GENESCO INC
For the period ended May 3, 2025. Filed Jun 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
May 3, 2025 · Filed Jun 12, 2025
GCO$36.07-2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-11-02; filed 2024-12-12.
0000950170-24-135629
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-05-03; filed 2025-06-12.
0000950170-25-085164
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 84 previous paragraphs and 60 current paragraphs.
28 unchanged; 28 reworded; 4 added; 25 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 9 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
We had an effective income tax rate of 28.5% and 26.7% in the first quarter of Fiscal 2026 and Fiscal 2025, respectively. The higher effective tax rate in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 reflects the impact of fewer unfavorable discrete items related to restricted stock vesting and penalties and interest related to income taxes.
Current report
We closed 19 Journeys Group stores and opened two stores in the first quarter of Fiscal 2026. Journeys Group operated 989 stores at the end of the first quarter of Fiscal 2026, including 203 Journeys Kidz stores in the United States, 34 Journeys stores in Canada and 29 Little Burgundy stores in Canada, compared to 1,047 stores at the end of the first quarter of Fiscal 2025, including 221 Journeys Kidz stores in the United States, 39 Journeys stores in Canada and 31 Little Burgundy stores in Canada.
Current report
a $13.0 million decrease in cash flow from changes in other accrued liabilities, primarily reflecting a higher payment of Fiscal 2025 performance-based compensation accruals in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025; and
Current report
On January 17, 2025, we executed Form 870 with the Internal Revenue Service ("IRS") exam team and began the process of completing the separate Joint Committee on Taxation ("JCT") review of our outstanding U.S. Federal tax refund claim for the Fiscal 2014 to Fiscal 2021 tax periods. As of February 1, 2025, we estimated the refund outstanding to be $59.3 million including interest. The balance outstanding has increased to $60.0 million as of May 3, 2025 as a result of additional accrued interest. During the first quarter of Fiscal 2026, the JCT finalized their review with no changes to the claim and the IRS began the process of issuing the refund. We have received $58.3 million of the refund during the second quarter of Fiscal 2026. We expect to receive the remaining balance in the second quarter this year as well. As such, the $60.0 million receivable is classified as prepaids and other current assets on the Consolidated Balance Sheets as of May 3, 2025.
Removed paragraphs (25)
Previous report
Gross margin increased 2.5% to $285.3 million in the third quarter of Fiscal 2025 from $278.4 million in the third quarter of Fiscal 2024, but decreased as a percentage of net sales from 48.1% to 47.8% reflecting decreased gross margin as a percentage of net sales at Journeys Group and Schuh Group, partially offset by increased gross margin as a percentage of net sales at Johnston & Murphy Group and Genesco Brands Group. The decreased gross margin as a percentage of net sales is due primarily to changes in product mix at Journeys Group.
Previous report
Earnings from continuing operations before income taxes (“pretax earnings”) for the third quarter of Fiscal 2025 was $8.9 million compared to $8.5 million for the third quarter of Fiscal 2024. Pretax earnings for the third quarter of both Fiscal 2025 and Fiscal 2024 included asset impairment and other charges of $0.1 million for asset impairments.
Previous report
We had an effective income tax rate of 311.5% and 22.5% in the third quarter of Fiscal 2025 and Fiscal 2024, respectively. The higher effective tax rate in the third quarter this year compared to the third quarter last year reflects a $26.3 million U.S. valuation allowance in the third quarter this year, reflecting the uncertainty regarding our ability to realize the benefit of our general tax attributes in the U.S. jurisdiction.
Previous report
We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider all available evidence, both positive and negative, including but not limited to earnings history, projected future outcomes, industry and market trends and the nature of each of the deferred tax assets in assessing the extent to which a valuation allowance should be applied against our U.S. and foreign deferred tax assets. We now expect our U.S. jurisdiction to be in a cumulative loss position within the near term which we believe is a new significant piece of negative evidence in the third quarter of Fiscal 2025. Due to the weight of the cumulative loss position for our U.S. jurisdiction in our objective analysis of all the positive and negative evidence, we no longer believe it is more likely than not we will realize certain U.S. deferred tax assets. As a result, we recorded a full valuation allowance against our U.S. deferred tax assets.
Previous report
The net loss in the third quarter of Fiscal 2025 was $18.9 million, or $1.76 diluted loss per share, compared to net earnings of $6.5 million, or $0.60 diluted earnings per share, in the third quarter of Fiscal 2024.
Previous report
Results of Operations – Third Quarter of Fiscal 2025 Compared to Third Quarter of Fiscal 2024
Previous report
Net sales from Journeys Group increased 3.8% to $362.5 million in the third quarter of Fiscal 2025, compared to $349.4 million in the third quarter of Fiscal 2024. The net sales increase compared to last year's third quarter reflects an 11% increase in comparable sales, partially offset by the negative impact of moving a strong week of back-to-school sales into the second quarter this year related to the 53-week calendar shift and a 5% decrease in the average number of stores in the third quarter this year. We believe our Journeys consumer has become more interested in a broader range of brands they are buying and more diversified in the styles they are wearing. Journeys added significant new product offerings across a number of casual and athletic brands which fueled strong full price selling and increased average selling prices in the third quarter this year. The newness in product offerings also contributed to increased traffic in stores as well as online with digital representing 17% of total sales for Journeys in the third quarter this year. We closed 12 Journeys Group stores in the third quarter of Fiscal 2025 and expect to close up to ten more Journeys Group stores in Fiscal 2025. Journeys Group operated 1,028 stores at the end of the third quarter of Fiscal 2025, including 218 Journeys Kidz stores, 37 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 1,080 stores at the end of the third quarter of last year, including 224 Journeys Kidz stores, 41 Journeys stores in Canada and 34 Little Burgundy stores in Canada.
