift card breakage recognized as revenue was$1.1 million,$1.0 million and$1.0 million for Fiscal 2024, 2023 and 2022, respectively. During Fiscal 2024, we recognized$3.7 million of gift card redemptions and gift card breakage revenue that were included in the gift card liability as of January 28, 2023.

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Cost of Sales

For our retail operations, the cost of sales includes actual product cost, the cost of transportation to our warehouses from suppliers, the cost of transportation from our warehouses to the stores and the cost of transportation from our warehouses to the customer. Additionally, the cost of our distribution facilities allocated to our retail operations is included in cost of sales.

For our wholesale operations, the cost of sales includes the actual product cost and the cost of transportation to the Company’s warehouses from suppliers.

Selling and Administrative Expenses

Selling and administrative expenses include all operating costs excluding (i) those related to the transportation of products from the supplier to the warehouse, (ii) for our retail operations, those related to the transportation of products from the warehouse to the store and from the warehouse to the customer and (iii) costs of our distribution facilities which are allocated to our retail operations. Wholesale costs of distribution are included in selling and administrative expenses on our Consolidated Statements of Operations in the amounts of$12.1 million,$12.4 million and$12.8 million for Fiscal 2024, 2023 and 2022, respectively.

We record buying, merchandising and occupancy costs in selling and administrative expense. Because we do not include these costs in cost of sales, our gross margin may not be comparable to other retailers that include these costs in the calculation of gross margin. Retail occupancy costs recorded in selling and administrative expense were$309.8 million,$307.5 million and$299.6 million for Fiscal 2024, 2023 and 2022, respectively.

Shipping and Handling Costs

Shipping and handling costs related to inventory purchased from suppliers are included in the cost of inventory and are charged to cost of sales in the period that the inventory is sold. All other shipping and handling costs are charged to cost of sales in the period incurred except for wholesale costs of distribution and shipping costs for product shipped from stores, which are included in selling and administrative expenses in our Consolidated Statements of Operations.

Advertising Costs

Advertising costs are predominantly expensed as incurred. Advertising costs were$124.7 million,$118.5 million and$106.4 million for Fiscal 2024, 2023 and 2022, respectively.

Consideration to Resellers

In our wholesale businesses, we do not have any written buy-down programs with retailers, but we have provided certain retailers with markdown allowances for obsolete and slow-moving products that are in the retailer’s inventory. We estimate these allowances and provide for them as reductions to revenues at the time revenues are recorded. Markdowns are negotiated with retailers and changes are made to the estimates as agreements are reached. Actual amounts for markdowns have not differed materially from estimates.

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Cooperative Advertising

Cooperative advertising funds are made available to most of our wholesale footwear customers. In order for retailers to receive reimbursement under such programs, the retailer must meet specified advertising guidelines and provide appropriate documentation of expenses to be reimbursed. Our cooperative advertising agreements require that wholesale customers present documentation or other evidence of specific advertisements or display materials used for our products by submitting the actual print advertisements presented in catalogs, newspaper inserts or other advertising circulars, or by permitting physical inspection of displays. Additionally, our cooperative advertising agreements require that the amount of reimbursement requested for such advertising or materials be supported by invoices or other evidence of the actual costs incurred by the retailer.

Vendor Allowances

From time to time, we negotiate allowances from our vendors for markdowns taken or expected to be taken. These markdowns are typically negotiated on specific merchandise and for specific amounts. These specific allowances are recognized as a reduction in cost of sales in the period in which the markdowns are taken. Markdown allowances not attached to specific inventory on hand or already sold are applied to concurrent or future purchases from each respective vendor.

We receive support from some of our vendors in the form of reimbursements for cooperative advertising and catalog costs for the launch and promotion of certain products. The reimbursements are agreed upon with vendors and represent specific, incremental, identifiable costs incurred by us to sell the vendor’s specific products. Such costs and the related reimbursements are accumulated and monitored on an individual vendor basis, pursuant to the respective cooperative advertising agreements with vendors. Such cooperative advertising reimbursements are recorded as a reduction of selling and administrative expenses in the same period in which the associated expense is incurred. If the amount of cash consideration received exceeds the costs being reimbursed, such excess amount would be recorded as a reduction of cost of sales.

Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were$13.1 million,$16.3 million and$10.7 million for Fiscal 2024, 2023 and 2022, respectively. During Fiscal 2024, 2023 and 2022, our vendor reimbursements of cooperative advertising received were not in excess of the costs incurred.

Share-Based Compensation

We have a share-based compensation plan, the Genesco Inc. Amended and Restated 2020 Equity Incentive Plan (the "2020 Plan"), which became effective June 25, 2020 and amended and restated June 22, 2023. Under the 2020 Plan, we may grant non-qualified stock options, restricted stock awards ("RSAs"), restricted stock units ("RSUs") and performance-based share units ("PSUs") and other stock-based awards to our key employees, non-employee directors and consultants. Outstanding PSUs are subject to performance conditions that include either total Company performance metrics or business unit performance metrics along with a requirement that a recipient's service with the Company continue through the end of the performance period. The fair value of RSAs, RSUs and PSUs is determined based on the closing price of our common stock on the date of grant. Forfeitures for these awards are recognized as they occur. Compensation expense for RSAs, RSUs and PSUs, net of forfeitures, is recognized on a straight-line basis over the requisite service period. For PSUs, at the end of each reporting period compensation expense is updated for our expected performance level against the performance goals, which involves judgment as to the achievement of certain performance metrics.

