GENESCO INC
For the period ended Aug 1, 2026. Filed Sep 10, 2026.
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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.
Aug 1, 2026 · Filed Sep 10, 2026
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 2026-05-02; filed 2026-06-11.
0001193125-26-266889
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-01; filed 2026-09-10.
0001193125-26-387556
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 59 previous paragraphs and 85 current paragraphs.
28 unchanged; 30 reworded; 21 added; 1 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 5 previous and 9 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 (21)
Current report
Gross margin increased 8.9% to $272.1 million in the second quarter of Fiscal 2027 from $249.9 million in the second quarter of Fiscal 2026 and increased 560 basis points as a percentage of net sales from 45.8% in the second quarter of Fiscal 2026 to 51.4% in the second quarter of Fiscal 2027. The overall increase in gross margin as a percentage of net sales in the second quarter of Fiscal 2027 is due primarily to tariff refunds of $21.8 million, less promotional activity and higher full-price selling at Schuh Group, favorable changes in sales mix, the license exit benefit and tariff mitigation actions across our branded businesses.
Current report
Selling and administrative expenses in the second quarter of Fiscal 2027 decreased 1.8% to $259.6 million from $264.3 million compared to the second quarter of Fiscal 2026. Selling and administrative expenses increased 60 basis points as a percentage of net sales in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 from 48.4% to 49.0% as a result of the sales decline. The increase as a percentage of net sales reflects increased occupancy and performance-based compensation expense, partially offset by decreased selling salaries, marketing expenses and other ongoing cost savings initiatives.
Current report
Earnings from continuing operations before income taxes (“pretax earnings”) for the second quarter of Fiscal 2027 was $3.4 million compared to a loss from continuing operations before income taxes ("pretax loss") of $16.0 million for the second quarter of Fiscal 2026. Pretax earnings for the second quarter of Fiscal 2027 included an asset impairment and other charge of $8.9 million which included a $6.9 million charge for costs related to proxy contest, a $1.0 million charge for other legal matters, a $0.4 million charge for costs associated with information technology transformation, a $0.5 million charge for severance and other restructuring and a $0.1 million charge for store restructuring. The pretax loss for the second quarter of Fiscal 2026 included asset impairment and other charges of $0.1 million for severance.
Current report
We had an effective income tax rate of (2.5)% and (15.0)% in the second quarter of Fiscal 2027 and Fiscal 2026, respectively. The higher effective tax rate in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 is primarily a result of the impact of the OBBBA in the second quarter of Fiscal 2026 which did not have a recurring impact in the second quarter of Fiscal 2027, as well as the impact of the valuation allowance in certain jurisdictions on our effective tax rate as a result of changes in the mix of earnings and losses among jurisdictions.
Current report
Net earnings in the second quarter of Fiscal 2027 were $3.5 million, or $0.32 diluted earnings per share, compared to a net loss of $18.5 million, or $1.79 diluted loss per share, in the second quarter of Fiscal 2026.
Current report
Results of Operations – Second Quarter of Fiscal 2027 Compared to Second Quarter of Fiscal 2026
Current report
Net sales from Journeys Group were essentially flat at $317.8 million in the second quarter of Fiscal 2027 compared to $318.2 million in the second quarter of Fiscal 2026. Journeys net sales for the second quarter of Fiscal 2027 reflects a 2% increase in comparable sales, with increases in both stores and e-commerce channels, and higher sales from enlarged stores, offset by a 5% decrease in the average number of stores in the second quarter of Fiscal 2027. The increased comparable sales in the second quarter of Fiscal 2027 was driven by the strong performance of our 4.0 store remodels and other initiatives as well as elevated product assortment across athletic and casual, achieving higher average transaction size and more full-price selling.
Current report
Corporate and other expense for the second quarter of Fiscal 2027 was $16.9 million compared to $8.3 million for the second quarter of Fiscal 2026. Corporate expense in the second quarter of Fiscal 2027 included asset impairment and other charges of $8.9 million which included costs related to proxy contest, legal and other matters, costs associated with information technology transformation, severance and other restructuring and store restructuring. Corporate expense in the second quarter of Fiscal 2026 included asset impairment and other charges of $0.1 million for severance. The corporate expense decrease, excluding asset impairment and other charges, primarily reflects decreased compensation expense partially offset by additional information technology transformation expenses in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026.