Previous report
Our net sales decreased 0.4% to $1.579 billion in the first nine months of Fiscal 2025 compared to $1.586 billion in the first nine months of Fiscal 2024. The net sales decrease compared to last year's first nine months was driven by decreased comparable store sales, the impact of net store closings and decreased wholesale sales, partially offset by a 9% increase in e-commerce comparable sales, the inclusion this year of additional sales due to the calendar shift because Fiscal 2024 was a 53-week year and a favorable impact of $7.8 million in sales due to foreign exchange rates. Journeys Group sales and Schuh Group sales each increased 1% for the first nine months while Johnston & Murphy Group sales decreased 5% and Genesco Brands Group sales decreased 10% for the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024. Schuh's sales decreased 1% on a local currency basis for the first nine months of Fiscal 2025. Total comparable sales were flat for the first nine months of Fiscal 2025, with same store sales down 2% and comparable e-commerce sales up 9%.
Previous report
Selling and administrative expenses in the first nine months of Fiscal 2025 were down slightly to $777.9 million compared to $778.5 million in the first nine months of Fiscal 2024. Selling and administrative expenses increased 20 basis points as a percentage of net sales in the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024 from 49.1% to 49.3%, reflecting increased expenses as a percentage of net sales at Schuh Group and Johnston & Murphy Group, partially offset by decreased expenses as a percentage of sales at Journeys Group and Genesco Brands Group. The increase in expenses as a percentage of net sales reflects increased selling salaries, depreciation expense, marketing expense and professional fees, partially offset by decreased occupancy expense, royalty expense and a favorable change in certain non-income taxes.
Previous report
Operating margin was a loss of 2.0% in the first nine months of Fiscal 2025 compared to a loss of 3.2% in the first nine months of Fiscal 2024 reflecting improved operating margin at Journeys Group and Genesco Brands Group, partially offset by decreased operating margin at Schuh Group and Johnston & Murphy Group. The overall improvement in operating margin for the first nine months this year compared to the first nine months last year primarily reflects a non-cash goodwill impairment charge of $28.5 million in the second quarter of Fiscal 2024, partially offset by decreased gross margin as a percentage of net sales and increased selling and administrative expenses as a percentage of net sales in the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024.
Previous report
We had an effective income tax rate of -47.7% and 23.5% in the first nine months of Fiscal 2025 and Fiscal 2024, respectively. The lower effective tax rate for the first nine months this year compared to the first nine months last year reflects a $26.3 million U.S. valuation allowance recorded in the third quarter of Fiscal 2025, reflecting the uncertainty regarding our ability to realize the benefit of our general tax attributes in the U.S. jurisdiction.
Previous report
Journeys Group
Previous report
Schuh Group
Previous report
Net sales from Schuh Group increased 1.4% to $338.7 million in the first nine months of Fiscal 2025 compared to $334.0 million in the first nine months of Fiscal 2024. Net sales for the first nine months of Fiscal 2025 included a favorable impact of $8.7 million due to changes in foreign exchange rates, partially offset by decreased comparable sales. Total comparable sales for Schuh Group decreased 3% for the first nine months this year. Schuh Group continued to contend with a challenging U.K. macro environment in the first nine months this year and the consumer continues to be selective in their purchases. In addition, Schuh Group sales in the first nine months of Fiscal 2025 compares against strong sales growth in the first nine months of Fiscal 2024. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for approximately 40% of its sales in the first nine months of Fiscal 2025. Schuh Group's sales decreased 1% on a local currency basis for the first nine months of Fiscal 2025.
Previous report
The 230 basis point decrease in operating margin for Schuh Group for the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024 reflects decreased gross margin as a percentage of net sales reflecting a more promotional environment at Schuh Group during the first nine months this year, partially offset by decreased shipping and warehouse expenses. The increase in selling and administrative expenses as a percentage of net sales also contributed to the decrease in operating margin reflecting increased selling salaries, marketing, compensation and depreciation expenses, partially offset by decreased performance-based compensation and occupancy expenses.
Previous report
Johnston & Murphy Group
Previous report
Johnston & Murphy Group net sales decreased 5.4% to $228.7 million for the first nine months of Fiscal 2025 from $241.8 million for the first nine months of Fiscal 2024, primarily due to decreased wholesale sales, a 3% decrease in comparable sales, reflecting decreased comparable sales and a 3% decrease in the average number of stores in the first nine months of Fiscal 2025. The softening in men's premium, non-athletic, footwear market made for a difficult operating environment in the first nine months of Fiscal 2025 due to consumer selectivity related to premium priced products. Retail operations accounted for 76.0% of Johnston & Murphy Group's sales in the first nine months of Fiscal 2025, up slightly from 75.4% in the first nine months of Fiscal 2024.
