GENESCO INC

Previous wording

Our net sales increased 4.0% to $546.0 million in the second quarter of Fiscal 2026 compared to $525.2 million in the second quarter of Fiscal 2025. The net sales increase compared to last year's second quarter reflects a 4% increase in comparable sales, including a 5% increase in same store sales reflecting investment in and a strategic focus on the store channel and a 1% increase in e-commerce comparable sales, and a favorable foreign exchange impact, partially offset by the impact of net store closings resulting from our store optimization efforts. The Journeys Group business had a strong second quarter of Fiscal 2026 with comparable sales up 9%, fueled by strength in the product assortment. Schuh Group comparable sales were down 4% for the second quarter of Fiscal 2026 reflecting the challenging retail environment in the U.K. Johnston & Murphy Group comparable sales were up 1% in the second quarter of Fiscal 2026 as customers embraced the new product assortment, but were offset by decreased wholesale sales. By segment, Journeys Group sales increased 6%, Schuh Group sales increased 2% and Genesco Brands Group sales increased 5%, while Johnston & Murphy Group sales decreased 3% in the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025. Schuh Group's sales decreased 4% on a local currency basis for the second quarter of Fiscal 2026.

Current wording

Our net sales increased 3.3% to $616.2 million in the third quarter of Fiscal 2026 compared to $596.3 million in the third quarter of Fiscal 2025. The net sales increase compared to last year's third quarter reflects a 3% increase in comparable sales, including a 5% increase in same store sales reflecting investment in and a strategic focus on the store channel as well as strong back-to-school sales in Journeys Group, an increase in wholesale sales and a favorable foreign exchange impact, partially offset by the impact of net store closings resulting from our store optimization efforts. The Journeys Group business had a strong third quarter of Fiscal 2026 with comparable sales up 6%, fueled by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 2% for the third quarter of Fiscal 2026 reflecting the challenging retail environment in the U.K. Johnston & Murphy Group comparable sales were down 2% in the third quarter of Fiscal 2026 driven by softer e-commerce trends due to a shift in marketing spend. By segment, Journeys Group sales increased 4%, Schuh Group sales increased 2%, Johnston & Murphy Group sales increased 3% with higher wholesale sales offsetting the lower comparable sales and Genesco Brands Group sales increased 3% in the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025. Schuh Group's sales decreased 1% on a local currency basis for the third quarter of Fiscal 2026.

Previous wording

Gross margin increased 1.8% to $249.9 million in the second quarter of Fiscal 2026 from $245.6 million in the second quarter of Fiscal 2025, but decreased as a percentage of net sales from 46.8% in the second quarter of Fiscal 2025 to 45.8% in the second quarter of Fiscal 2026 reflecting decreased gross margin as a percentage of net sales in Schuh Group and Genesco Brands Group, partially offset by increased gross margin as a percentage of net sales in Journeys Group and Johnston & Murphy Group. The overall decrease in gross margin as a percentage of net sales is due primarily to increased promotional activity at Schuh Group and lower margins at Genesco Brands Group related to the exit of certain licenses and the impact from tariffs, partially offset by increased margins at Johnston & Murphy reflecting price increases and lower retail markdowns as well as improved costs from sourcing optimization.

Current wording

Gross margin increased 1.2% to $288.6 million in the third quarter of Fiscal 2026 from $285.3 million in the third quarter of Fiscal 2025, but decreased as a percentage of net sales from 47.8% in the third quarter of Fiscal 2025 to 46.8% in the third quarter of Fiscal 2026. The overall decrease in gross margin as a percentage of net sales is due primarily to lower margins at Genesco Brands Group related to ongoing tariff pressure and the exit of licenses as well as increased promotional activity at Schuh Group, partially offset by lower shipping and warehouse costs for Journeys Group and Schuh Group.

Previous wording

Operating margin was (2.6)% in the second quarter of Fiscal 2026 compared to (2.0)% in the second quarter of Fiscal 2025 reflecting decreased operating margin in all business units except Journeys Group. The overall decrease in operating margin for the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025 primarily reflects decreased gross margin as a percentage of net sales, partially offset by decreased expenses as a percentage of net sales.

Current wording

Operating margin was 1.4% in the third quarter of Fiscal 2026 compared to 1.7% in the third quarter of Fiscal 2025. The overall decrease in operating margin for the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025 primarily reflects decreased gross margin as a percentage of net sales and higher asset impairment and other charges, partially offset by decreased expenses as a percentage of net sales.