Current report
Net interest decreased $1.5 million from $1.5 million in the second quarter of Fiscal 2026 to essentially zero net interest in the second quarter of Fiscal 2027 primarily reflecting decreased revolver borrowings in North America in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 and increased interest income in the second quarter of Fiscal 2027 as a result of $0.7 million in interest income on tariff refunds during the second quarter this year.
Current report
Our net sales were flat at $1.0 billion in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026. Net sales for the first six months this year reflects 67 net fewer stores than a year ago resulting from our ongoing footprint optimization, a 3% decrease in e-commerce comparable sales reflecting our prioritization of full-price selling at Schuh Group, and decreased wholesale sales primarily due to license exits, offset by a 2% increase in same store sales, higher sales from enlarged stores and a favorable foreign exchange impact. The Journeys Group business had a strong first six months of Fiscal 2027 with comparable sales up 3% on top of a 9% increase last year, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the first six months of Fiscal 2027 reflecting our decision to prioritize full-price selling. Johnston & Murphy Group also had a strong first six months with comparable sales up 5% in the first six months of Fiscal 2027, driven by increased store sales due to strength in product assortment, both in apparel and footwear, benefitting from increased brand awareness through marketing and social media campaigns. By segment, Journeys Group sales increased 2%, Schuh Group sales decreased 8%, Johnston & Murphy Group sales increased 6% and Genesco Brands Group sales decreased 9% in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026. Schuh Group's sales decreased 9% on a local currency basis for the first six months of Fiscal 2027.
Current report
Selling and administrative expenses in the first six months of Fiscal 2027 were essentially flat at $514.0 million compared to $513.3 million in the first six months of Fiscal 2026, but increased 20 basis points as a percentage of net sales in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 from 50.3% to 50.5%. The increase as a percentage of net sales reflects increased performance-based compensation expense and costs associated with information technology transformation, partially offset by decreased selling salaries and other expenses as a result of our ongoing cost savings initiatives.
Current report
Operating margin was (1.2)% in the first six months of Fiscal 2027 compared to (4.2)% in the first six months of Fiscal 2026. The overall improvement in operating margin for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 primarily reflects increased gross margin as a percentage of net sales and a net gain in asset impairment and other charges, partially offset by a small increase in selling and administrative expenses as a percentage of net sales.
Current report
Journeys Group
Current report
Schuh Group
Current report
Johnston & Murphy Group
Current report
Johnston & Murphy Group net sales increased 5.6% to $153.9 million for the first six months of Fiscal 2027 from $145.6 million for the first six months of Fiscal 2026. The net sales increase for the first six months of Fiscal 2027 includes a 5% increase in comparable sales, reflecting increased store sales, and a 3% increase in the average number of stores in the first six months of Fiscal 2027, partially offset by decreased wholesale sales. The performance of the Johnston & Murphy Group product assortment, both apparel and footwear, as a result of new and improved product offerings and increased brand awareness through marketing and social media campaigns contributed to increased sales in the first six months of Fiscal 2027. Retail operations accounted for 79.1% of Johnston & Murphy Group's sales in the first six months of Fiscal 2027, up from 77.3% in the first six months of Fiscal 2026.
Current report
The significant improvement in operating margin for Johnston & Murphy Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 53.8% in the first six months last year to 63.4% in the first six months this year reflecting tariff refunds of $13.3 million for the Johnston & Murphy Group, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense. In addition, selling and administrative expenses as a percentage of net sales decreased 60 basis points for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 reflecting leverage of expenses, especially decreased marketing expense, partially offset by increased performance-based incentive compensation expense.
Current report
Genesco Brands Group
Current report
The improvement in operating margin for Genesco Brands Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 27.8% in the first six months last year to 47.9% in the first six months this year reflecting tariff refunds of $8.5 million for the Genesco Brands Group, tariff mitigation efforts, higher closeout sales in the first six months of Fiscal 2026 related to the exit of certain licenses and a favorable change in sales mix. Selling and administrative expenses increased as a percentage of net sales from 25.5% in the first six months last year to 30.3% in the first six months this year. The increase reflects deleverage of expenses as a result of decreased revenue in the first six months of Fiscal 2027, especially increased royalty expense, performance-based compensation expense and other compensation expense, partially offset by decreased shipping and warehouse and freight expenses.