Previous report
The 340 basis point decrease in operating margin for Johnston & Murphy Group for the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024 reflects increased selling and administrative expenses as a percentage of net sales for the first nine months of Fiscal 2025, reflecting the deleverage of expenses, especially marketing expense, selling salaries, occupancy and compensation expenses in part as a result of decreased revenue in the first nine months of Fiscal 2025. Johnston & Murphy continues to make investments in marketing to enhance the brand as the men's premium, non-athletic footwear market returns to a more normal operating environment. Gross margin as a percentage of net sales increased for the first nine months of Fiscal 2025, primarily reflecting improved initial margins, lower markdowns, lower warehouse costs and a higher mix of direct-to-consumer sales volume.
Previous report
Genesco Brands Group
Previous report
Genesco Brands' net sales decreased 10.0% to $90.9 million for the first nine months of Fiscal 2025 from $101.0 million for the first nine months of Fiscal 2024 due primarily to the repositioning of the business to a more refined portfolio of licenses, partially offset by increased sales of Dockers footwear.
Previous report
The improvement in operating margin for Genesco Brands Group for the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024 was primarily due to decreased selling and administrative expenses as a percentage of net sales in the first nine months of Fiscal 2025 reflecting decreased royalty, marketing and other expenses as a result of an amendment to the Levi's license agreement and decreased warehouse costs and bad debt expenses, partially offset by increased performance-based compensation expense. Gross margin decreased as a percentage of net sales reflecting a $1.8 million inventory provision for a distribution model transition, partially offset by a favorable brand sales mix shift.
Previous report
Corporate and other expense for the first nine months of Fiscal 2025 was $27.2 million compared to $52.1 million for the first nine months of Fiscal 2024. Corporate expense in the first nine months of Fiscal 2025 included a $1.5 million charge in asset impairment and other charges for severance and asset impairments. Corporate expense in the first nine months of Fiscal 2024 included non-cash impairment charges of $28.5 million related to goodwill and a $0.6 million charge in asset impairment and other charges for asset impairments. The corporate expense increase, excluding asset impairment and other charges in Fiscal 2025 and Fiscal 2024 and goodwill impairment in Fiscal 2024, primarily reflects an increase in performance-based compensation expense and professional fees in the first nine months this year compared to the first nine months last year.
Previous report
Net interest expense decreased 44.8% to $3.4 million in the first nine months of Fiscal 2025 compared to $6.2 million in the first nine months of Fiscal 2024 primarily reflecting decreased average borrowings in the first nine months this year compared to the first nine months last year.
Previous report
an $82.6 million decrease in cash flow from changes in inventory, primarily reflecting an increase in Genesco Brands Group inventory and a larger increase year over year in Journeys Group inventory, as well as a lower decrease year over year in Johnston & Murphy Group inventory, partially offset by a lower increase year over year in Schuh Group inventory in the first nine months of Fiscal 2025.
Previous report
In the fourth quarter of Fiscal 2021, we implemented tax strategies allowed under the 5-year carryback provisions in the CARES Act which we believe will generate approximately $55 million of net tax refunds. We received approximately $26 million of such net tax refunds in Fiscal 2022 and anticipated receipt of the remaining outstanding net tax refund in Fiscal 2023. However, in the third quarter of Fiscal 2023, we were notified the IRS would conduct an audit of the periods related to the outstanding net tax refund. While we do not believe any uncertainty with the technical merits of the positions generating the net tax refunds exists, we do anticipate the timing of the net tax refund will be extended as a result of the audit process. Accordingly, we have recorded the outstanding refund to non-current prepaid income taxes on the Condensed Consolidated Balance Sheets as of November 2, 2024.
Reworded paragraphs (28)
Previous wording
Our net sales increased 2.9% to $596.3 million in the third quarter of Fiscal 2025 compared to $579.3 million in the third quarter of Fiscal 2024. The net sales increase compared to last year's third quarter reflects a 6% increase in comparable sales, including a 15% increase in e-commerce comparable sales and a 4% increase in same store sales, and a favorable foreign exchange impact, partially offset by the negative impact of approximately $17 million due to the move of a strong week of back-to-school sales into the second quarter this year related to the 53-week calendar shift and the impact of net store closings. The Journeys Group business had strong back-to-school sales with comparable sales up 11% for the third quarter of Fiscal 2025, fueled by continued improvement in their product assortment, among other actions. Schuh Group continued to contend with a challenging U.K. macro environment in the third quarter this year and the consumer continued to be selective in their purchases. Johnston & Murphy Group consumers responded well to new product launches during the quarter with both conversion and transaction size increases, but the softening in men's premium non-athletic footwear market made for a difficult operating environment as store traffic decreased in the third quarter this year. Inflationary pressures continue to impact discretionary spending. By segment, Journeys Group sales increased 4%, Schuh Group sales increased 3%, Johnston & Murphy Group sales decreased 4% and Genesco Brands Group sales increased 10% for the third quarter of Fiscal 2025 compared to the third quarter of Fiscal 2024. Schuh Group's sales decreased 2% on a local currency basis for the third quarter of Fiscal 2025.