Previous wording

The loss from continuing operations before income taxes (“pretax loss”) for the second quarter of Fiscal 2026 was $16.0 million compared to a pretax loss of $11.7 million for the second quarter of Fiscal 2025. The pretax loss for the second quarter of Fiscal 2026 included asset impairment and other charges of $0.1 million for severance. The pretax loss for the second quarter of Fiscal 2025 included a $0.2 million charge for a distribution model transition in the Genesco Brands Group and asset impairment and other charges of $0.8 million for severance and asset impairments.

Current wording

Earnings from continuing operations before income taxes (“pretax earnings”) for the third quarter of Fiscal 2026 was $7.5 million compared to $8.9 million for the third quarter of Fiscal 2025. Pretax earnings for the third quarter of Fiscal 2026 included asset impairment and other charges of $4.3 million for store restructuring, severance and asset impairments. Pretax earnings for the third quarter of Fiscal 2025 included a $0.1 million charge for asset impairments.

Previous wording

We had an effective income tax rate of (15.0)% and 15.2% in the second quarter of Fiscal 2026 and Fiscal 2025, respectively. The lower effective tax rate in the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025 reflects a reduction in the tax benefit recorded in Fiscal 2026 due to the enactment of income tax law changes under the OBBBA and their interaction with our valuation allowance in the U.S. jurisdiction.

Current wording

We had an effective income tax rate of 28.1% and 311.5% in the third quarter of Fiscal 2026 and Fiscal 2025, respectively. The lower effective tax rate in the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025 primarily reflects a $26.3 million U.S. valuation allowance recorded in the third quarter of Fiscal 2025.

Previous wording

The net loss in the second quarter of Fiscal 2026 was $18.5 million, or $1.79 diluted loss per share, compared to a net loss of $10.0 million, or $0.91 diluted loss per share, in the second quarter of Fiscal 2025.

Current wording

Net earnings in the third quarter of Fiscal 2026 was $5.4 million, or $0.50 diluted earnings per share, compared to a net loss of $18.9 million, or $1.76 diluted loss per share, in the third quarter of Fiscal 2025.

Previous wording

We discuss our critical accounting estimates in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations", in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025. We describe our significant accounting policies in Note 1, "Summary of Significant Accounting Policies", of the Notes to Consolidated Financial Statements included in our Annual Report on

Current wording

We discuss our critical accounting estimates in Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations", in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025. We describe our significant accounting policies in Note 1, "Summary of Significant Accounting Policies", of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended February 1, 2025. There have been no significant changes in our definition of significant accounting policies or critical accounting estimates since the end of Fiscal 2025.

Previous wording

Net sales from Journeys Group increased 6.5% to $318.2 million in the second quarter of Fiscal 2026, compared to $298.8 million in the second quarter of Fiscal 2025. The net sales increase compared to the second quarter of Fiscal 2025 reflects a 9% increase in comparable sales, with a strong increase in the store channel, partially offset by a 5% decrease in the average number of stores in the second quarter of Fiscal 2026. The Journeys Group consumer is more interested in a broader range of brands evidenced by what they are buying and by the more diversified styles they are wearing. The increased comparable sales in the second quarter of Fiscal 2026 was fueled by strength in Journeys Group's product assortment with brands across both athletic and casual posting strong gains. Journeys Group drove noteworthy gains in conversion and higher transaction size in the second quarter of Fiscal 2026.

Current wording

Net sales from Journeys Group increased 3.9% to $376.7 million in the third quarter of Fiscal 2026, compared to $362.5 million in the third quarter of Fiscal 2025. The net sales increase compared to the third quarter of Fiscal 2025 reflects an increase in same store sales, partially offset by a 5% decrease in the average number of stores in the third quarter of Fiscal 2026 and a decrease in e-commerce comparable sales. The increased comparable sales in the third quarter of Fiscal 2026 was fueled by the continued strength in Journeys Group's product assortment and other initiatives. The Journeys Group consumer is more interested in a broader range of brands evidenced by what they are buying and by the more diversified styles they are wearing. Journeys Group's strong store performance was driven by gains in conversion and higher transaction size in the third quarter of Fiscal 2026.

Previous wording

We closed nine Journeys Group stores and opened four stores in the second quarter of Fiscal 2026. Journeys Group operated 984 stores at the end of the second quarter of Fiscal 2026, including 200 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 1,039 stores at the end of the second quarter of Fiscal 2025, including 220 Journeys Kidz stores in the United States, 39 Journeys stores in Canada and 31 Little Burgundy stores in Canada.

Current wording

We closed ten Journeys Group stores in the third quarter of Fiscal 2026. Journeys Group operated 974 stores at the end of the third quarter of Fiscal 2026, including 196 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 1,028 stores at the end of the third quarter of Fiscal 2025, including 218 Journeys Kidz stores in the United States, 37 Journeys stores in Canada and 30 Little Burgundy stores in Canada.