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Foreign Currency Translation

The functional currency of our foreign operations is the applicable local currency. The translation of the applicable foreign currency into U.S. dollars is performed for balance sheet accounts using current exchange rates in effect at the balance sheet date. Income and expense accounts are translated at monthly average exchange rates. The unearned gains and losses resulting from such translation are included as a separate component of accumulated other comprehensive loss within shareholders' equity. Gains and losses from certain foreign currency transactions were not material for Fiscal 2024, 2023 and 2022.

Commitments

As a result of the Togast acquisition, we have a commitment to Samsung C&T America, Inc. (“Samsung”) related to the ultimate sale and valuation of related inventories owned by Samsung. If the product is sold below Samsung’s cost, we are committed to Samsung for the difference between the sales price and its cost. At February 3, 2024, the related inventory owned by Samsung had a historical cost of$8.5 million. As of February 3, 2024, we believe that we have appropriately accounted for any differences between the fair value of the Samsung inventory and Samsung’s historical cost.

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New Accounting Pronouncements

New Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures." The amendment in this ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and should be applied on a retrospective basis to all periods presented. We are currently evaluating the impact of adoption on our Consolidated Financial Statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. The amendments in this ASU are required to be adopted for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. We are currently evaluating the impact of adoption on our Consolidated Financial Statements and related disclosures.

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Goodwill and Other Intangible Assets

Goodwill

The changes in the carrying amount of goodwill by segment were as follows:

Goodwill Valuation (Genesco Brands Group)

As required under ASC 350, "Intangibles - Goodwill and Other," we annually assess our goodwill and indefinite lived trade names for impairment and on an interim basis if indicators of impairment are present. Our annual assessment date of goodwill and indefinite lived trade names is the first day of the fourth quarter. In accordance with ASC 350, when indicators of impairment are present on an interim basis, we must assess whether it is “more likely than not” (i.e., a greater than 50% chance) that an impairment has occurred.

Due to a dispute during the second quarter of Fiscal 2024 with a Genesco Brands Group licensor regarding renewal of their current license in the normal course which was resolved in Fiscal 2025, and based on the requirements of ASC 350, we identified indicators of impairment in the second quarter of Fiscal 2024 and determined that it was "more likely than not" that an impairment had occurred and performed a full valuation of our Togast reporting unit. Consistent with our Fiscal 2023 annual assessment, our analyses included preparing an income approach and a market approach model. The fair value estimates under the income approach are sensitive to significant assumptions required to develop prospective financial information related to growth rates in sales, costs, and estimates of future expected changes in operating margins. Other significant assumptions relate to estimating the weighted average cost of capital utilized for discounting cash flow estimates and terminal period growth rates. These significant assumptions are affected by expectations about future market or economic conditions. The market approach model considers valuations of comparable companies as an input in the determination of the value of the reporting unit.

Based upon the results of these analyses, we concluded the goodwill attributed to Togast was fully impaired. As a result, we recorded a non-cash impairment charge of$28.5 million in the second quarter of Fiscal 2024.

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Goodwill and Other Intangible Assets, Continued

Other intangibles by major classes were as follows:

(1)

Includes a$21.3 million trademark at February 3, 2024 related to Schuh Group and$3.2 million related to Journeys Group.

(2)

Includes$5.1 million for the Togast acquisition.

(3)

Backlog for Togast.

The amortization of intangibles was$0.6 million for each of Fiscal 2024, Fiscal 2023 and Fiscal 2022. Currently, amortization of intangibles is expected to be$0.6 million for each of the next four years and$0.5 million in five years.

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Asset Impairments and Other Charges

Asset impairment charges are reflected as a reduction of the net carrying value of property and equipment and operating lease right of use assets, in asset impairment and other, net in the accompanying Consolidated Statements of Operations.

We recorded a pretax charge to earnings of$1.8 million in Fiscal 2024, including$1.1 million for severance and$1.0 million for asset impairments, partially offset by a$0.3 million insurance gain.

We recorded a pretax charge to earnings of$0.9 million in Fiscal 2023, including$1.6 million for asset impairments, partially offset by a$0.7 million gain on the termination of our pension plan.

We recorded a pretax gain to earnings of$8.1 million in Fiscal 2022, including an$18.1 million gain on the sale of a warehouse and a$0.6 million insurance gain, partially offset by$8.6 million for professional fees related to the actions of a shareholder activist and$2.0 million for asset impairments.

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Inventories

Note 6

Property and Equipment and Other Current Accrued Liabilities

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Fair Value

The carrying amounts and fair values of our financial instruments at February 3, 2024 and January 28, 2023 are:

Debt fair values were determined using a discount cash flow analysis based on current market interest rates for similar types of financial instruments and would be classified in Level 2 within the fair value hierarchy.

Carrying amounts reported on our Consolidated Balance Sheets for cash, receivables and accounts payable approximate fair value due to the short-term maturity of these instruments.

As of February 3, 2024, we have$0.2 million of long-lived assets held and used which were measured using Level 3 inputs within the fair value hierarchy.

As of February 3, 2024, we have$6.3 million of investments held and used which were measured using Level 1 inputs within the fair value hierarchy.