Current wording
Our net sales increased 3.6% to $474.0 million in the first quarter of Fiscal 2026 compared to $457.6 million in the first quarter of Fiscal 2025. The net sales increase compared to last year's first quarter reflects a 5% increase in comparable sales, including a 7% increase in e-commerce comparable sales and a 5% increase in same store sales, and increased wholesale sales, partially offset by the impact of net store closings. The Journeys Group business had a strong first quarter of Fiscal 2026 with comparable sales up 8%, fueled by strength in their product assortment. Schuh Group is benefiting from work on product elevation and improved access to top brands which contributed to their comparable sales increase of 1% in the first quarter of Fiscal 2026. The consumer continues to be very selective in their purchases in both the U.S and the U.K., with a willingness to shop when there is a reason, and retreat when there is not. Johnston & Murphy Group comparable sales were down 2% in the first quarter of Fiscal 2026 but there was growth in conversion rates and transaction size, demonstrating a positive consumer response to new product at Johnston & Murphy. By segment, Journeys Group sales increased 5%, Schuh Group sales increased 4% and Genesco Brands Group sales increased 7%, while Johnston & Murphy Group sales decreased 3% in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025. Schuh Group's sales increased 1% on a local currency basis for the first quarter of Fiscal 2026.
Previous wording
Gross margin decreased 1.3% to $747.2 million in the first nine months of Fiscal 2025 from $756.8 million in the first nine months of Fiscal 2024 and decreased as a percentage of net sales from 47.7% to 47.3% reflecting decreased gross margin as a percentage of net sales in all business units except Johnston & Murphy Group. The decreased gross margin as a percentage of net sales reflects primarily a higher level of promotional activity at Schuh and changes in product mix at Journeys.
Current wording
Gross margin increased 2.3% to $221.2 million in the first quarter of Fiscal 2026 from $216.3 million in the first quarter of Fiscal 2025, but decreased as a percentage of net sales from 47.3% in the first quarter of Fiscal 2025 to 46.7% in the first quarter of Fiscal 2026 reflecting decreased gross margin as a percentage of net sales in all business units except Genesco Brands Group. The overall decrease in gross margin as a percentage of net sales is due primarily to changes in brand mix at Journeys Group and Schuh Group and promotional activity at Schuh Group.
Previous wording
Selling and administrative expenses in the third quarter of Fiscal 2025 increased 2.8% to $274.9 million from $267.5 million compared to the third quarter of Fiscal 2024 reflecting increased selling salaries, marketing expense and compensation expense. Selling and administrative expenses decreased 10 basis points as a percentage of net sales from 46.2% to 46.1%, reflecting the impact of our cost savings initiatives and closure of unproductive stores. By segment, selling and administrative expenses decreased as a percentage of net sales at Journeys Group and Genesco Brands Group, partially offset by increased expenses as a percentage of net sales at Schuh Group and Johnston & Murphy Group.
Current wording
Selling and administrative expenses in the first quarter of Fiscal 2026 increased 0.5% to $249.0 million from $247.8 million compared to the first quarter of Fiscal 2025, but decreased 170 basis points as a percentage of net sales in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 from 54.2% to 52.5%. The decrease as a percentage of net sales reflects decreased occupancy and performance-based compensation expenses as well as other cost savings initiatives. By segment, selling and administrative expenses decreased as a percentage of net sales in all business units except Johnston & Murphy Group.
Previous wording
Operating margin was 1.7% in the third quarter of Fiscal 2025 compared to 1.9% in the third quarter of Fiscal 2024 reflecting decreased operating margin at Schuh Group and Johnston & Murphy Group, partially offset by improved operating margin at Journeys Group and Genesco Brands Group. The overall decrease in operating margin for the third quarter this year compared to the third quarter last year primarily reflects a decrease in gross margin as a percentage of net sales that more than offset decreased expenses as a percentage of net sales.
Current wording
Operating margin was (5.9)% in the first quarter of Fiscal 2026 compared to (7.0)% in the first quarter of Fiscal 2025 reflecting improved operating margin at Journeys Group and Genesco Brands Group, partially offset by decreased operating margin at Johnston & Murphy Group, while Schuh Group remained flat. The overall improvement in operating margin for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 primarily reflects decreased expenses as a percentage of net sales, partially offset by decreased gross margin as a percentage of net sales.
Previous wording
The pretax loss for the first nine months of Fiscal 2025 was $35.9 million compared to a pretax loss of $57.4 million for the first nine months of Fiscal 2024. The pretax loss for the first nine months of Fiscal 2025 included a $1.8 million charge for a distribution model transition in the Genesco Brands Group and asset impairment and other charges of $1.5 million for severance and asset impairments. The pretax loss for the first nine months of Fiscal 2024 included a non-cash goodwill impairment charge of $28.5 million and asset impairment and other charges of $0.6 million for asset impairments.
Current wording
The loss from continuing operations before income taxes (“pretax loss”) for the first quarter of Fiscal 2026 was $29.7 million compared to a pretax loss of $33.1 million for the first quarter of Fiscal 2025. The pretax loss for the first quarter of Fiscal 2026 included asset impairment and other charges of $0.3 million for severance and asset impairments. The pretax loss for the first quarter of Fiscal 2025 included a $1.6 million charge for a distribution model transition in the Genesco Brands Group and asset impairment and other charges of $0.6 million for severance and asset impairments.