Previous wording

The 210 basis point improvement in operating margin for Journeys Group for the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025 was primarily due to a 190 basis point decrease in selling and administrative expenses as a percentage of net sales. This reflects leverage of expenses as a result of increased revenue in the second quarter of Fiscal 2026, especially occupancy expense and selling salaries, partially offset by increased performance-based compensation expense. In addition, gross margin as a percentage of net sales increased 20 basis points, reflecting lower markdowns and decreased shipping and warehouse expense, partially offset by lower 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.

Current wording

The 190 basis point improvement in operating margin for Journeys Group for the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025 was primarily due to a 160 basis point decrease in selling and administrative expenses as a percentage of net sales. This reflects leverage of expenses as a result of increased revenue in the third quarter of Fiscal 2026, especially occupancy expense and selling salaries, partially offset by increased marketing expense. In addition, gross margin as a percentage of net sales increased 20 basis points, reflecting decreased shipping and warehouse expense and lower markdowns, partially offset by lower 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 1.6% to $126.6 million in the second quarter of Fiscal 2026 compared to $124.6 million in the second quarter of Fiscal 2025. Net sales for the second quarter of Fiscal 2026 include a favorable impact of $6.8 million due to changes in foreign exchange rates and increased e-commerce comparable sales, partially offset by decreased same store sales. Schuh Group total comparable sales decreased 4% for the second quarter of Fiscal 2026. Schuh continued to contend with a challenging U.K. retail environment in the second quarter of Fiscal 2026. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for over 40% of its sales in the second quarter of Fiscal 2026. Schuh Group's sales decreased 4% on a local currency basis for the second quarter of Fiscal 2026. Schuh Group operated 120 stores at the end of the second quarter of Fiscal 2026, compared to 123 stores at the end of the second quarter of Fiscal 2025.

Current wording

Net sales from Schuh Group increased 1.6% to $123.8 million in the third quarter of Fiscal 2026 compared to $121.8 million in the third quarter of Fiscal 2025. The net sales increase for the third quarter of Fiscal 2026 includes a favorable impact of $3.7 million due to changes in foreign exchange rates and increased e-commerce comparable sales, partially offset by decreased same store sales. Schuh Group total comparable sales decreased 2% for the third quarter of Fiscal 2026. Schuh Group continued to contend with a challenging U.K. retail environment in the third quarter of Fiscal 2026. 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 2026. Schuh Group's sales decreased 1% on a local currency basis for the third quarter of Fiscal 2026. Schuh Group operated 119 stores at the end of the third quarter of Fiscal 2026, compared to 122 stores at the end of the third quarter of Fiscal 2025.

Previous wording

The 590 basis point decrease in operating margin for Schuh Group for the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025 was due to a 320 basis point decrease in gross margin as a percentage of net sales, reflecting increased promotional activity, including increased loyalty redemptions and promotions to match the competitive environment, and changes in brand mix. The decreased operating margin was also due to a 270 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the second quarter of Fiscal 2026 on lower store sales, especially marketing expense, selling salaries and occupancy expense, partially offset by decreased compensation expense.

Current wording

The 210 basis point decrease in operating margin for Schuh Group for the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025 was due to a 130 basis point decrease in gross margin as a percentage of net sales, reflecting increased promotional activity to match the competitive environment, partially offset by decreased shipping and warehouse expense. The decreased operating margin was also due to an 80 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the third quarter of Fiscal 2026 on lower same store sales, especially selling salaries, professional fees and credit card expense, partially offset by decreased marketing expense.

Previous wording

Johnston & Murphy Group net sales decreased 3.2% to $68.8 million for the second quarter of Fiscal 2026 from $71.0 million for the second quarter of Fiscal 2025, primarily due to decreased wholesale sales, a decrease in same store sales and a 3% decrease in the average number of stores in the second quarter of Fiscal 2026, partially offset by increased e-commerce comparable sales. Total comparable sales for Johnston & Murphy increased 1% for the second quarter of Fiscal 2026. With positive total comparable sales for the second quarter of Fiscal 2026, we saw growth in Johnston & Murphy Group's store conversion and transaction size as customers embraced the new product assortment. Retail operations accounted for 82.3% of Johnston & Murphy Group's sales in the second quarter of Fiscal 2026, up from 80.5% in the second quarter of Fiscal 2025. The store count for Johnston & Murphy Group's retail operations at the end of the second quarter of Fiscal 2026 was 149 full-price retail and factory stores compared to 152 full-price retail and factory stores, including five stores in Canada, at the end of the second quarter of Fiscal 2025. Johnston & Murphy Group closed its five Canadian stores at the end of Fiscal 2025.