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Long-Term Debt

Credit Facility

On January 28, 2022, we entered into the Third Amendment to our Credit Facility dated as of January 31, 2018 between us, certain of our subsidiaries, the lenders party thereto and Bank of America, N.A. as agent, to, among other things, (i) extend the maturity date to January 28, 2027, (ii) remove the first in-last out term loan that was in an amount equal to$17.5 million and (iii) add certain in-transit inventory to the borrowing base, subject to customary eligibility requirements. In addition, the Third Amendment makes conforming changes to replace LIBOR with the Secured Overnight Financing Rate ("SOFR"), the Sterling Overnight Index Average ("SONIA") and EURIBOR. The Total Commitments (as defined in the Credit Agreement) for the revolving loans remains at$332.5 million.

The Credit Facility continues to be secured by certain assets of the Company and certain subsidiaries of the Company, including accounts receivable, inventory, payment intangibles and deposit accounts. Equity interests, certain equipment, intellectual property and most leasehold interests are specifically excluded. The Credit Facility continues to provide for the borrowing base to include real estate as those assets are added or maintained as collateral and contains customary real estate covenants. The current outstanding long-term debt balance of$34.7 million bears interest at an average rate of 7.79% and matures January 28, 2027.

Deferred financing costs incurred in Fiscal 2022 of$1.2 million related to the amended Credit Facility were capitalized and are being amortized over the term of the new agreement. The remaining balance of deferred financing costs incurred related to the previous Credit Facility are being amortized over the term of the new agreement. These costs are included in other non-current assets on the Consolidated Balance Sheets.

The Credit Facility is a revolving credit facility in the aggregate principal amount of$332.5 million, including (i) for the Company and other borrowers formed in the U.S., a$70.0 million sublimit for the issuance of letters of credit and a domestic swingline subfacility of up to$45.0 million, (ii) for GCO Canada ULC, a revolving credit subfacility in an amount not to exceed$70.0 million, which includes a$5.0 million sublimit for the issuance of letters of credit and a swingline subfacility of up to$5.0 million, and (iii) for Genesco (UK) Limited, a revolving credit subfacility in an aggregate amount not to exceed$100.0 million, which includes a$10.0 million sublimit for the issuance of letters of credit and a swingline subfacility of up to$10.0 million. Any swingline loans and any letters of credit and borrowings under the Canadian and U.K. subfacilities will reduce the availability under the Credit Facility on a dollar for dollar basis. We have the option, from time to time, to increase the availability under the Credit Facility by an aggregate amount of up to$200.0 million subject to, among other things, the receipt of commitments for the increased amount. In connection with this increased facility, the Canadian revolving credit subfacility may be increased by no more than$15.0 million and the UK revolving credit subfacility may be increased by no more than$100.0 million. The aggregate amount of the loans made and letters of credit issued under the Credit Facility are limited to the lesser of the facility amount ($332.5 million or, if increased as described above, up to$532.5 million) or the "Borrowing Base", as defined in the Credit Agreement.

We are required to pay a commitment fee on the actual daily unused portions of the Credit Facility at a rate of 0.20% per annum.

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Long-Term Debt, Continued

The Credit Facility also permits us to incur senior debt in an amount up to the greater of$500.0 million or an amount that would not cause our ratio of consolidated total indebtedness to consolidated EBITDA to exceed 5.0:1.0 provided that certain terms and conditions are met.

In addition, the Credit Facility contains certain covenants that, among other things, restrict additional indebtedness, liens and encumbrances, loans and investments, acquisitions, dividends and other restricted payments, transactions with affiliates, asset dispositions, mergers and consolidations, prepayments or material amendments to certain material documents and other matters customarily restricted in such agreements.

The Credit Facility does not require us to comply with any financial covenants unless Excess Availability, as defined in the Credit Agreement, is less than the greater of$22.5 million or 10% of the loan cap. If and during such time as Excess Availability is less than the greater of$22.5 million or 10% of the loan cap, the Credit Facility requires us to have a fixed charge coverage ratio of not less than 1.0:1.0. Excess Availability was$218.8 million at February 3, 2024.

The Credit Facility contains customary events of default, which if any of them occurs, would permit or require the principal of and interest on the Credit Facility to be declared due and payable as applicable.

We were in compliance with all the relevant terms and conditions of the Credit Facility as of February 3, 2024.

U.K. Facility Agreement

On November 2, 2022, Schuh entered into the Facility Agreement with Lloyds for a£19.0 million revolving credit facility. The Facility Agreement expires November 2, 2025, with options to requesttwo one-year extensions to this termination date subject to lender approval, and bears interest at 2.35% over the Bank of England Base Rate. This Facility Agreement replaced Schuh's Facility Letter that would have expired in October 2023. The Facility Agreement includes certain financial covenants specific to Schuh. Following certain customary events of default outlined in the Facility Agreement, payment of outstanding amounts due may be accelerated or the commitments may be terminated. The Facility Agreement is secured by charges over all of the assets of Schuh, and Schuh's subsidiary, Schuh (ROI) Limited. Pursuant to a Guarantee in favor of Lloyds in its capacity as security trustee, Genesco Inc. has guaranteed the obligations of Schuh under the Facility Agreement and certain existing ancillary facilities on an unsecured basis.