Previous wording
The net loss in the first nine months of Fiscal 2025 was $53.3 million, or $4.90 diluted loss per share, compared to a net loss of $44.0 million, or $3.88 diluted loss per share, in the first nine months of Fiscal 2024.
Current wording
The net loss in the first quarter of Fiscal 2026 was $21.2 million, or $2.02 diluted loss per share, compared to a net loss of $24.3 million, or $2.23 diluted loss per share, in the first quarter of Fiscal 2025.
Previous wording
We consider comparable sales to be an important indicator of our current performance, and investors may find it useful as such. Comparable sales results are important to achieve leveraging of our costs, including occupancy, selling salaries and depreciation etc. Comparable sales also have a direct impact on our total net revenue, working capital and cash. We define "comparable sales" as sales from stores open longer than one year, beginning with the first day a store has comparable sales (which we refer to as "same store sales"), and sales from websites operated longer than one year and direct mail catalog sales (which we refer to in this report as "comparable e-commerce sales"). Temporarily closed stores are excluded from the comparable sales calculation if closed for more than seven days. Expanded stores are excluded from the comparable sales calculation until the first day an expanded store has comparable prior year sales. Current year foreign exchange rates are applied to both current year and prior year comparable sales to achieve a consistent basis for comparison.
Current wording
We consider comparable sales to be an important indicator of our current performance, and investors may find it useful as such. Comparable sales results are important to achieve leveraging of our costs, including occupancy, selling salaries, depreciation and other costs. Comparable sales also have a direct impact on our total net revenue, working capital and cash. We define "comparable sales" as sales from stores open longer than one year, beginning with the first day a store has comparable sales (which we refer to as "same store sales"), and sales from websites operated longer than one year and direct mail catalog sales (which we refer to in this report as "comparable e-commerce sales"). Temporarily closed stores are excluded from the comparable sales calculation if closed for more than seven days. Expanded stores are excluded from the comparable sales calculation until the first day an expanded store has comparable prior year sales. Current year foreign exchange rates are applied to both current year and prior year comparable sales to achieve a consistent basis for comparison.
Previous wording
Results of Operations – First Nine Months of Fiscal 2025 Compared to First Nine Months of Fiscal 2024
Current wording
Results of Operations – First Quarter of Fiscal 2026 Compared to First Quarter of Fiscal 2025
Previous wording
Net sales from Journeys Group increased 1.3% to $920.8 million in the first nine months of Fiscal 2025, compared to $908.8 million in the first nine months of Fiscal 2024. The net sales increase compared to last year's first nine months reflects a 2% increase in comparable sales and additional sales this year related to the 53-week calendar shift, partially offset by a 6% decrease in the average number of Journeys stores in the first nine months this year. We believe our Journeys consumer has become more interested in a broader range of brands they are buying and more diversified in the styles they are wearing. We added a significant amount of fresh product to our assortment in the later part of our first nine months this year and store traffic has increased as a result and drove a sequential improvement in Journeys Group comparable sales. We closed 41 Journeys Group stores in the first nine months of Fiscal 2025 and expect to close up to ten more Journeys Group stores in Fiscal 2025.
Current wording
Net sales from Journeys Group increased 5.1% to $272.6 million in the first quarter of Fiscal 2026, compared to $259.4 million in the first quarter of Fiscal 2025. The net sales increase compared to Fiscal 2025's first quarter reflects an 8% increase in comparable sales, with increases in both stores and e-commerce channels, partially offset by a 6% decrease in the average number of stores in the first quarter of Fiscal 2026. We believe our Journeys Group consumer is more interested in a broader range of brands they are buying and more diversified in the styles they are wearing. The increased comparable sales in the first quarter of Fiscal 2026 was fueled by strength in Journeys Group's product assortment with athletic posting strong gains. Journeys Group drove strong gains in conversion and transaction size, which more than offset the softer traffic as consumers have shown a willingness to shop when there is a reason, and retreat when there is not.
Previous wording
The 50 basis point improvement in operating margin for Journeys Group for the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024 was due primarily to decreased selling and administrative expenses as a percentage of net sales reflecting a decrease in occupancy and compensation expenses, partially offset by increased selling salaries and depreciation expense. The decrease in selling and administrative expenses, in both absolute dollars and as a percentage of sales, demonstrates the impact of our cost savings initiatives and closing underperforming stores. Gross margin as a percentage of net sales decreased for the first nine months of Fiscal 2025, reflecting changes in product mix, partially offset by decreased markdowns.
Current wording
The 170 basis point improvement in operating margin for Journeys Group for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 was due to decreased selling and administrative expenses as a percentage of net sales reflecting leverage of expense as a result of increased revenue in the first quarter of Fiscal 2026, especially occupancy, freight and depreciation expenses, partially offset by higher selling expenses to drive growth. This was partially offset by decreased gross margin as a percentage of net sales reflecting decreased initial margins as a result of changes in brand mix. The decrease in selling and administrative expenses as a percentage of net sales demonstrates the impact of our cost savings initiatives and closing underperforming stores.
