GENESCO INC

Summary of Significant Accounting Policies

Basis of Presentation

These Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements and Notes for Fiscal 2026, which are contained in our Annual Report on Form 10-K as filed with the SEC on March 25, 2026. The Condensed Consolidated Financial Statements and Notes contained in this report are unaudited but reflect all adjustments, including normal recurring adjustments, necessary for a fair presentation of the results for the interim periods of the fiscal year ending January 30, 2027 ("Fiscal 2027") and of the fiscal year ended January 31, 2026 ("Fiscal 2026"), both of which are 52-week fiscal years. All subsidiaries are consolidated in the Condensed Consolidated Financial Statements. All significant intercompany transactions and accounts have been eliminated. The results of operations for any interim period are not necessarily indicative of results for the full year. The Condensed Consolidated Financial Statements and the related Notes have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and notes required by U.S. Generally Accepted Accounting Principles (“GAAP”) for complete financial statements. The Condensed Consolidated Balance Sheet as of January 31, 2026 has been derived from the audited financial statements at that date.

Nature of Operations

Genesco Inc. and its subsidiaries (collectively the "Company", "Genesco," "we", "our", or "us") business includes the sourcing and design, marketing and distribution of footwear, apparel and accessories through retail stores in the U.S., Puerto Rico and Canada primarily under the Journeys®, Journeys Kidz®, Little Burgundy® and Johnston & Murphy® banners and under the Schuh® banner in the United Kingdom (“U.K.”) and the Republic of Ireland (“ROI”); through e-commerce websites including the following: journeys.com, journeyskidz.com, journeys.ca, littleburgundyshoes.com, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com and nashvilleshoewarehouse.com as well as the Johnston & Murphy catalog. We also source, design, market and distribute footwear, apparel and accessories at wholesale, primarily under our Johnston & Murphy brand, the licensed Dockers® brand, the licensed Wrangler® brand, and other brands that we license for footwear. At May 2, 2026, we operated 1,208 retail stores in the U.S., Puerto Rico, Canada, the U.K. and the ROI.

During the three months ended May 2, 2026 and May 3, 2025, we operated four reportable business segments (not including corporate): (i) Journeys Group, comprised of the Journeys, Journeys Kidz and Little Burgundy retail footwear chains and e-commerce operations; (ii) Schuh Group, comprised of the Schuh retail footwear chain and e-commerce operations; (iii) Johnston & Murphy Group, comprised of Johnston & Murphy retail operations, e-commerce operations and wholesale distribution of products under the Johnston & Murphy brand; and (iv) Genesco Brands Group, comprised of the licensed Dockers and Wrangler brands, as well as other brands we license for footwear. During Fiscal 2026, we signed a multi-year licensing agreement with Kontoor Brands, Inc. to design, source, market and distribute footwear under the Wrangler® brand ("Wrangler"). We expect to launch the first Wrangler footwear collection in the Fall of calendar year 2026. The Levi's license expired in May 2026 and the exit of that business is almost complete.

Selling and Administrative Expenses

Wholesale costs of distribution are included in selling and administrative expenses on the Condensed Consolidated Statements of Operations in the amount of$2.0 million and$2.7 million for the first quarters of Fiscal 2027 and Fiscal 2026, respectively.

Retail occupancy costs recorded in selling and administrative expenses were$74.1 million and$73.4 million for the first quarters of Fiscal 2027 and Fiscal 2026, respectively.

Advertising Costs

Advertising costs included in selling and administrative expenses were$25.5 million and$24.2 million for the first quarters of Fiscal 2027 and Fiscal 2026, respectively.

Vendor Allowances

Vendor reimbursements of cooperative advertising costs recognized as a reduction of selling and administrative expenses were$3.3 million and$3.6 million for the first quarters of Fiscal 2027 and Fiscal 2026, respectively. During the first three months of each of Fiscal 2027 and Fiscal 2026, our cooperative advertising reimbursements received were not in excess of the costs incurred.