Current wording

Johnston & Murphy Group net sales increased 3.4% to $81.2 million for the third quarter of Fiscal 2026 from $78.5 million for the third quarter of Fiscal 2025, primarily due to increased wholesale sales, partially offset by a 2% decrease in comparable sales. The decline in comparable sales was primarily driven by softer e-commerce trends due to a shift in marketing spend. Retail operations accounted for 70.6% of Johnston & Murphy Group's sales in the third quarter of Fiscal 2026 versus 74.0% in the third quarter of Fiscal 2025. The store count for Johnston & Murphy Group's retail operations at the end of the third quarter of Fiscal 2026 and Fiscal 2025 was 152 full-price retail and factory stores. The store total at the end of the third quarter of Fiscal 2025 included five stores in Canada. Johnston & Murphy Group closed its five Canadian stores at the end of Fiscal 2025.

Previous wording

Genesco Brands Group's net sales increased 5.4% to $32.4 million for the second quarter of Fiscal 2026 from $30.7 million for the second quarter of Fiscal 2025 primarily due to increased sales of Levi's and private label footwear, partially offset by decreased footwear sales for Dockers and other licenses.

Current wording

Genesco Brands Group's net sales increased 3.2% to $34.6 million for the third quarter of Fiscal 2026 from $33.5 million for the third quarter of Fiscal 2025 primarily due to increased footwear sales of Dockers and private label, partially offset by decreased footwear sales of other licenses.

Previous wording

The 670 basis point decrease in operating margin for Genesco Brands Group for the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025 was primarily due to decreased gross margin as a percentage of net sales due to higher closeout sales related to the exit of certain licenses and the impact of tariffs. The decrease in operating margin was partially offset by decreased selling and administrative expenses as a percentage of net sales in the second quarter of Fiscal 2026 reflecting leverage of expenses as a result of increased revenue in the second quarter of Fiscal 2026 and decreased performance-based compensation expense, partially offset by increased royalty expense, due to a reversal of royalty expense last year resulting from an amendment to the Levi's license agreement.

Current wording

The decrease in operating margin for Genesco Brands Group for the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025 was primarily due to decreased gross margin as a percentage of net sales due to ongoing tariff pressure and higher closeout sales related to the exit of Levi's and other licenses. The decrease in operating margin was partially offset by decreased selling and administrative expenses as a percentage of net sales in the third quarter of Fiscal 2026 reflecting leverage of expenses as a result of increased revenue in the third quarter of Fiscal 2026, partially offset by increased professional fees and royalty expense.

Previous wording

Corporate and other expense for the second quarter of Fiscal 2026 was $8.3 million compared to $8.7 million for the second quarter of Fiscal 2025. Corporate expense in the second quarter of Fiscal 2026 and Fiscal 2025 included asset impairment and other charges of $0.1 million and $0.8 million, respectively, for severance and asset impairments. The corporate expense increase, excluding asset impairment and other charges, reflects increased compensation and other miscellaneous expenses, partially offset by decreased professional fees in the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025.

Current wording

Corporate and other expense for the third quarter of Fiscal 2026 was $12.6 million compared to $9.7 million for the third quarter of Fiscal 2025. Corporate expense in the third quarter of Fiscal 2026 included asset impairment and other charges of $4.3 million for store restructuring, severance and asset impairments. Corporate expense in the third quarter of Fiscal 2025 included asset impairment and other charges of $0.1 million for asset impairments. The corporate expense decrease, excluding asset impairment and other charges, reflects decreased performance-based compensation expense in the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025.

Previous wording

Net interest expense increased 8.5% to $1.5 million in the second quarter of Fiscal 2026 compared to $1.3 million in the second quarter of Fiscal 2025 primarily reflecting increased revolver borrowings in the U.K. in the second quarter of Fiscal 2026 compared to the second quarter of Fiscal 2025.

Current wording

Net interest expense decreased 27.1% to $0.9 million in the third quarter of Fiscal 2026 compared to $1.2 million in the third quarter of Fiscal 2025 primarily reflecting decreased revolver borrowings in North America, partially offset by increased revolver borrowings in the U.K. in the third quarter of Fiscal 2026 compared to the third quarter of Fiscal 2025.