We were in compliance with all the relevant terms and conditions of the Facility Agreement as of February 3, 2024.

The revolver borrowings outstanding under the Credit Facility at February 3, 2024 included$32.9 million U.S. revolver borrowings and$1.8 million (C$2.4 million) related to GCO Canada ULC. We had outstanding letters of credit of$6.9 million under the Credit Facility at February 3, 2024. These letters of credit support lease and insurance indemnifications.

Note 9

Leases

We lease our office space and all of our retail store locations, transportation equipment and other equipment under various noncancelable operating leases. The leases have varying terms and expire at various dates through 2037. The store leases in the United States, Puerto Rico and Canada typically have initial terms of approximately 10 years. The store leases in the U.K. and the ROI typically have initial terms of between 10 and 15 years. Our lease portfolio includes leases with fixed base rental payments, rental payments based on a percentage of retail sales over contractual amounts and others with predetermined fixed escalations of the minimum rentals based on a defined consumer price index or percentage. Generally, most of the leases require us to pay taxes, insurance, maintenance costs and contingent rentals based on sales. We evaluate renewal options and break options at lease inception and on an ongoing basis, and include renewal options and break options that we are reasonably certain to exercise in our expected lease terms for calculations of our right-of-use assets and liabilities. Approximately 3% of our leases contain renewal options. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Under ASC 842, for store, office and equipment leases beginning in Fiscal 2020 and later, we have elected to not separate fixed lease components and non-lease components. Accordingly, we include fixed rental payments, common area maintenance costs, promotional advertising costs and other fixed costs in our measurement of lease liabilities.

Our leases do not provide an implicit rate, so the incremental borrowing rate, based on the information available at commencement or modification date, is used in determining the present value of lease payments. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. For operating leases that commenced prior to the date of adoption of the new lease accounting guidance, we used the incremental borrowing rate that corresponded to the initial lease term as of the date of adoption.

Net lease costs are included within selling and administrative expenses on the Consolidated Statements of Operations. The table below presents the components of lease cost for operating leases for the years ended February 3, 2024, January 28, 2023 and January 29, 2022.

Note 9

Leases, Continued

The following table reconciles the maturities of undiscounted cash flows to our operating lease liabilities recorded on the Consolidated Balance Sheets at February 3, 2024:

Our weighted-average remaining lease term and weighted-average discount rate for operating leases as of February 3, 2024 and January 28, 2023 are:

As of February 3, 2024, we have additional operating leases that have not yet commenced with estimated right of use liabilities of$10.5 million. These leases will commence in Fiscal 2025 with lease terms of 1 to 10 years.

COVID-19 related lease concessions decreased our contractual rent expense by approximately$17 million during Fiscal 2022.

Note 10

Equity

Non-Redeemable Preferred Stock

Note 10

Equity, Continued

Employees’ Subordinated Convertible Preferred Stock:

Stated and liquidation values are 88 times the average quarterly per share dividend paid on common stock for the previous eight quarters (if any), but in no event less than$30 per share. Each share of this issue of preferred stock is convertible intoone share of common stock and hasone vote per share.

Subordinated Serial Preferred Stock:

Our charter permits the Board of Directors to issue Subordinated Serial Preferred Stock (3,000,000 shares, in aggregate, are authorized) in as many series, each with as many shares and such rights and preferences as the Board may designate. We have shares authorized for$2.30 Series 1,$4.75 Series 3,$4.75 Series 4, Series 6 and$1.50 Subordinated Cumulative Preferred stocks in amounts of 64,368 shares,40,449 shares,53,764 shares,800,000 shares and 5,000,000 shares, respectively. All of these preferred stocks were mandatorily redeemed by us in Fiscal 2014. As a result, there are no outstanding shares for any preferred issues of stock other than Employees' Subordinated Convertible Preferred stock shown in the table above.

Common Stock:

Common stock-$1 par value. Authorized:80,000,000 shares; issued: February 3, 2024 –11,960,793 shares; January 28, 2023–13,088,782 shares. There were 488,464 shares held in treasury at February 3, 2024 and January 28, 2023. Each outstanding share is entitled toone vote. At February 3, 2024, common shares were reserved as follows:27,845 shares for conversion of preferred stock and 730,381 shares for the 2020 Plan.

For the year ended February 3, 2024, shares of common stock were issued as follows:257,744 restricted shares as part of the 2020 Plan;38,284 shares to directors in exchange for their services;86,179 shares withheld for taxes on restricted stock vested in Fiscal 2024;76,633 shares of restricted stock forfeited in Fiscal 2024; and 90 shares issued in miscellaneous conversions of Employees’ Subordinated Convertible Preferred Stock. In addition, the Company repurchased and retired 1,261,295 shares of common stock at an average weighted market price of$25.39 for a total of$32.0 million.

For the year ended January 28, 2023, shares of common stock were issued as follows:299,914 restricted shares as part of the 2020 Plan;16,536 shares to directors in exchange for their services;73,137 shares withheld for taxes on restricted stock vested in Fiscal 2023;31,057 shares of restricted stock forfeited in Fiscal 2023; and 390 shares were issued in miscellaneous conversions of Employees’ Subordinated Convertible Preferred Stock. In addition, we repurchased and retired 1,380,272 shares of common stock at an average weighted market price of$52.66 for a total of$72.7 million.