Current report
a $52.3 million decrease in cash flow from changes in prepaids and other current assets, primarily reflecting the receipt of a $58.3 million income tax refund receivable in the first six months of Fiscal 2026; and
Current report
a $28.4 million increase in net earnings primarily due to the $22.5 million tariff refund, including interest, in the first six months of Fiscal 2027; and
Removed paragraphs (1)
Previous report
Selling and administrative expenses in the first quarter of Fiscal 2027 increased 2.2% to $254.4 million from $249.0 million compared to the first quarter of Fiscal 2026, but decreased 30 basis points as a percentage of net sales in the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 from 52.5% to 52.2%. The decrease as a percentage of net sales reflects decreased selling salaries, occupancy, freight and warehouse expenses as well as ongoing cost savings initiatives, partially offset by increased performance-based incentive compensation expenses.
Reworded paragraphs (30)
Previous wording
Our net sales increased 2.8% to $487.0 million in the first quarter of Fiscal 2027 compared to $474.0 million in the first quarter of Fiscal 2026. The net sales increase compared to last year's first quarter reflects a 2% increase in comparable sales, including a 3% increase in same store sales, other non-comparable gains and a favorable foreign exchange impact, partially offset by the impact of net store closings resulting from our ongoing footprint optimization. The Journeys Group business had a strong first quarter of Fiscal 2027 with comparable sales up 5%, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the first quarter of Fiscal 2027 reflecting a weaker U.K. consumer market and our decision to prioritize full-price selling. Johnston & Murphy Group comparable sales were up 7% in the first quarter of Fiscal 2027 driven by increased store and e-commerce sales driven by strength in product assortment, both apparel and footwear, as a result of increased brand awareness through marketing and social media campaigns. By segment, Journeys Group sales increased 5%, Schuh Group sales decreased 5%, Johnston & Murphy Group sales increased 6% and Genesco Brands Group sales increased 4% in the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026. Schuh Group's sales decreased 9% on a local currency basis for the first quarter of Fiscal 2027.
Current wording
Our net sales decreased 3.0% to $529.9 million in the second quarter of Fiscal 2027 compared to $546.0 million in the second quarter of Fiscal 2026. The net sales decrease compared to last year's second quarter reflects the impact of net store closings resulting from our ongoing footprint optimization, decreased sales in Genesco Brands Group as we exited licenses, a 6% decrease in e-commerce comparable sales reflecting our prioritization of full-price selling at Schuh Group and an unfavorable foreign exchange impact, partially offset by a 1% increase in same store sales and higher sales from enlarged stores. The Journeys Group business had a strong second quarter of Fiscal 2027 with comparable sales up 2% on top of a 5% comparable gain last year, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the second quarter of Fiscal 2027 reflecting our decision to prioritize full-price selling over discounts and promotions. Johnston & Murphy Group also had a strong second quarter of Fiscal 2027 with comparable sales up 4% in the second quarter of Fiscal 2027 driven by increased store sales due to new and improved product assortments, both in apparel and footwear, benefitting from brand awareness through marketing and social media campaigns. By segment, Journeys Group sales were flat, Schuh Group sales decreased 10%, Johnston & Murphy Group sales increased 5% and Genesco Brands Group sales decreased 21% or $6.7 million in the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026. Schuh Group's sales decreased 10% on a local currency basis for the second quarter of Fiscal 2027.
Previous wording
Operating margin was (3.2)% in the first quarter of Fiscal 2027 compared to (5.9)% in the first quarter of Fiscal 2026. The overall improvement in operating margin for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 primarily reflects increased sales, increased gross margin as a percentage of net sales, decreased expenses as a percentage of net sales and a net gain in asset impairment and other charges.
Current wording
Operating margin was 0.7% in the second quarter of Fiscal 2027 compared to (2.6)% in the second quarter of Fiscal 2026. The overall improvement in operating margin for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 primarily reflects increased gross margin as a percentage of net sales, partially offset by a net loss of $8.9 million in asset impairment and other charges and deleverage in expenses as a percentage of net sales.
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 January 31, 2026. 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 January 31, 2026. There have been no significant changes in our definition of significant accounting policies or critical accounting estimates since the end of Fiscal 2026.
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 January 31, 2026. 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
Previous wording
We closed 25 Journeys Group stores in the first quarter of Fiscal 2027. Journeys Group operated 940 stores at the end of the first quarter of Fiscal 2027, including 189 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 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.
Current wording
We closed 17 Journeys Group stores in the second quarter of Fiscal 2027. Journeys Group operated 924 stores at the end of the second quarter of Fiscal 2027, including 176 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 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.