Previous wording

Results of Operations – First Six Months of Fiscal 2026 Compared to First Six Months of Fiscal 2025

Current wording

Results of Operations – First Nine Months of Fiscal 2026 Compared to First Nine Months of Fiscal 2025

Previous wording

Our net sales increased 3.8% to $1.02 billion in the first six months of Fiscal 2026 compared to $982.8 million in the first six months of Fiscal 2025. The net sales increase compared to last year's first six months reflects a 5% increase in comparable sales, including a 5% increase in same store sales reflecting investment in and a strategic focus on the store channel and a 4% increase in e-commerce comparable sales, a favorable foreign exchange impact and an increase in wholesale sales, partially offset by the impact of net store closings resulting from our store optimization efforts. The Journeys Group business was strong in the first half of Fiscal 2026 with comparable sales up 9%, fueled by strength in product assortment. Schuh Group comparable sales were down 2% for the first six months of Fiscal 2026 reflecting the challenging retail environment in the U.K. Johnston & Murphy Group comparable sales were flat in the first six months of Fiscal 2026. By segment, Journeys Group sales increased 6%, Schuh Group sales increased 3% and Genesco Brands Group sales increased 6%, while Johnston & Murphy Group sales decreased 3% in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025. Schuh Group's sales decreased 2% on a local currency basis for the first six months of Fiscal 2026.

Current wording

Our net sales increased 3.6% to $1.64 billion in the first nine months of Fiscal 2026 compared to $1.58 billion in the first nine months of Fiscal 2025. The net sales increase compared to last year's first nine months reflects a 4% increase in comparable sales, including a 5% increase in same store sales reflecting investment in and a strategic focus on the store channel and a 1% increase in e-commerce comparable sales, a favorable foreign exchange impact and an increase in wholesale sales, partially offset by the impact of net store closings resulting from our store optimization efforts. The Journeys Group business was strong in the first nine months of Fiscal 2026 with comparable sales up 8%, fueled by strength in product assortment and other initiatives. Schuh Group comparable sales were down 2% for the first nine months of Fiscal 2026 reflecting the challenging retail environment in the U.K. Johnston & Murphy Group comparable sales were down 1% reflecting lower store sales in the first nine months of Fiscal 2026. By segment, Journeys Group sales increased 5%, Schuh Group sales increased 2% and Genesco Brands Group sales increased 5%, while Johnston & Murphy Group sales decreased 1% in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025. Schuh Group's sales decreased 2% on a local currency basis for the first nine months of Fiscal 2026.

Previous wording

Gross margin increased 2.0% to $471.1 million in the first six months of Fiscal 2026 from $461.9 million in the first six months of Fiscal 2025, but decreased as a percentage of net sales from 47.0% in the first six months of Fiscal 2025 to 46.2% in the first six months of Fiscal 2026 reflecting decreased gross margin as a percentage of net sales in all business units except Johnston & Murphy Group. The overall decrease in gross margin as a percentage of net sales is due primarily to increased promotional activity at Schuh Group and lower margins at Genesco Brands Group related to the exit of certain licenses and the impact from tariffs.

Current wording

Gross margin increased 1.7% to $759.8 million in the first nine months of Fiscal 2026 from $747.2 million in the first nine months of Fiscal 2025, but decreased as a percentage of net sales from 47.3% in the first nine months of Fiscal 2025 to 46.4% in the first nine months of Fiscal 2026. The overall decrease in gross margin as a percentage of net sales is due primarily to increased promotional activity at Schuh Group and lower margins at Genesco Brands Group related to the exit of Levi's and other licenses and the impact from tariffs, partially offset by decreased shipping and warehouse expense in Journeys Group and Schuh Group.

Previous wording

Selling and administrative expenses in the first six months of Fiscal 2026 increased 2.1% to $513.3 million from $503.0 million compared to the first six months of Fiscal 2025, but decreased 90 basis points as a percentage of net sales in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 from 51.2% to 50.3%. The decrease as a percentage of net sales reflects decreased occupancy and other cost savings initiatives, partially offset by increased marketing expense. By segment, selling and administrative expenses decreased as a percentage of net sales in Journeys Group and Genesco Brands Group, partially offset by increased selling and administrative expenses as a percentage of net sales in Schuh Group and Johnston & Murphy Group.

Current wording

Selling and administrative expenses in the first nine months of Fiscal 2026 increased 1.4% to $789.0 million from $777.9 million compared to the first nine months of Fiscal 2025, but decreased 110 basis points as a percentage of net sales in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 from 49.3% to 48.2%. The decrease as a percentage of net sales reflects decreased occupancy expense and other cost savings initiatives.

Previous wording

Operating margin was (4.2)% in the first six months of Fiscal 2026 compared to (4.3)% in the first six months of Fiscal 2025 reflecting improved operating margin in Journeys Group while all other business units had decreased operating margin. The overall improvement in operating margin for the first six months of Fiscal 2026 compared to the first six months 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.