For the year ended January 29, 2022, shares of common stock were issued as follows:229,363 restricted shares as part of the 2020 Plan;14,936 shares to directors in exchange for their services;64,535 shares withheld for taxes on restricted stock vested in Fiscal 2022;6,885 shares of restricted stock forfeited in Fiscal 2022; and 6,100 shares were issued in miscellaneous conversions of Employees’ Subordinated Convertible Preferred Stock. In addition, we repurchased and retired 1,360,909 shares of common stock at an average weighted market price of$60.88 for a total of$82.8 million.

Note 10

Equity, Continued

Restrictions on Dividends and Redemptions of Capital Stock:

Our charter provides that no dividends may be paid and no shares of capital stock acquired for value if there are dividend or redemption arrearages on any senior or equally ranked stock. We do not pay dividends and therefore, there are no redemption arrearages. Exchanges of subordinated serial preferred stock for common stock or other stock junior to such exchanged stock are permitted.

Note 11

Income Taxes

The components of earnings (loss) from continuing operations before income taxes is comprised of the following:

Income tax expense from continuing operations is comprised of the following:

Note 11

Reconciliation of the United States federal statutory rate to our effective tax rate from continuing operations is as follows:

We are subject to a tax on global intangible low-tax income (“GILTI”). GILTI taxes foreign income in excess of deemed return on tangible assets of a foreign corporation and we elected to treat this tax as a period cost. The impact from GILTI was not material for Fiscal 2024, 2023 or 2022.

We have a$56.8 million non-current prepaid income tax receivable on our Consolidated Balance Sheets as of February 3, 2024. This receivable relates to the remaining uncollected portion of our$107.2 million carryback of our Fiscal 2021 federal tax losses to prior tax periods under the CARES Act. The Internal Revenue Service ("IRS") is currently auditing the refund claim under the requirements of the Joint Committee on Taxation refund review process. We expect the examination process to extend for more than 12 months. We concluded that all positions in the refund claim met the more-likely-than-not standard based on the technical merits of the position and we recorded the benefit under the requirements of ASC 740. In addition, we recorded a$0.2 million unrecognized tax benefit related to the claim. It is possible the IRS could challenge our interpretation of the technical merits of the positions and the actual amount of the tax benefit may differ from the original refund claim.

Note 11

Deferred tax assets and liabilities are comprised of the following:

The deferred tax balances have been classified in our Consolidated Balance Sheets as follows:

As of February 3, 2024 and January 28, 2023, we had state net operating loss carryforwards of$9.9 million and$9.0 million, respectively. We provided a valuation allowance against these attributes of$8.1 million as of February 3, 2024 and$3.2 million as of January 28, 2023. Expiration of these attributes will occur in various years through 2044.

As of each of February 3, 2024 and January 28, 2023, we had state tax credits of$0.6 million. We provided a valuation allowance against these attributes of$0.6 million as of each of February 3, 2024 and January 28, 2023. These credits expire in fiscal years 2025 through 2027.

As of February 3, 2024 and January 28, 2023, we had foreign net operating loss carryforwards of$41.4 million and$39.8 million, respectively, which have a carryforward period of at least 16 years.

Note 11

As of February 3, 2024, we have provided a total valuation allowance of approximately$44.0 million on deferred tax assets associated primarily with foreign and state net operating losses for which management has determined it is more likely than not that the deferred tax assets will not be realized. The$7.5 million net increase in valuation allowance during Fiscal 2024 from the$36.5 million provided for as of January 28, 2023 relates primarily to state tax attributes. We removed$2.4 million of German deferred tax assets and an equivalent amount of valuation allowance as our entity operating in Germany was merged out of existence in the period ended January 28, 2023. Management believes that it is more likely than not that the remaining deferred tax assets will be fully realized.

As of February 3, 2024, we have provided less than$0.1 million of deferred taxes on the accumulated undistributed earnings of our foreign operations beyond the amounts recorded for deemed repatriation of such earnings, as required in the Tax Cuts and Jobs Act (the “Act”). Based upon evaluation of our worldwide operations and specific plans to remit foreign earnings back to the U.S., we can no longer assert that earnings from certain foreign operations will be indefinitely reinvested.

As of February 3, 2024, foreign tax credit carryforwards of approximately$3.8 million were available to reduce possible future U.S. income taxes and expire from 2028 to 2031. As a result of the Act, we may no longer utilize certain U.S. foreign tax credit carryforwards. A valuation allowance of$2.8 million has been established against these credits.

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits.

The amount of unrecognized tax benefits which would impact the annual effective tax rate if recognized were$0.8 million as of February 3, 2024, and$0.2 million each year as of January 28, 2023 and January 29, 2022. The amount of unrecognized tax benefits may change during the next twelve months but we do not believe the change, if any, will be material to our consolidated financial position or results of operations.

We recognize interest expense and penalties related to the above unrecognized tax benefits within income tax expense on the Consolidated Statements of Operations and it was not material for Fiscal 2024, 2023 or 2022. We recorded$2.7 million and$1.7 million of interest income within income tax expense, net on the Consolidated Statements of Operations for the years ended February 3, 2024 and January 28, 2023, respectively, related to our outstanding federal refund request. We did not record any interest income within income tax expense, net for the year ended January 29, 2022.