Previous wording
The 160 basis point improvement in operating margin for Journeys Group for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 was primarily due to a 190 basis point decrease in selling and administrative expenses as a percentage of net sales. This improvement reflects leverage of expenses as a result of increased revenue in the first quarter of Fiscal 2027, especially selling salaries and occupancy expense, partially offset by increased marketing expense. The increase in operating margin was partially offset by a 30 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns. 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 140 basis point improvement in operating margin for Journeys Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to a 180 basis point decrease in selling and administrative expenses as a percentage of net sales. This improvement reflects leverage of expenses in the second quarter of Fiscal 2027, especially decreased selling salaries, marketing expense and other expenses and demonstrates the impact of our productivity efforts, cost savings initiatives and closing underperforming stores. The increase in operating margin was partially offset by a 40 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns.
Previous wording
Net sales from Schuh Group decreased 5.4% to $90.7 million in the first quarter of Fiscal 2027 compared to $95.9 million in the first quarter of Fiscal 2026. The net sales decrease for the first quarter of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, and a 7% decrease in the average number of stores in the first quarter of Fiscal 2027, partially offset by a favorable impact of $3.7 million due to changes in foreign exchange rates. We prioritized more full-priced selling and controlled markdowns in Schuh Group during the first quarter of Fiscal 2027 but this pressured store traffic in an already weaker U.K. consumer market and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 9% on a local currency basis for the first quarter of Fiscal 2027. Schuh Group operated 114 stores at the end of the first quarter of Fiscal 2027, compared to 121 stores at the end of the first quarter of Fiscal 2026.
Current wording
Net sales from Schuh Group decreased 10.1% to $113.8 million in the second quarter of Fiscal 2027 compared to $126.6 million in the second quarter of Fiscal 2026. The net sales decrease for the second quarter of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, a 7% decrease in the average number of stores in the second quarter of Fiscal 2027 and an unfavorable impact of $0.6 million due to changes in foreign exchange rates. We prioritized more full-priced selling over discounts and promotions in Schuh Group during the second quarter of Fiscal 2027 but this pressured sales in stores and online and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 10% on a local currency basis for the second quarter of Fiscal 2027. Schuh Group operated 109 stores at the end of the second quarter of Fiscal 2027, compared to 120 stores at the end of the second quarter of Fiscal 2026.
Previous wording
Johnston & Murphy Group net sales increased 5.8% to $81.3 million for the first quarter of Fiscal 2027 from $76.8 million for the first quarter of Fiscal 2026. The net sales increase for the first quarter of Fiscal 2027 includes a 7% increase in comparable sales, reflecting increased store sales, and a 4% increase in the average number of stores in the first quarter of Fiscal 2027, partially offset by decreased wholesale sales. The performance of Johnston & Murphy's product assortment, both apparel and footwear, as a result of an updated product offering and increased brand awareness through marketing and social media campaigns contributed to increased store and e-commerce sales in the first quarter of Fiscal 2027. Retail operations accounted for 75.6% of Johnston & Murphy Group's sales in the first quarter of Fiscal 2027, up from 72.8% in the first quarter of Fiscal 2026. The store count for Johnston & Murphy Group's retail operations at the end of the first quarter of Fiscal 2027 was 154 Johnston & Murphy full-price retail and factory stores, compared to 146 Johnston & Murphy full-price retail and factory stores at the end of the first quarter of Fiscal 2026.
Current wording
Johnston & Murphy Group net sales increased 5.5% to $72.5 million for the second quarter of Fiscal 2027 from $68.8 million for the second quarter of Fiscal 2026. The net sales increase for the second quarter of Fiscal 2027 includes a 4% increase in comparable sales, reflecting increased store sales, a 3% increase in the average number of stores in the second quarter of Fiscal 2027 and increased wholesale sales, partially offset by decreased e-commerce comparable sales reflecting fewer catalog drops. The performance of Johnston & Murphy's product assortment, both apparel and footwear, as a result of new and improved product offerings and increased brand awareness through marketing and social media campaigns contributed to increased store sales in the second quarter of Fiscal 2027. Retail operations accounted for 83.0% of Johnston & Murphy Group's sales in the second quarter of Fiscal 2027, up from 82.3% in the second quarter of Fiscal 2026. The store count for Johnston & Murphy Group's retail operations at the end of the second quarter of Fiscal 2027 was 153 Johnston & Murphy full-price retail and factory stores, compared to 149 Johnston & Murphy full-price retail and factory stores at the end of the second quarter of Fiscal 2026.
Previous wording
The 120 basis point improvement in operating margin for Johnston & Murphy Group for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 was primarily due to an 80 basis point increase in gross margin as a percentage of net sales due to lower markdowns, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense, partially offset by tariff pressure. In addition, selling and administrative expenses as a percentage of net sales decreased 40 basis points for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 reflecting leverage of expenses, especially marketing and freight expense, partially offset by increased performance-based incentive compensation expenses.