Previous wording
Net sales from Schuh Group increased 3.1% to $121.8 million in the third quarter of Fiscal 2025 compared to $118.1 million in the third quarter of Fiscal 2024. Net sales for the third quarter this year included a favorable impact of $5.5 million due to changes in foreign exchange rates, partially offset by decreased comparable sales and moving a strong week of back-to-school sales into the second quarter this year related to the 53-week calendar shift. Total comparable sales for Schuh Group decreased 1% for the third quarter this year. Schuh Group continued to contend with a challenging U.K. macro environment in the third quarter this year and the consumer continued to be selective in their purchases. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for over 40% of its sales in the third quarter of Fiscal 2025. Schuh Group's sales decreased 2% on a local currency basis for the third quarter of Fiscal 2025. Schuh Group operated 122 stores at the end of the third quarter of Fiscal 2025, compared to 124 stores at the end of the third quarter of Fiscal 2024.
Current wording
Net sales from Schuh Group increased 3.9% to $95.9 million in the first quarter of Fiscal 2026 compared to $92.3 million in the first quarter of Fiscal 2025. Net sales for the first quarter of Fiscal 2026 includes a 1% increase in comparable sales, reflecting increased e-commerce comparable sales and includes a favorable impact of $2.3 million due to changes in foreign exchange rates, partially offset by decreased same store sales. Schuh is benefiting from their work on product elevation and improved access to top brands but continues to contend with a challenging U.K. macro environment in the first quarter of Fiscal 2026 and the consumer continued to be selective in their purchases. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for over 40% of its sales in the first quarter of Fiscal 2026. Schuh Group's sales increased 1% on a local currency basis for the first quarter of Fiscal 2026. Schuh Group operated 121 stores at the end of the first quarter of Fiscal 2026, compared to 122 stores at the end of the first quarter of Fiscal 2025.
Previous wording
The 200 basis point decrease in operating margin for Schuh Group for the third quarter of Fiscal 2025 compared to the third quarter of Fiscal 2024 reflects increased selling and administrative expenses as a percentage of net sales, reflecting increased selling salaries and marketing expense partially offset by decreased performance-based compensation expense. Gross margin decreased as a percentage of net sales reflecting increased promotional activity and changes in product mix, partially offset by decreased shipping and warehouse expenses.
Current wording
Operating margin remained flat for Schuh Group for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025. The 150 basis point decrease in selling and administrative expenses as a percentage of net sales, reflecting decreased marketing, compensation and performance-based compensation expenses, partially offset by increased occupancy expense, was offset by a 150 basis point decrease in gross margin as a percentage of net sales. The gross margin decrease as a percentage of net sales reflected lower initial margins as a result of changes in brand mix and increased promotional activity, partially offset by decreased shipping and warehouse expenses.
Previous wording
Johnston & Murphy Group net sales decreased 3.6% to $78.5 million for the third quarter of Fiscal 2025 from $81.4 million for the third quarter of Fiscal 2024, primarily due to decreased wholesale sales, a 3% decrease in the average number of stores in the third quarter this year and a 1% decrease in comparable sales. Consumers responded well to new footwear product launches during the quarter with both conversion and transaction size increases, but the softening in men's premium non-athletic footwear market made for a difficult operating environment as store traffic continued down in the third quarter this year. The brand's apparel and accessories continue to resonate well with its consumers and the Johnston & Murphy Group intends to continue to capitalize on opportunities beyond footwear. Retail operations accounted for 74.0% of Johnston & Murphy Group's sales in the third quarter of Fiscal 2025, up from 72.5% in the third quarter of Fiscal 2024. The store count for Johnston & Murphy Group's retail operations at the end of the third quarter of Fiscal 2025 was 152 stores, including five stores in Canada, compared to 156 stores, including six stores in Canada, at the end of the third quarter of Fiscal 2024.
Current wording
Johnston & Murphy Group net sales decreased 3.0% to $76.8 million for the first quarter of Fiscal 2026 from $79.2 million for the first quarter of Fiscal 2025, primarily due to a 2% decrease in comparable sales, reflecting decreased store sales, and a 4% decrease in the average number of stores in the first quarter of Fiscal 2026, partially offset by increased wholesale sales. Even with a decrease in comparable sales for the first quarter of Fiscal 2026, we saw growth in Johnston & Murphy Group's store conversion and transaction size which is a positive consumer response to their assortment, especially for new product. Retail operations accounted for 72.8% of Johnston & Murphy Group's sales in the first quarter of Fiscal 2026, down from 74.0% in the first quarter of Fiscal 2025. The store count for Johnston & Murphy Group's retail operations at the end of the first quarter of Fiscal 2026 was 146 shops and factory stores compared to 152 shops and factory stores, including five stores in Canada, at the end of the first quarter of Fiscal 2025. Johnston & Murphy Group closed its five Canadian stores at the end of Fiscal 2025.