We file income tax returns in federal and in many state and local jurisdictions as well as foreign jurisdictions. With few exceptions, our state and local income tax returns for fiscal years ended January 30, 2021 and beyond remain subject to examination. In addition, we have subsidiaries in various foreign jurisdictions that have statutes of limitation generally ranging fromtwo tosix years. As part of the IRS audit of our federal income tax return for the fiscal year ended January 30, 2021, we have extended the statute of limitations for our fiscal years February 1, 2020, forward through April 30, 2025.

Note 11

The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective for our tax periods ending February 1, 2025 and forward. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world are enacting similar legislation. As currently designed, Pillar Two will ultimately apply to our worldwide operations. There remains uncertainty as to the final Pillar Two model rules. We are continuing to evaluate the Pillar Two rules and their potential impact on future periods, but we do not expect the rules to have a material impact on our effective tax rate.

Note 12

Other Postretirement Benefit Plans

We provide health care benefits for early retirees that meet certain age and years of service criteria and life insurance benefits for certain retirees. Under the health care plan, early retirees are eligible for benefits until age 65. Employees who met certain requirements are eligible for life insurance benefits. We accrue such benefits during the period in which the employee renders service.

As of December 31, 2018, the early retiree medical plan was frozen to new entrants. The grandfathered group of employees as of December 31, 2018 were those that had reached age 45 and had at least 10 years of service with the Company and retire at age 55 or older and have at least 15 years of service with the Company.

The measurement date of the assets and liabilities for postretirement medical and life insurance plans is the month-end date that is closest to our fiscal year end.

Our Consolidated Balance Sheets include other postretirement medical and life insurance liabilities of$5.3 million and$5.2 million as of February 3, 2024 and January 28, 2023, respectively. The amount recognized in accumulated other comprehensive loss on the Consolidated Balance Sheets was$1.1 million and$1.3 million as of February 3, 2024 and January 28, 2023, respectively. Our Consolidated Statement of Operations includes net periodic benefit cost for other postretirement benefits of$0.5 million,$0.3 million and$0.2 million in Fiscal 2024, 2023 and 2022, respectively.

Section 401(k) Savings Plan

We have a Section 401(k) Savings Plan available to all employees in the U.S, including retail employees who have completed 500 hours of service within the first six months of employment, and are age 18 or older. There is a similar savings plan available to U.K. employees.

Since January 1, 2005, we began matching 100% of each U.S. employee’s contribution of up to 3% of salary and 50% of the next 2% of salary. In addition, for those employees hired before December 31, 2004, who were eligible for our cash balance retirement plan before it was frozen, we annually make an additional contribution of 2.5% of salary to each employee’s account. Participants are immediately vested in their contributions and our matching contribution plus actual earnings thereon. Our contribution expense for matching programs in the U.S. and U.K. was approximately$6.9 million for Fiscal 2024,$5.2 million for Fiscal 2023 and$5.9 million for Fiscal 2022.

Note 13

Earnings Per Share

Basic earnings per share excludes dilution and is computed by dividing earnings available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities to issue common stock were exercised or converted to common stock.

Weighted-average number of shares used for earnings per share is as follows:

Common stock equivalents are excluded in Fiscal 2024 due to the loss from continuing operations.

We repurchased 1,261,295 shares during Fiscal 2024 at a cost of$32.0 million or an average of$25.39 per share. We were operating under a$100.0 million repurchase authorization from February 2022. In June 2023, we announced an additional$50.0 million share repurchase authorization. As of February 3, 2024, we have$52.1 million remaining under the expanded share repurchase authorization. We repurchased 1,380,272 shares during Fiscal 2023 at a cost of$72.7 million or an average of$52.66 per share. We repurchased 1,360,909 shares during Fiscal 2022 at a cost of$82.8 million or an average of$60.88 per share. During the first quarter of Fiscal 2025, through March 27, 2024, we didnot repurchase any shares.

Note 14

Share-Based Compensation Plans

We have a share-based compensation plan, the 2020 Plan, which became effective June 25, 2020. Under the 2020 Plan, we may grant non-qualified stock options, RSAs, RSUs and PSUs and other stock-based awards to our key employees, non-employee directors and consultants for up to 1.8 million shares of common stock. Under the 2020 Plan, as amended and restated on June 22, 2023, an additional 0.5 million shares of common stock were authorized for such grants. Outstanding PSUs are subject to performance conditions that include either total Company performance metrics or business unit performance metrics along with a requirement that a recipient's service with the Company continue through the end of the performance period. The fair value of RSAs, RSUs and PSUs is determined based on the closing price of our common stock on the date of grant. Forfeitures for these awards are recognized as they occur. The 2020 Plan replaced our Second Amended and Restated 2009 Equity Incentive Plan (the “2009 Plan”). There will be no future awards under the 2009 Plan.

Stock Options and Cash Incentive Plans

Under both the 2009 and 2020 Plans, the exercise price of each stock option equals the market price of our stock on the date of grant, and an option’s maximum term is 10 years. Stock options granted under both plans primarily vest 25% per year over four years. We did not capitalize any share-based compensation expense.