Current wording
The significant improvement in operating margin for Johnston & Murphy Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 54.0% last year to 73.5% in the second quarter this year reflecting tariff refunds of $13.3 million for the Johnston & Murphy Group, tariff mitigation actions, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense, partially offset by increased retail markdowns. In addition, selling and administrative expenses as a percentage of net sales decreased 90 basis points for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 reflecting leverage of expenses, especially marketing and credit card expense, partially offset by increased performance-based incentive compensation expense, selling salaries and occupancy expense.
Previous wording
The 150 basis point improvement in operating margin for Genesco Brands Group for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 was primarily due to decreased selling and administrative expenses as a percentage of net sales. The decrease reflects leverage of expenses as a result of increased revenue in the first quarter of Fiscal 2027, especially decreased shipping and warehouse and freight expenses, partially offset by increased royalty expenses. Also contributing to the improvement in operating margin is an increase in gross margin as a percentage of net sales due to a favorable change in sales mix and the reversal of an inventory write-down related to the exit of licenses, partially offset by tariff pressure.
Current wording
The improvement in operating margin for Genesco Brands Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was primarily due to increased gross margin as a percentage of net sales from 25.3% last year to 67.4% in the second quarter this year reflecting tariff refunds of $8.5 million for the Genesco Brands Group, tariff mitigation efforts, higher closeout sales in the second quarter of Fiscal 2026 related to the exit of certain licenses and a favorable change in sales mix. Selling and administrative expenses increased as a percentage of net sales from 23.2% last year to 33.8% in the second quarter this year. The increase reflects deleverage of expenses as a result of decreased revenue in the second quarter of Fiscal 2027, especially increased performance-based compensation expense, other compensation expenses and royalty expense.
Previous wording
Results of Operations – First Quarter of Fiscal 2027 Compared to First Quarter of Fiscal 2026
Current wording
Results of Operations – First Six Months of Fiscal 2027 Compared to First Six Months of Fiscal 2026
Previous wording
Gross margin increased 3.5% to $228.9 million in the first quarter of Fiscal 2027 from $221.2 million in the first quarter of Fiscal 2026 and increased 30 basis points as a percentage of net sales from 46.7% in the first quarter of Fiscal 2026 to 47.0% in the first quarter of Fiscal 2027. The overall increase in gross margin as a percentage of net sales is due primarily to efficiencies in shipping and warehouse costs and less promotional activity across our businesses, partially offset by changes in brand mix at Journeys Group and Schuh Group.
Current wording
Gross margin increased 6.3% to $501.0 million in the first six months of Fiscal 2027 from $471.1 million in the first six months of Fiscal 2026 and increased 310 basis points as a percentage of net sales from 46.2% in the first six months of Fiscal 2026 to 49.3% in the first six months of Fiscal 2027. The overall increase in gross margin as a percentage of net sales is due primarily to increased wholesale gross margin reflecting tariff refunds, less promotional activity and higher full-price selling at Schuh Group and favorable changes in sales mix.
Previous wording
The loss from continuing operations before income taxes (“pretax loss”) for the first quarter of Fiscal 2027 was $15.9 million compared to $29.7 million for the first quarter of Fiscal 2026. The pretax loss for the first quarter of Fiscal 2027 included an asset impairment and other gain of $10.1 million which included a gain of $13.4 million related to payment card interchange fee litigation, partially offset by a $3.0 million charge for store restructuring, a $0.2 million charge for costs associated with information technology transformation and a $0.1 million charge for severance. Pretax loss for the first quarter of Fiscal 2026 included asset impairment and other charges of $0.3 million for severance.
Current wording
The pretax loss for the first six months of Fiscal 2027 was $12.5 million compared to $45.7 million for the first six months of Fiscal 2026. The pretax loss for the first six months of Fiscal 2027 included an asset impairment and other gain of $1.2 million which included a gain of $13.4 million related to payment card interchange fee litigation, partially offset by a $6.9 million charge for costs related to proxy contest, a $3.1 million charge for store restructuring, a $1.0 million charge for other legal matters, a $0.6 million charge for costs associated with information technology transformation and a $0.6 million charge for severance and other restructuring. The pretax loss for the first six months of Fiscal 2026 included asset impairment and other charges of $0.4 million for severance.