Current wording

Operating margin was (2.1)% in the first nine months of Fiscal 2026 compared to (2.0)% in the first nine months of Fiscal 2025. The overall decrease in operating margin for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 primarily reflects decreased gross margin as a percentage of net sales and higher asset impairment and other charges, partially offset by decreased expenses as a percentage of net sales.

Previous wording

The pretax loss for the first six months of Fiscal 2026 was $45.7 million compared to a pretax loss of $44.8 million for the first six months of Fiscal 2025. The pretax loss for the first six months of Fiscal 2026 included asset impairment and other charges of $0.4 million for severance and asset impairments. The pretax loss for the first six 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 $1.4 million for severance and asset impairments.

Current wording

The loss from continuing operations before income taxes ("pretax loss") for the first nine months of Fiscal 2026 was $38.2 million compared to a pretax loss of $35.9 million for the first nine months of Fiscal 2025. The pretax loss for the first nine months of Fiscal 2026 included asset impairment and other charges of $4.7 million for store restructuring, severance and asset impairments. 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.

Previous wording

We had an effective income tax rate of 13.2% and 23.7% in the first six months of Fiscal 2026 and Fiscal 2025, respectively. The lower effective tax rate in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 reflects a smaller tax benefit recorded in Fiscal 2026 due to the enactment of income tax law changes under the OBBBA and their interaction with our valuation allowance in the U.S. jurisdiction.

Current wording

We had an effective income tax rate of 10.3% and (47.7)% in the first nine months of Fiscal 2026 and Fiscal 2025, respectively. The higher effective tax rate in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 reflects a $26.3 million U.S. valuation allowance recorded in the third quarter of Fiscal 2025 and the enactment of income tax law changes under the OBBBA in Fiscal 2026 and their interaction with our valuation allowance in the U.S. jurisdiction.

Previous wording

The net loss in the first six months of Fiscal 2026 was $39.7 million, or $3.82 diluted loss per share, compared to a net loss of $34.3 million, or $3.14 diluted loss per share, in the first six months of Fiscal 2025.

Current wording

The net loss in the first nine months of Fiscal 2026 was $34.3 million, or $3.31 diluted loss per share, compared to a net loss of $53.3 million, or $4.90 diluted loss per share, in the first nine months of Fiscal 2025.

Previous wording

Net sales from Journeys Group increased 5.8% to $590.8 million in the first six months of Fiscal 2026, compared to $558.3 million in the first six months of Fiscal 2025. The net sales increase compared to the first six months of Fiscal 2025 reflects a 9% increase in comparable sales, with increases in both stores and e-commerce channels, partially offset by a 5% decrease in the average number of stores in the first six months of Fiscal 2026. The increased comparable sales in the first six months of Fiscal 2026 was fueled by strength in Journeys Group's product assortment with brands across athletic and casual posting strong gains. Journeys Group drove strong gains in conversion and transaction size for the first six months this year.

Current wording

Net sales from Journeys Group increased 5.1% to $967.5 million in the first nine months of Fiscal 2026, compared to $920.8 million in the first nine months of Fiscal 2025. The net sales increase compared to the first nine months of Fiscal 2025 reflects an 8% increase in comparable sales, reflecting increased store sales, partially offset by a 5% decrease in the average number of stores in the first nine months of Fiscal 2026. The increased comparable sales in the first nine months of Fiscal 2026 was fueled by strength in Journeys Group's product assortment with brands across both casual and athletic posting strong gains and other initiatives. Journeys Group drove strong gains in conversion and transaction size for the first nine months this year.

Previous wording

The 200 basis point improvement in operating margin for Journeys Group for the first six months of Fiscal 2026 compared to the first six months 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 six months of Fiscal 2026, especially occupancy expense and selling salaries. The improvement in operating margin was partially offset by a slight decrease in gross margin as a percentage of net sales reflecting decreased initial margins as a result of changes in brand mix, which was offset by lower markdowns and decreased shipping and warehouse expense. 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.

Current wording

The 180 basis point improvement in operating margin for Journeys Group for the first nine months of Fiscal 2026 compared to the first nine months 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 nine months of Fiscal 2026, especially occupancy expense and selling salaries. The improvement in operating margin was also due to an increase in gross margin as a percentage of net sales reflecting lower markdowns and decreased shipping and warehouse expense, partially offset by 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 2.6% to $222.5 million in the first six months of Fiscal 2026 compared to $216.9 million in the first six months of Fiscal 2025. Net sales for the first six months of Fiscal 2026 includes a favorable impact of $9.1 million due to changes in foreign exchange rates and an increase in e-commerce comparable sales, partially offset by decreased same store sales. Schuh Group continued to contend with a challenging U.K. retail environment in the first six months of Fiscal 2026. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for over 40% of its sales in the first six months of Fiscal 2026. Schuh Group total comparable sales decreased 2% for the first six months of Fiscal 2026. Schuh Group's sales decreased 2% on a local currency basis for the first six months of Fiscal 2026.