Note 14

In addition, we established the 2020 Restricted Cash Incentive Program (the “Program”) in Fiscal 2021 to attract and retain executive officers and key employees. Officers and employees of the Company or its subsidiaries during Fiscal 2021 were eligible to receive grants under the Program. Total cash of$2.7 million was granted in June 2020 under this Program. Cash granted under the Program will primarily vest 25% per year over four years. The compensation paid under the Program is taxable and subject to applicable tax withholding requirements. Compensation expense recognized in selling and administrative expenses in the accompanying Consolidated Statements of Operations for this cash grant was$0.5 million,$0.6 million and$0.7 million for Fiscal 2024, Fiscal 2023 and Fiscal 2022, respectively.

Restricted Stock Incentive Plans

Director Restricted Stock

The 2020 Plan permits grants to non-employee directors on such terms as the Board of Directors may approve. Restricted stock awards were made to independent directors on the date of the annual meeting of shareholders in each of Fiscal 2024, 2023 and 2022. The shares granted in each award vested on the earlier of the first anniversary of the grant date and the date of the next annual meeting of shareholders, subject to the director's continued service through that date.

The grants for Fiscal 2024 and Fiscal 2023 were valued at$120,000 per director and the grants for Fiscal 2022 were valued at$107,500 per director. For Fiscal 2024, 2023 and 2022, we issued 37,264 shares,16,536 shares and 14,936 shares, respectively, of director restricted stock. In addition, we issued 1,020 shares and 504 shares to newly elected directors in Fiscal 2024 and Fiscal 2022, respectively. We didnot issue any shares to new directors in Fiscal 2023.

We recognized$1.0 million,$1.0 million and$0.7 million of director restricted stock related share-based compensation in Fiscal 2024, 2023 and 2022 in selling and administrative expenses in the accompanying Consolidated Statements of Operations.

Employee Restricted Stock Awards and Units

Under the 2020 Plan, we issued 256,866 shares,221,581 shares and 228,444 shares of RSAs in Fiscal 2024, 2023 and Fiscal 2022, respectively. Shares of RSAs issued in Fiscal 2024 primarily vest 33% per year over three years and RSAs issued in Fiscal 2023 and 2022 primarily vest 25% per year over four years, provided that on such date the grantee has remained continuously employed by the Company since the date of grant. In addition, we issued 77,487 shares of RSAs to certain executive employees in lieu of a portion of their performance-based compensation in Fiscal 2023. These restricted shares vesttwo-thirds in Fiscal 2024 andone-third in Fiscal 2025. Total RSAs issued in Fiscal 2023, including the annual grant to certain employees and performance-based compensation shares, were 299,068 restricted shares. Under the original 2020 Plan, restricted share grants depleted the shares available for future grants at a ratio of 1.72 shares per restricted share granted. Under the 2020 Plan, as amended and restated, restricted share grants after March 24, 2023 deplete the shares available for future grants at a ratio of 1.52 shares per restricted share granted.

Additionally, we issued 878,846 and 919 RSUs in Fiscal 2024, 2023 and 2022, respectively, to certain employees at no cost that vest over three years. The fair value of RSAs and RSUs is charged against income as compensation expense over the vesting period. Compensation expense recognized in selling and administrative expenses in the accompanying Consolidated Statements of Operations for these shares was$12.6 million,$12.9 million and$8.3 million for Fiscal 2024, 2023 and 2022, respectively.

Note 14

A summary of the status of our nonvested shares of our RSAs as of February 3, 2024 is presented below:

As of February 3, 2024, we had$17.0 million of total unrecognized compensation expense related to nonvested RSAs discussed above. That cost is expected to be recognized over a weighted average period of 1.44 years.

Performance-Based Share Units

In Fiscal 2024, we granted 96,866 PSUs (assuming target level achievement) to certain members of senior management. The actual number of shares that will be issued will be based on actual performance and can range from 0% and 200% of the shares granted. Performance conditions include both total Company and business unit performance metrics along with a requirement that a recipient's service with the Company continue through the end of the performance period. Compensation expense for PSUs, net of forfeitures, is recognized on a straight-line basis over the requisite service period and is updated for our expected performance level against performance goals at the end of each reporting period, which involves judgment as to the achievement of those goals. If performance goals are achieved, the PSUs will be issued based on the achievement level and will cliff vest in full at the end of the three-year performance period. Any portion of the PSUs that are not earned by the end of the three year period will be forfeited. Under the 2020 Plan, as amended and restated, PSUs deplete the shares available for future grants at a ratio of 1.52 shares per PSU granted. Compensation expense recognized in selling and administrative expenses in the accompanying Consolidated Statements of Operations for PSUs was$0.3 million for Fiscal 2024.

The weighted average grant date fair value of the 96,866 PSUs granted for Fiscal 2024 was$37.22 per share. There were 7,612 PSUs forfeited during Fiscal 2024 at a weighted average grant date fair value of$37.22 per share. PSUs outstanding as of February 3, 2024 were 89,254 shares, assuming performance achievement at target.

Note 14

As of February 3, 2024, we had$0.7 million of total unrecognized compensation expense related to non-vested PSUs discussed above. That cost is expected to be recognized over a weighted average period of 2.0 years. There were no modifications to PSUs in Fiscal 2024.

Note 15

Environmental Matters

The Company has legacy obligations including environmental monitoring and reporting costs related to: (i) a 2016 consent judgment entered into with the United States Environmental Protection Agency involving the site of a knitting mill operated by a former subsidiary of ours from 1965 to 1969 in Garden City, New York; and (ii) a 2010 consent decree with the Michigan Department of Natural Resources and Environment relating to our former Volunteer Leather Company facility in Whitehall, Michigan. We do not expect that future obligations related to either of these sites will have a material effect on our financial condition or results of operations.