Previous wording
We had an effective income tax rate of 6.8% and 28.5% in the first quarter of Fiscal 2027 and Fiscal 2026, respectively. The lower effective tax rate in the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 primarily reflects a lower expected tax rate for Fiscal 2027 versus our expectation for Fiscal 2026 as of the prior year first quarter due to the impact of the valuation allowance in certain jurisdictions combined with the income tax law changes from the OBBBA.
Current wording
We had an effective income tax rate of 9.3% and 13.2% in the first six months of Fiscal 2027 and Fiscal 2026, respectively. The lower effective tax rate in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 primarily reflects a lower estimated annual effective tax rate for Fiscal 2027 versus our expectation for Fiscal 2026 as of the prior year first six months due to the impact of the valuation allowance in certain jurisdictions and changes in the mix of earnings and losses among jurisdictions.
Previous wording
The net loss in the first quarter of Fiscal 2027 was $14.8 million, or $1.42 diluted loss per share, compared to a net loss of $21.2 million, or $2.02 diluted loss per share, in the first quarter of Fiscal 2026.
Current wording
The net loss in the first six months of Fiscal 2027 was $11.3 million, or $1.08 diluted loss per share, compared to a net loss of $39.7 million, or $3.82 diluted loss per share, in the first six months of Fiscal 2026.
Previous wording
Net sales from Journeys Group increased 4.7% to $285.3 million in the first quarter of Fiscal 2027, compared to $272.6 million in the first quarter of Fiscal 2026. The net sales increase compared to the first quarter of Fiscal 2026 reflects a 5% increase in comparable sales, with increases in both stores and e-commerce channels, and other non-comparable gains, partially offset by a 4% decrease in the average number of stores in the first quarter of Fiscal 2027. The increased comparable sales in the first quarter of Fiscal 2027 was driven by the continued strength in Journeys Group's product assortment with brands across athletic and casual achieving healthy growth. Journeys Group's strong store performance was driven by gains in conversion and higher average transaction size in the first quarter of Fiscal 2027.
Current wording
Net sales from Journeys Group increased 2.1% to $603.2 million in the first six months of Fiscal 2027, compared to $590.8 million in the first six months of Fiscal 2026. The net sales increase compared to the first six months of Fiscal 2026 reflects a 3% increase in comparable sales, with increases in both stores and e-commerce channels, and higher sales from enlarged stores, partially offset by a 5% decrease in the average number of stores in the first six months of Fiscal 2027. The increased comparable sales in the first six months of Fiscal 2027 was driven by the strong performance of our 4.0 store remodels and other initiatives as well as the continued strength in Journeys Group's product assortment with brands across athletic and casual achieving healthy growth.
Previous wording
The 130 basis point decrease in operating margin for Schuh Group for the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 was due to a 250 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the first quarter of Fiscal 2027, especially selling salaries, compensation, professional fees and occupancy expense, partially offset by decreased marketing expense. The decrease in operating margin was partially offset by a 120 basis point increase in gross margin as a percentage of net sales, reflecting lower shipping and warehouse costs and decreased promotional activity, partially offset by changes in brand mix. In addition, the operating loss included an unfavorable impact of $0.4 million due to changes in foreign exchange rates compared to last year.
Current wording
The 80 basis point decrease in operating margin for Schuh Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was due to a 310 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the first six months of Fiscal 2027 as a result of lower revenue. The decrease in operating margin was partially offset by a 220 basis point increase in gross margin as a percentage of net sales, reflecting decreased promotional activity and more full-priced selling and lower shipping and warehouse expense. In addition, the operating loss included an unfavorable impact of $0.4 million due to changes in foreign exchange rates compared to the first six months of Fiscal 2026.
Previous wording
Genesco Brands Group's net sales increased 3.9% to $29.7 million for the first quarter of Fiscal 2027 from $28.6 million for the first quarter of Fiscal 2026 primarily due to increased footwear sales of Dockers and private label products, partially offset by decreased sales of Levi's as we exited that business. The license for the Levi's brand expired in May 2026.
Current wording
Genesco Brands Group's net sales decreased 9.2% to $55.4 million for the first six months of Fiscal 2027 from $61.0 million for the first six months of Fiscal 2026 primarily due to decreased sales of Levi's as we exited that business, partially offset by increased footwear sales of Dockers and private label products.