Current wording

Net sales from Schuh Group increased 2.2% to $346.3 million in the first nine months of Fiscal 2026 compared to $338.7 million in the first nine months of Fiscal 2025. Net sales for the first nine months of Fiscal 2026 includes a favorable impact of $12.8 million due to changes in foreign exchange rates and an increase in e-commerce comparable sales, partially offset by decreased same store sales. Schuh Group performance was impacted by the ongoing challenging U.K. retail environment in the first nine months of Fiscal 2026. Schuh Group's e-commerce business remains a key channel for consumer engagement, accounting for over 40% of its sales in the first nine months of Fiscal 2026. Schuh Group total comparable sales decreased 2% for the first nine months of Fiscal 2026. Schuh Group's sales decreased 2% on a local currency basis for the first nine months of Fiscal 2026.

Previous wording

Operating margin decreased 350 basis points for Schuh Group for the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 due to decreased gross margin as a percentage of net sales, reflecting increased promotional activity, including increased loyalty redemptions and promotions to match the competitive environment, and changes in brand mix, partially offset by decreased shipping and warehouse expenses. In addition, selling and administrative expenses increased as a percentage of net sales, reflecting deleverage of expenses, especially occupancy expense, selling salaries and marketing expense, partially offset by decreased compensation expense.

Current wording

Operating margin decreased 290 basis points for Schuh Group for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 due to decreased gross margin as a percentage of net sales, reflecting increased promotional activity, including increased loyalty redemptions and promotions to match the competitive environment, and changes in brand mix, partially offset by decreased shipping and warehouse expenses. In addition, selling and administrative expenses increased as a percentage of net sales, reflecting deleverage of expenses, especially occupancy expense and selling salaries, partially offset by decreased compensation expense.

Previous wording

Johnston & Murphy Group net sales decreased 3.1% to $145.6 million for the first six months of Fiscal 2026 from $150.2 million for the first six months of Fiscal 2025, primarily due to decreased same store sales, decreased wholesale sales and a 3% decrease in the average number of stores in the first six months of Fiscal 2026. Total comparable sales for Johnston & Murphy Group were flat for the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025. Retail operations accounted for 77.3% of Johnston & Murphy Group's sales in the first six months of Fiscal 2026, up from 77.1% in the first six months of Fiscal 2025.

Current wording

Johnston & Murphy Group net sales decreased 0.8% to $226.8 million for the first nine months of Fiscal 2026 from $228.7 million for the first nine months of Fiscal 2025, primarily due to decreased same store sales and a 3% decrease in the average number of stores in the first nine months of Fiscal 2026, partially offset by increased wholesale sales. Total comparable sales for Johnston & Murphy Group were down 1% for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025. Retail operations accounted for 74.9% of Johnston & Murphy Group's sales in the first nine months of Fiscal 2026 versus 76.0% in the first nine months of Fiscal 2025.

Previous wording

The 220 basis point decrease in operating margin for Johnston & Murphy Group for the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 reflects increased selling and administrative expenses as a percentage of net sales for the first six months of Fiscal 2026 primarily due to the deleverage of expenses, especially depreciation and compensation expenses as a result of decreased revenue in the first six months of Fiscal 2026, as well as higher marketing expense in order to expand brand awareness. The decrease in operating margin was partially offset by an increase in gross margin as a percentage of net sales for the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 primarily due to improved initial margins, reflecting improved costs from sourcing optimization and price increases, partially offset by an increase in shipping and warehouse expense.

Current wording

The 160 basis point decrease in operating margin for Johnston & Murphy Group for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 reflects increased selling and administrative expenses as a percentage of net sales for the first nine months of Fiscal 2026 primarily due to the deleverage of expenses, especially depreciation expense as a result of decreased revenue in the first nine months of Fiscal 2026. Gross margin as a percentage of net sales for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 was flat, as better retail margins were offset by lower wholesale margins due to tariff impacts ahead of price increases in the wholesale channel, a higher mix of wholesale sales and an increase in shipping and warehouse expense.

Previous wording

Genesco Brands Group's net sales increased 6.3% to $61.0 million for the first six months of Fiscal 2026 from $57.3 million for the first six months of Fiscal 2025 primarily due to increased sales of Levi's and private label footwear, partially offset by decreased footwear sales in Dockers and other licenses.

Current wording

Genesco Brands Group's net sales increased 5.2% to $95.6 million for the first nine months of Fiscal 2026 from $90.9 million for the first nine months of Fiscal 2025 primarily due to increased sales of Levi's and private label footwear.