Previous wording
The 340 basis point decrease in operating margin for Johnston & Murphy for the third quarter of Fiscal 2025 compared to the third quarter of Fiscal 2024 reflects increased selling and administrative expenses as a percentage of net sales for the third quarter of Fiscal 2025 reflecting the deleverage of expenses, especially marketing expense, occupancy expense, selling salaries and compensation expense in part as a result of decreased revenue in the third quarter of Fiscal 2025, as well as increased performance-based compensation expense due to the impact of the reversal of performance-based compensation expense in the third quarter of Fiscal 2024. Gross margin as a percentage of net sales increased for the third quarter of Fiscal 2025, reflecting improved initial margins, lower markdowns and a higher mix of direct-to-consumer sales volume.
Current wording
The 230 basis point decrease in operating margin for Johnston & Murphy Group for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 reflects increased selling and administrative expenses as a percentage of net sales for the first quarter of Fiscal 2026 primarily due to the deleverage of expenses, especially marketing, depreciation and compensation expenses as a result of decreased revenue in the first quarter of Fiscal 2026, partially offset by decreased performance-based compensation expense. The decrease in operating margin also reflects a decrease in gross margin as a percentage of net sales for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 primarily due a lower mix of direct-to-consumer sales volume as well as higher retail markdowns and an increase in shipping and warehouse expense, partially offset by improved initial margins.
Previous wording
Genesco Brands' net sales increased 10.2% to $33.5 million for the third quarter of Fiscal 2025 from $30.4 million for the third quarter of Fiscal 2024 due primarily to increased sales of Levi's and Dockers footwear, partially offset by decreased sales in other licenses and private label offerings as we continue to reposition the business to a more refined portfolio of licenses.
Current wording
Genesco Brands Group's net sales increased 7.5% to $28.6 million for the first quarter of Fiscal 2026 from $26.6 million for the first quarter of Fiscal 2025 primarily due to increased sales of Levi's footwear, partially offset by decreased sales in Dockers footwear and other licenses.
Previous wording
The improvement in operating margin for Genesco Brands Group for the third quarter of Fiscal 2025 compared to the third quarter of Fiscal 2024 was primarily due to increased gross margin as a percentage of net sales reflecting more full price selling in Levi's and a favorable change in sales mix and decreased selling and administrative expenses as a percentage of net sales in the third quarter of Fiscal 2025 reflecting leverage of expense as a result of increased revenue in the third quarter of Fiscal 2025 as well as decreased royalty, marketing and other expenses as a result of an amendment to the Levi's license agreement, and decreased performance-based compensation expense and warehouse expense.
Current wording
The 610 basis point improvement in operating margin for Genesco Brands Group for the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025 was primarily due to decreased selling and administrative expenses as a percentage of net sales in the first quarter of Fiscal 2026 reflecting leverage of expenses as a result of increased revenue in the first quarter of Fiscal 2026, as well as lower performance-based compensation expense. Gross margin increased as a percentage of net sales which also contributed to the operating margin improvement, reflecting a $1.6 million inventory provision in gross margin for a distribution model transition in the first quarter of Fiscal 2025.
Previous wording
Corporate and other expense for the third quarter of Fiscal 2025 was $9.7 million compared to $7.8 million for the third quarter of Fiscal 2024. Corporate expense in the third quarter of both Fiscal 2025 and Fiscal 2024 included a $0.1 million charge in asset impairment and other charges for asset impairments. The corporate expense increase, excluding asset impairment and other charges, reflects increased performance-based compensation expense in the third quarter this year compared to the third quarter last year.
Current wording
Corporate and other expense for the first quarter of Fiscal 2026 was $7.9 million compared to $8.8 million for the first quarter of Fiscal 2025. Corporate expense in the first quarter of Fiscal 2026 and Fiscal 2025 included asset impairment and other charges of $0.3 million and $0.6 million, respectively, for asset impairments and severance. The corporate expense decrease, excluding asset impairment and other charges, reflects decreased professional fees and performance-based compensation expense in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025.
Previous wording
Net interest expense decreased 45.0% to $1.2 million in the third quarter of Fiscal 2025 compared to $2.2 million in the third quarter of Fiscal 2024 primarily reflecting decreased average borrowings in the third quarter this year compared to the third quarter last year.
Current wording
Net interest expense increased 50.4% to $1.3 million in the first quarter of Fiscal 2026 compared to $0.9 million in the first quarter of Fiscal 2025 primarily reflecting increased average borrowings in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025.
Previous wording
Cash used in operating activities was $5.6 million higher in the first nine months of Fiscal 2025 compared to the first nine months of Fiscal 2024, reflecting primarily the following factors:
Current wording
Cash used in operating activities was $67.3 million higher in the first three months of Fiscal 2026 compared to the first three months of Fiscal 2025, reflecting primarily the following factors:
Previous wording
a $54.8 million increase in cash flow from changes in accounts payable, primarily reflecting changes in buying patterns in the first nine months of Fiscal 2025; and
Current wording
a $41.7 million decrease in cash flow from changes in accounts payable, primarily reflecting changes in buying patterns in the first three months of Fiscal 2026 as well as changes in timing of rent payments in the first quarter of Fiscal 2026 compared to the first quarter of Fiscal 2025;
Previous wording
an $18.3 million increase in cash flow from changes in accounts receivable, primarily reflecting the distribution model transition at Genesco Brands Group and decreased wholesale sales; partially offset by
Current wording
a $7.2 million decrease in cash flow from changes in accounts receivable, primarily reflecting increased wholesale sales.