Previous wording
Corporate and other expense for the first quarter of Fiscal 2027 was a gain of $0.5 million compared to an expense of $7.9 million for the first quarter of Fiscal 2026. The gain in corporate in the first quarter of Fiscal 2027 included an asset impairment and other gain of $10.1 million which included a gain from payment card interchange fee litigation, partially offset by store restructuring charges, costs associated with information technology transformation and severance. Corporate expense in the first quarter of Fiscal 2026 included asset impairment and other charges of $0.3 million for severance. The corporate expense increase, excluding asset impairment and other charges, reflects additional information technology transformation expenses and increased performance-based incentive compensation expense in the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026.
Current wording
Corporate and other expense for the first six months of Fiscal 2027 was $16.4 million compared to $16.2 million for the first six months of Fiscal 2026. Corporate expenses in the first six months of Fiscal 2027 included an asset impairment and other gain of $1.2 million which included a gain from payment card interchange fee litigation, partially offset by costs related to proxy contest, other legal matters, store restructuring charges, costs associated with information technology transformation and severance and other restructuring. Corporate expense in the first six months of Fiscal 2026 included asset impairment and other charges of $0.4 million for severance. The corporate expense increase, excluding asset impairment and other charges, reflects additional information technology transformation expenses and increased performance-based incentive compensation expense, partially offset by lower professional fees and other expenses in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026.
Previous wording
Net interest expense decreased $1.0 million to $0.3 million in the first quarter of Fiscal 2027 compared to $1.3 million in the first quarter of Fiscal 2026 primarily reflecting decreased revolver borrowings in North America in the first quarter of Fiscal 2027 compared to the first quarter of Fiscal 2026 and increased interest income in the first quarter of Fiscal 2027 as a result of increased investments during the first quarter this year.
Current wording
Net interest decreased $2.6 million to $0.2 million in the first six months of Fiscal 2027 compared to $2.8 million in the first six months of Fiscal 2026 primarily reflecting decreased revolver borrowings in North America in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 and increased interest income in the first six months of Fiscal 2027 as a result of $0.7 million in interest income on tariff refunds and increased investments during the first six months this year.
Previous wording
Cash used in operating activities was $1.7 million higher in the first three months of Fiscal 2027 compared to the first three months of Fiscal 2026, reflecting primarily the following factors:
Current wording
Cash used in operating activities was $11.7 million higher in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026, reflecting primarily the following factors:
Previous wording
a $23.0 million decrease in cash flow from changes in inventory, primarily reflecting a $43.2 million increase in inventory in the first three months of Fiscal 2027 compared to a $20.2 million increase in inventory in the first three months of Fiscal 2026; partially offset by
Current wording
a $37.2 million decrease in cash flow from changes in inventory, primarily reflecting a $107.4 million increase in inventory in the first six months of Fiscal 2027 compared to a $70.1 million increase in inventory in the first six months of Fiscal 2026; partially offset by
Previous wording
a $19.4 million increase in cash flow from changes in accounts payable, primarily reflecting changes in buying and receipt patterns in the first three months of Fiscal 2027 compared to the first three months of Fiscal 2026.
Current wording
a $35.2 million increase in cash flow from changes in accounts payable, primarily reflecting changes in timing of rent payments and changes in buying and receipt patterns in the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026.
Previous wording
Cash used in investing activities was $3.5 million lower for the first three months of Fiscal 2027 as compared to the first three months of Fiscal 2026 reflecting decreased capital expenditures primarily related to omni-channel capabilities and investments in retail stores.
Current wording
Cash used in investing activities was $1.8 million lower for the first six months of Fiscal 2027 as compared to the first six months of Fiscal 2026 reflecting decreased capital expenditures primarily related to omni-channel capabilities, partially offset by increased investments in retail stores.
Previous wording
Cash provided by financing activities was $67.3 million lower in the first three months of Fiscal 2027 as compared to the first three months of Fiscal 2026 primarily reflecting decreased net borrowings, partially offset by decreased share repurchases.
Current wording
Cash provided by financing activities was $44.8 million lower in the first six months of Fiscal 2027 as compared to the first six months of Fiscal 2026 primarily reflecting decreased net borrowings, partially offset by decreased share repurchases.
Previous wording
As of May 2, 2026, we have borrowed $15.0 million U.S. revolver borrowings, $7.9 million (CAD $10.8 million) revolver borrowings related to GCO Canada ULC and $22.4 million (£16.5 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 2, 2026.
Current wording
As of August 1, 2026, we have borrowed $9.1 million (CAD $12.7 million) revolver borrowings related to GCO Canada ULC and $6.7 million (£5.0 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 August 1, 2026.
