US' Genesco posts sales of $523 mn in Q2 FY24

The overall sales decrease of 2 per cent for the second quarter of fiscal 2024 compared to the second quarter of fiscal 2023 was driven by a decrease of 11 per cent at Journeys and a 7 per cent decrease at Genesco Brands, partially offset by an increase of 21 per cent at Schuh and an increase of 4 per cent at Johnston & Murphy. On a constant currency basis, Schuh sales were up 17 per cent for the second quarter this year.

Second quarter gross margin this year was 47.7 per cent, up 20 basis points compared with 47.5 per cent last year. The increase as a percentage of sales compared to fiscal 2023 is due primarily to increased markdowns at Journeys being offset by improved margins in all the remaining businesses, the company said in a press release.

Selling and administrative expenses for the second quarter this year increased 380 basis points as a percentage of sales compared with last year. Adjusted selling and administrative expenses for the second quarter this year increased 400 basis points as a percentage of sales compared with last year. The increase as a percentage of sales compared to fiscal 2023 reflects the deleverage of expenses as a result of decreased revenue in the second quarter of fiscal 2024. The increase in expense was primarily related to a prior year reversal of performance-based compensation expense, along with increased compensation expense, and higher IT expenses to drive technology initiatives in the second quarter this year.

“As we expected, the operating environment remained challenging in the second quarter. However, relative to earlier this year, we were encouraged to see some improvement in the trend within our Journeys business as the quarter progressed, leading us to deliver results ahead of our prior expectations. In the meantime, Schuh and Johnston & Murphy continue to outperform, each delivering another quarter of record sales despite the challenging backdrop, and we continued to make progress on our plans to close roughly 100 Journeys stores and reduce costs by $40 million. Moving forward, I remain confident that we are implementing the right strategic initiatives to weather the current environment, including specific actions to elevate and accelerate Journeys performance and evolve it for the longer term to drive value in an even stronger competitive position,” Mimi E Vaughn, Genesco’s board chair, president and chief executive officer, said.

“Thus far in the third quarter, sales trends for the Back-to-School season improved a little further with consumers shopping when there is a reason and much closer to need. Given the ongoing lack of visibility into consumer demand patterns in the near-term and other pressures, we are maintaining our cautious view and reiterating our outlook for fiscal 2024,” Vaughn continued.

For fiscal 2024, the company expects sales to be down 2 per cent to 4 per cent, or down 3 per cent to 5 per cent excluding the 53^rd week this year, compared to fiscal 2023. It continues to expect adjusted diluted earnings per share from continuing operations in the range of $2.00 to $2.50, with an expectation that EPS will be near the mid-point of the range.

Fibre2Fashion News Desk (RR)