GENESCO INC
For the period ended Feb 1, 2025. Filed Mar 26, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 26, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Report of Independent Registered Public Accounting Firm on the Financial Statements (PCAOB ID: 42)
Report of Independent Regist ered Public Accounting Firm
To the Shareholders and the Board of Directors of Genesco Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Genesco Inc. (the Company) as of February 1, 2025 and February 3, 2024, the related consolidated statements of operations, comprehensive income (loss), cash flows, and equity for each of the three fiscal years in the period ended February 1, 2025, and the related notes and financial statement schedule listed in the Index at Item 15 (collectively referred to as the “consolidated financial statements”). In our opinion, theconsolidated financial statements present fairly, in all material respects, the financial position of the Company at February 1, 2025 and February 3, 2024, and the results of its operations and its cash flows for each of the three years in the period ended February 1, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 1, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 26, 2025 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.
| Valuation of Journeys Group Inventory - Markdown Allowances | |
| Description of the Matter | During the fiscal year ended February 1, 2025, the net inventory balance was $425.2 million, of which $342.4 million related to retail merchandise inventory, which includes Journeys Group inventory. As more fully described in Note 1 to the consolidated financial statements, the valuation of retail inventory requires management to make judgements and estimates about the recoverability of the inventory and its market value. The Company establishes an inventory valuation allowance for expected markdowns. The Journeys Group analyses of the inventory markdown allowance includes consideration of inventory turn, average selling price, inventory age, vendor agreements, current market conditions, fashion trends and overall economic conditions. |
|---|---|
| Auditing the Company’s analyses to determine its inventory markdown allowance for Journeys Group was complex due to the estimation uncertainty in determining the future sales of the Company’s inventory, which are impacted by a number of factors that are affected by conditions outside the Company’s control, such as current market conditions, fashion trends and overall economic conditions. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s Journeys Group inventory markdown allowance process. |
| Our audit procedures to test the adequacy of the Journeys Group inventory markdown allowance included, among others, evaluating the appropriateness of the inputs to the inventory markdown allowance calculation, including testing the completeness and accuracy of the data used in the calculation such as historical markdown activity, inventory levels, average selling price and sales history for each subclass of inventory. We evaluated the assumptions over demand trends based on sales history and expectations of future sales. We compared actual markdown activity in recent years to the inventory markdown allowance estimated by the Journeys Group in prior years to evaluate the ability to accurately estimate the allowance. We also audited the calculation of the inventory valuation allowance by testing the mathematical accuracy. In addition, we performed inquiries of management and obtained documentation to evaluate the estimate. |
/s/Ernst & Young LLP
We have served as the Company's auditor since 2001.
Nashville, Tennessee
March 26, 2025
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.