Previous wording

The 70 basis point decrease in operating margin for Genesco Brands Group for the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025 was primarily due to decreased gross margin as a percentage of net sales due to higher closeout sales related to the exit of certain licenses and the impact of tariffs as well as an unfavorable change in sales mix, partially offset by a $1.8 million inventory provision for a distribution model transition in the first six months of Fiscal 2025. The decrease in operating margin was partially offset by decreased selling and administrative expenses as a percentage of net sales in the first six months of Fiscal 2026 reflecting leverage of expenses as a result of increased revenue in the first six months of Fiscal 2026 and decreased performance-based compensation expense, partially offset by increased bad debt expense.

Current wording

The decrease in operating margin for Genesco Brands Group for the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025 was primarily due to decreased gross margin as a percentage of net sales due to higher closeout sales related to the exit of Levi's and other licenses and the impact of tariffs as well as an unfavorable change in sales mix, partially offset by a $1.8 million inventory provision for a distribution model transition in the first nine months of Fiscal 2025. The decrease in operating margin was partially offset by decreased selling and administrative expenses as a percentage of net sales in the first nine months of Fiscal 2026 reflecting leverage of expenses as a result of increased revenue in the first nine months of Fiscal 2026 and decreased performance-based compensation expense.

Previous wording

Corporate and other expense for the first six months of Fiscal 2026 was $16.2 million compared to $17.5 million for the first six months of Fiscal 2025. Corporate expense in the first six months of Fiscal 2026 and Fiscal 2025 included asset impairment and other charges of $0.4 million and $1.4 million, respectively, for severance and asset impairments. The corporate expense decrease, excluding asset impairment and other charges, reflects decreased professional fees and performance-based compensation expense in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025, partially offset by increased compensation and insurance expenses.

Current wording

Corporate and other expense for the first nine months of Fiscal 2026 was $28.8 million compared to $27.2 million for the first nine months of Fiscal 2025. Corporate expense in the first nine months of Fiscal 2026 included asset impairment and other charges of $4.7 million for store restructuring, severance and asset impairments. Corporate expense in the first nine months of Fiscal 2025 included asset impairment and other charges of $1.5 million for severance and asset impairments. The corporate expense decrease, excluding asset impairment and other charges, reflects decreased performance-based compensation expense and professional fees in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025, partially offset by increased compensation.

Previous wording

Net interest expense increased 25.2% to $2.8 million in the first six months of Fiscal 2026 compared to $2.2 million in the first six months of Fiscal 2025 primarily reflecting increased revolver borrowings in the U.K. and North America in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025.

Current wording

Net interest expense increased 6.8% to $3.7 million in the first nine months of Fiscal 2026 compared to $3.4 million in the first nine months of Fiscal 2025 primarily reflecting increased revolver borrowings in the U.K. and lower interest income, partially offset by decreased revolver borrowings in North America in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025.

Previous wording

Cash used in operating activities was $8.7 million higher in the first six months of Fiscal 2026 compared to the first six months of Fiscal 2025, reflecting primarily the following factors:

Current wording

Cash used in operating activities was $1.5 million lower in the first nine months of Fiscal 2026 compared to the first nine months of Fiscal 2025, reflecting primarily the following factors:

Previous wording

a $65.2 million increase in cash flow from changes in prepaids and other current assets, primarily reflecting the receipt of a $58.3 million income tax refund receivable; partially offset by

Current wording

a $63.8 million increase in cash flow from changes in prepaids and other current assets, primarily reflecting the receipt of a $58.3 million income tax refund receivable; partially offset by

Previous wording

a $48.5 million decrease in cash flow from changes in accounts payable, primarily reflecting changes in timing of rent payments and changes in buying patterns in the first six months of Fiscal 2026; and

Current wording

a $52.9 million decrease in cash flow from changes in accounts payable, primarily reflecting changes in buying patterns in the first nine months of Fiscal 2026.

Previous wording

Cash used in investing activities was $19.3 million higher for the first six months of Fiscal 2026 as compared to the first six months of Fiscal 2025 reflecting increased capital expenditures primarily related to investments in retail stores.

Current wording

Cash used in investing activities was $24.8 million higher for the first nine months of Fiscal 2026 as compared to the first nine months of Fiscal 2025 reflecting increased capital expenditures primarily related to investments in retail stores.

Previous wording

Cash provided by financing activities was $24.0 million higher in the first six months of Fiscal 2026 as compared to the first six 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.

Current wording

Cash provided by financing activities was $17.9 million higher in the first nine months of Fiscal 2026 as compared to the first nine months of Fiscal 2025 primarily reflecting increased net borrowings.