Previous wording
In addition, as discussed in Item I, Note 7, “Legal Proceedings,” to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we expect to receive refunds of approximately $23 to $25 million, not including interest, related to tariffs previously collected under IEEPA. The timing of cash receipts is dependent upon the execution of the refund process by CBP and the U.S. Treasury Department.
Current wording
In addition, as discussed in Item 1, Note 7, “Legal Proceedings,” to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we received tariff refunds of $21.8 million, not including interest, related to tariffs previously collected under IEEPA.
Previous wording
Our contractual obligations at May 2, 2026 increased 9% compared to January 31, 2026, primarily due to increased long-term debt and lease obligations.
Current wording
Our contractual obligations at August 1, 2026 increased 13% compared to January 31, 2026, primarily due to increased lease obligations and long-term debt.
Previous wording
Total capital expenditures in Fiscal 2027 are expected to be approximately $65 to $70 million of which approximately 90% is for new stores and renovations and 10% 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 January 31, 2026. We also do not currently have any off-balance sheet arrangements.
Current wording
Total capital expenditures in Fiscal 2027 are expected to be approximately $65 to $70 million of which approximately 95% is for new stores and renovations and 5% 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 January 31, 2026. We also do not currently have any off-balance sheet arrangements.
Previous wording
We did not 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 three months of Fiscal 2026 at a cost of $12.6 million, or an average cost of $20.79 per share. We have $29.8 million remaining as of May 2, 2026 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. We continue to view share repurchases as an important component of our balanced capital allocation strategy and are committed to deploying excess capital.
Current wording
We did not repurchase any shares of our common stock during the second quarter and first six months of Fiscal 2027. We repurchased 604,531 shares of our common stock during the first six months of Fiscal 2026 at a cost of $12.6 million, or an average cost of $20.79 per share. We had $29.8 million remaining as of August 1, 2026 under our expanded share repurchase authorization announced in June 2023. During the third quarter of Fiscal 2027, through September 9, 2026, we have repurchased 317,503 shares of our common stock at a cost of $11.0 million, or an average cost of $34.65 per share. As of September 9, 2026, we have $18.8 million remaining under our expanded share repurchase authorization. We continue to view share repurchases as an important component of our balanced capital allocation strategy and are committed to deploying excess capital.
Previous wording
Descriptions of recently issued accounting pronouncements, if any, and the accounting pronouncements adopted by us during the first quarter of Fiscal 2027 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 second quarter of Fiscal 2027 are included in Note 1 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Form 10-K for the fiscal year ended January 31, 2026. There have been no significant changes in our definition of significant accounting policies or critical accounting estimates since the end of Fiscal 2026.
Current report — wording carried from elsewhere
The 30 basis point decrease in operating margin for Schuh Group for the second quarter of Fiscal 2027 compared to the second quarter of Fiscal 2026 was due to a 340 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the second quarter of Fiscal 2027, as a result of lower revenue. The decrease in operating margin was partially offset by a 300 basis point increase in gross margin as a percentage of net sales, reflecting decreased promotional activity and more full-priced selling.
Current report — wording carried from elsewhere
Genesco Brands Group's net sales decreased 20.8% to $25.7 million for the second quarter of Fiscal 2027 from $32.4 million for the second quarter of Fiscal 2026 primarily due to decreased sales of Levi's as we exited that business, partially offset by increased footwear sales of Dockers.
Current report — wording carried from elsewhere
The 140 basis point improvement in operating margin for Journeys Group for the first six months of Fiscal 2027 compared to the first six months of Fiscal 2026 was primarily due to a 180 basis point decrease in selling and administrative expenses as a percentage of net sales. This improvement reflects leverage of expenses in the first six months of Fiscal 2027, especially selling salaries and demonstrates the impact of our productivity efforts, cost savings initiatives and closing underperforming stores. The increase in operating margin was partially offset by a 40 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns.
Current report — wording carried from elsewhere
Net sales from Schuh Group decreased 8.1% to $204.5 million in the first six months of Fiscal 2027 compared to $222.5 million in the first six months of Fiscal 2026. The net sales decrease for the first six months of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, and a 7% decrease in the average number of stores in the first six months of Fiscal 2027, partially offset by a favorable impact of $3.0 million due to changes in foreign exchange rates. We prioritized more full-priced selling with less discounts and promotions in Schuh Group during the first six months of Fiscal 2027 but this pressured sales in stores and online and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 9% on a local currency basis for the first six months of Fiscal 2027.
Current report — wording carried from elsewhere
Corporate, Interest Expenses and Other Charges