During the fourth quarter of Fiscal 2024, we received insurance proceeds totaling$9.4 million ($7.2 million, net of tax) related to legacy environmental matters discussed above. The insurance proceeds are included in gain (loss) from discontinued operations, net of tax on the Consolidated Statements of Operations in Fiscal 2024.

Accrual for Environmental Contingencies

Related to all outstanding environmental contingencies, we hadaccrued $2.0 million as of February 3, 2024,$1.7 million as of January 28, 2023 and$1.4 million as of January 29, 2022. All such provisions reflect our estimates of the most likely cost (undiscounted, including both current and noncurrent portions) of resolving the contingencies, based on facts and circumstances as of the time they were made. There is no assurance that relevant facts and circumstances will not change, necessitating future changes to the provisions. Such contingent liabilities are included in the liability arising from provision for discontinued operations on the accompanying Consolidated Balance Sheets because it relates to former facilities operated by us. We have made pretax accruals for certain of these contingencies, including approximately$0.5 million in Fiscal 2024,$0.4 million in Fiscal 2023 and$0.2 million in Fiscal 2022. These charges are included in gain (loss) from discontinued operations, net in the Consolidated Statements of Operations and represent changes in estimates.

Note 15

Legal Proceedings, Continued

Guarantee Related to Discontinued Operations

As part of the Lids Sports Group sales transaction, the purchaser has agreed to indemnify and hold us harmless in connection with continuing obligations and any guarantees of ours in place as of February 2, 2019 in respect of post-closing or assumed liabilities or obligations of the Lids Sports Group business. The purchaser has agreed to use commercially reasonable efforts to have any guarantees by, or continuing obligations of, the Company released. However, we are contingently liable in the event of a breach by the purchaser of any such obligation to a third-party. In addition, we are a guarantor forfive Lids Sports Group leases with lease expirations through May 2025 and estimated maximum future payments totaling$3.0 million as of February 3, 2024. We do not believe the fair value of the guarantees is material to our Consolidated Financial Statements.

In addition to the matters specifically described in this Note, we are a party to other legal and regulatory proceedings and claims arising in the ordinary course of our business. While management does not believe that our liability with respect to any of these other matters is likely to have a material effect on our financial statements, legal proceedings are subject to inherent uncertainties and unfavorable rulings could have a material adverse impact on our financial statements.

Note 16

Business Segment Information

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Our reportable segments are based on management's organization of the segments in order to make operating decisions and assess performance along types of products sold. Journeys Group and Schuh Group sell primarily branded products from other companies while Johnston & Murphy Group and Genesco Brands Group sell primarily our owned and licensed brands.

Corporate assets include cash, domestic prepaid rent expense, prepaid income taxes, deferred income taxes, deferred note expense on revolver debt, corporate fixed assets, corporate operating lease right of use assets and miscellaneous investments. We do not allocate certain costs to each segment in order to make decisions and assess performance. These costs include corporate overhead, bank fees, interest expense, interest income, goodwill impairment, asset impairment charges and other, including severance, insurance gains, a gain on the termination of the pension plan, a gain on the sale of a distribution warehouse, major litigation and major lease terminations.

Note 16

(1)

Net sales in North America and in the United Kingdom, which includes the Republic of Ireland, accounted for 79% and 21%, respectively, of our net sales for Fiscal 2024.

(2)

Goodwill impairment of$28.5 million is related to Genesco Brands Group.

(3)

Asset impairments and other includes$1.1 million for severance and a$1.0 million charge for asset impairments in the Journeys Group, partially offset by a$0.3 million insurance gain.

(4)

Of our$677.2 million of long-lived assets,$89.4 million and$12.3 million relate to long-lived assets in the U.K. and Canada, respectively.

Note 16

(1)

Net sales in North America and in the United Kingdom, which includes the Republic of Ireland, accounted for 82% and 18%, respectively, of our net sales for Fiscal 2023.

(2)

Asset impairments and other includes a$1.6 million charge for asset impairments, of which$0.8 million is in the Journeys Group,$0.5 million is in the Johnston & Murphy Group,$0.2 million is in the Schuh Group and$0.1 million is in the Genesco Brands Group, partially offset by a$0.7 million gain on the termination of the pension plan.

(3)

Of our$704.7 million of long-lived assets,$93.3 million and$18.8 million relate to long-lived assets in the U.K. and Canada, respectively.

Note 16

(1)

Net sales in North America and in the United Kingdom, which includes the Republic of Ireland, accounted for 83% and 17%, respectively, of our net sales for Fiscal 2022.

(2)

Asset impairments and other includes an$18.1 million gain on the sale of a warehouse and a$0.6 million insurance gain, partially offset by$8.6 million for professional fees related to the actions of a shareholder activist and a$2.0 million charge for asset impairments, of which$1.0 million is in the Journeys Group,$0.8 million is in the Schuh Group and$0.2 million is in the Johnston & Murphy Group.

(3)

Of our$760.1 million of long-lived assets,$113.9 million and$26.0 million relate to long-lived assets in the U.K. and Canada, respectively.