Note 1

Summary of Significant Accounting Policies, Continued

New Accounting Pronouncements

We continuously monitor and review all current accounting pronouncements and standards from the Financial Accounting Standards Board of U.S. GAAP for applicability to our operations and financial reporting. As of May 2, 2026, there were no other new pronouncements or interpretations, other than those disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2026, that had or were expected to have a significant impact on our financial reporting.

Recent Tax Legislation

On July 4, 2025, H.R. 1, a bill to provide for reconciliation pursuant to title II of H. Con. Res. 14, informally known as the One Big Beautiful Bill Act ("OBBBA"), which includes several measures affecting corporations and other business entities, was signed into law. Among these measures, the OBBBA modifies and permanently extends certain expiring provisions of the 2017 Tax Cuts and Jobs Act (“TCJA”), including the restoration of 100% bonus depreciation, which was scheduled to phase out in 2027 under the TCJA. The OBBBA also permits immediate expensing of research and development expenditures previously capitalized under the TCJA and modifies various components of the international tax framework. The OBBBA has multiple effective dates, with some provisions taking effect in 2025 and others phased in through 2027. In accordance with Accounting Standards Codification (“ASC”) 740,“Income Taxes,” we recognized effects of the OBBBA during the second quarter of Fiscal 2026 for the provisions enacted at that point in time. For the fiscal year ended January 31, 2026, we had a material decrease in both the current tax liability and the effective income tax rate as a result of the enactment of income tax law changes under the OBBBA and their interaction with our valuation allowance in the United States. Including the impact of the OBBBA tax law changes, we recorded an effective income tax rate of 6.8% in the first three months of Fiscal 2027.

Note 2

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the Journeys Group segment were as follows:

Other intangibles by major classes were as follows:

Note 3

Inventories

Note 4

Fair Value

Fair Value of Financial Instruments

The carrying amounts and fair values of our financial instruments at May 2, 2026 and January 31, 2026 are:

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

As of May 2, 2026, we had$7.0 million of investments held and used which were measured using Level 1 inputs within the fair value hierarchy.

Note 5

Long-Term Debt

The revolver borrowings outstanding under the Fourth Amended and Restated Credit Agreement dated as of January 31, 2018, as amended, between us, certain of our subsidiaries, the lenders party thereto and Bank of America, N.A. as agent (the "Credit Facility") as of May 2, 2026 included (i)$15.0 million U.S. revolver borrowings and (ii)$7.9 million (CAD$10.8 million) revolver borrowings related to GCO Canada ULC. In addition, we had revolver borrowings outstanding by and between Schuh and Lloyds Bank PLC (the "Facility Agreement") of$22.4 million (£16.5 million) as of May 2, 2026. We were in compliance with all the relevant terms and conditions of the Credit Facility and Facility Agreement as of May 2, 2026. Excess availability under the Credit Facility was$303.3 million at May 2, 2026.

Note 6

Earnings Per Share

Weighted-average number of shares used to calculate earnings per share are as follows:

Common stock equivalents of 0.2 million shares are excluded for the three months ended May 2, 2026 and May 3, 2025 due to the loss from continuing operations in those periods.

We didnot repurchase any shares of our common stock during the first quarter of Fiscal 2027. 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 cost of$20.79 per share. As of May 2, 2026, we had$29.8 million remaining under our expanded share repurchase authorization announced in June 2023. During the second quarter of Fiscal 2027, through June 10, 2026, we have not repurchased any shares of our common stock.