Previous wording
Cash used in investing activities was $22.3 million lower for the first nine months of Fiscal 2025 as compared to the first nine months of Fiscal 2024 reflecting decreased capital expenditures primarily related to omni-channel capabilities and investments in retail stores.
Current wording
Cash used in investing activities was $12.5 million higher for the first three months of Fiscal 2026 as compared to the first three months of Fiscal 2025 reflecting increased capital expenditures primarily related to investments in retail stores.
Previous wording
Cash provided by financing activities was $7.3 million higher in the first nine months of Fiscal 2025 as compared to the first nine months of Fiscal 2024 reflecting decreased share repurchases this year compared to the same period last year, partially offset by decreased net borrowings.
Current wording
Cash provided by financing activities was $83.1 million higher in the first three months of Fiscal 2026 as compared to the first three months of Fiscal 2025 reflecting increased net borrowings, partially offset by increased share repurchases in Fiscal 2026 compared to the same period in Fiscal 2025.
Previous wording
As of November 2, 2024, we have borrowed $96.1 million U.S. revolver borrowings and $4.0 million (C$5.6 million) related to GCO Canada ULC. We were in compliance with all the relevant terms and conditions of the Credit Facility and the Facility Agreement as of November 2, 2024.
Current wording
As of May 3, 2025, we have borrowed $111.2 million U.S. revolver borrowings, $2.5 million (C$3.5 million) related to GCO Canada ULC and $7.3 million (£5.5 million) related to Schuh revolver borrowings. We were in compliance with all the relevant terms and conditions of the Credit Facility and the Facility Agreement as of May 3, 2025.
Previous wording
Our contractual obligations at November 2, 2024 increased 7% compared to February 3, 2024, primarily due to increased long-term debt, partially offset by decreased lease obligations and purchase obligations.
Current wording
Our contractual obligations at May 3, 2025 increased 29% compared to February 1, 2025, primarily due to increased long-term debt and lease obligations.
Previous wording
Total capital expenditures in Fiscal 2025 are expected to be approximately $45 million to $50 million of which approximately 67% is for new stores and remodels and 33% is for computer hardware, software and warehouse enhancements for initiatives to drive traffic and omni-channel capabilities. We do not currently have any longer-term capital expenditures or other cash requirements other than as set forth above and in the contractual obligations table as disclosed in Item 7 of our Fiscal 2024 Form 10-K. We also do not currently have any off-balance sheet arrangements.
Current wording
Total capital expenditures in Fiscal 2026 are expected to be approximately $50-$65 million of which approximately 70% is for new stores and renovations and 30% is for other initiatives. We do not currently have any longer-term capital expenditures or other cash requirements other than as set forth above and in the contractual obligations table as disclosed in Item 7 of our Annual Report on Form 10-K for the fiscal year ended February 1, 2025. We also do not currently have any off-balance sheet arrangements.
Previous wording
We repurchased 17,922 shares of our common stock during the third quarter of Fiscal 2025 at a cost of $0.4 million, or $24.50 per share, and repurchased 399,633 shares of our common stock during the first nine months of Fiscal 2025 at a cost of $9.8 million, or $24.49 per share. We have $42.3 million remaining as of November 2, 2024 under our expanded share repurchase authorization announced in June 2023. We have recorded an accrual for excise tax on stock repurchases of less than $0.1 million in other accrued liabilities in our Condensed Consolidated Balance Sheets as of November 2, 2024. We did not repurchase any shares of our common stock during the third quarter of Fiscal 2024 and repurchased 1,261,295 shares of our common stock during the first nine months of Fiscal 2024 at a cost of $32.0 million, or $25.39 per share.
Current wording
We repurchased 604,531 shares of our common stock during the first quarter of Fiscal 2026 at a cost of $12.6 million, or an average of $20.79 per share. We have $29.8 million remaining as of May 3, 2025 under our expanded share repurchase authorization announced in June 2023. We did not repurchase any shares of our common stock during the first quarter of Fiscal 2025. During the second quarter of Fiscal 2026, through June 11, 2025, we have not repurchased any shares of our common stock.
Previous wording
Descriptions of recently issued accounting pronouncements, if any, and the accounting pronouncements adopted by us during the third quarter of Fiscal 2025 are included in Note 1 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Current wording
Descriptions of recently issued accounting pronouncements, if any, and the accounting pronouncements adopted by us during the first quarter of Fiscal 2026 are included in Note 1 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
The 20 basis point improvement in operating margin for Journeys Group for the third quarter of Fiscal 2025 compared to the third quarter of Fiscal 2024 was due to decreased selling and administrative expenses as a percentage of net sales reflecting a decrease in occupancy, freight and compensation expenses, partially offset by decreased gross margin as a percentage of net sales reflecting changes in product mix. The decrease in selling and administrative expenses as a percentage of net sales demonstrates the impact of our cost savings initiatives and closing underperforming stores.
Previous report — wording carried elsewhere
Corporate, Interest Expenses and Other Charges
Previous report — wording carried elsewhere
During the fourth quarter of Fiscal 2025, through December 11, 2024, we have not repurchased any shares of our common stock.