Note 7

Legal Proceedings

Environmental Matters

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

Accrual for Environmental Contingencies

Related to all outstanding environmental contingencies, we hadaccrued $1.9 million as of May 2, 2026,$1.9 million as of January 31, 2026 and$2.1 million as of May 3, 2025. All such provisions reflect our estimates of the most likely cost (undiscounted, including both current and noncurrent portions) of resolving the contingencies, based on facts and circumstances as of the time they were made. There is no assurance that relevant facts and circumstances will not change, necessitating future changes to the provisions. Such contingent liabilities for discontinued operations are included in other accrued liabilities and other long-term liabilities on the accompanying Condensed Consolidated Balance Sheets because they relate to former facilities operated by us. We have made pretax accruals for certain of these contingencies which were not material for the first quarter of Fiscal 2027 or Fiscal 2026. These charges are included in loss from discontinued operations, net of tax in the Condensed Consolidated Statements of Operations and represent changes in estimates.

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

Interchange Fee Settlement

In February 2026, we entered into settlement agreements to resolve credit card interchange fee litigation matters in which we were a plaintiff. During the first quarter of Fiscal 2027, as a result of these lump-sum settlements, we received$13.4 million (net of legal fees) related to payment card interchange fee litigation. This gain is reflected in asset impairments and other, net on the Consolidated Statement of Operations in our Condensed Consolidated Financial Statements.

IEEPA Tariff Refunds

On February 20, 2026, the U.S. Supreme Court issued a ruling striking down certain tariffs imposed under the International Emergency Economic Powers Act (“IEEPA”). Subsequently, on March 4, 2026, the U.S. Court of International Trade ordered U.S. Customs and Border Protection (“CBP”) to liquidate all non-final entries without regard to IEEPA duties and to refund amounts previously collected, including applicable interest. Additionally, on April 20, 2026, CBP launched Phase 1 of the new Consolidated Administration and Processing of Entries tool in the Automated Commercial Environment portal, creating a process for submitting IEEPA refund claims. We successfully submitted our refund claim in the first quarter of Fiscal 2027. We expect to receive tariff refunds of approximately$23 to$25 million, not including interest, related to our branded businesses. The timing of cash receipts is dependent upon the execution of the refund process by CBP and the U.S. Treasury Department. We will use the gain contingency method to recognize the gain when funds are received. To date, we have received$1.5 million in the second quarter of Fiscal 2027 related to these tariff refunds.

Note 8

Business Segment Information

Our reportable segments are based on management’s organization of the segments in order to make operating decisions and assess performance along types of products sold. Journeys Group and Schuh Group sell primarily branded products from other companies while Johnston & Murphy Group and Genesco Brands Group sell primarily our owned and licensed brands. Our chief operating decision maker ("CODM") is our President and Chief Executive Officer. The CODM assesses performance of and allocates resources to each business segment based on segment results without allocating corporate expenses. These corporate expenses include corporate overhead, bank fees, interest expense, interest income, goodwill impairment, asset impairment charges and other, including severance, insurance gains, major litigation and major lease terminations. Reconciling items between segment operating income (loss) and earnings (loss) from continuing operations consist of unallocated corporate expenses. The CODM uses segment operating income (loss) as a measure of profit or loss.

(1) Net sales in North America and in the U.K., which includes the ROI, accounted for 81% and 19%, respectively, of our net sales in the first quarter of Fiscal 2027.

(2) Asset impairments and other includes a$13.4 million gain related to payment card interchange fee litigation, partially offset by a$3.0 million charge for store restructuring, including$2.9 million in Journeys Group and$0.1 million in Schuh Group, a$0.2 million charge for costs associated with information technology transformation and a$0.1 million charge for severance.

(1) Of our$725.4 million of long-lived assets as of May 2, 2026,$87.8 million and$14.5 million relate to long-lived assets in the U.K. and Canada, respectively.

Note 8

Business Segment Information, Continued

(1) Net sales in North America and in the U.K., which includes the ROI, accounted for 80% and 20%, respectively, of our net sales for the first quarter of Fiscal 2026.

(2) Asset impairments and other includes a$0.3 million charge for severance.

(1) Of our$709.0 million of long-lived assets as of May 3, 2025,$99.1 million and$14.1 million relate to long-lived assets in the U.K. and Canada, respectively.