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1. Company Snapshot

1.a. Company Description

Genesco Inc.operates as a retailer and wholesaler of footwear, apparel, and accessories.The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Licensed Brands.


The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children.The Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear, as well as sells footwear through e-commerce.The Johnston & Murphy Group segment is involved in the retail and e-commerce operations; and wholesale distribution of men's dress and casual footwear, apparel, and accessories, as well as women's footwear and accessories.


The Licensed Brands segment markets footwear under the Levi's, Dockers, and G.H. Bass brands for men, women, and children, as well as designs and manufactures the STARTER and ETONIC brands footwear.As of January 29, 2022, the company operated approximately 1,425 retail stores in the United States, Puerto Rico, Canada, the United Kingdom, and the Republic of Ireland primarily under the Journeys, Journeys Kidz, Schuh, Little Burgundy, and Johnston & Murphy names.Its e-commerce websites include journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, littleburgundyshoes.com, johnstonmurphy.ca, nashvilleshoewarehouse.com, and dockersshoes.com.


Genesco Inc.was incorporated in 1924 and is headquartered in Nashville, Tennessee.

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1.b. Last Insights on GCO

Negative drivers include margin pressure at Schuh, a cautious sales outlook, and an investigation into compliance with federal securities laws. The company's Q3 earnings missed estimates, with quarterly earnings of $0.79 per share, below the Zacks Consensus Estimate of $0.87 per share. Additionally, some institutional investors, such as Campbell & CO Investment Adviser LLC and Brandywine Global Investment Management LLC, have reduced their holdings in the company. According to MarketBeat.com, the company has an average rating of "Hold" from five research firms, with two sell ratings and two hold ratings.

1.c. Company Highlights

2. Genesco's Q3 FY2026 Earnings Report: A Mixed Bag

Genesco's third-quarter fiscal 2026 results showed a solid performance, driven by Journeys' 6% comp growth and over 50% increase in operating income. Total comparable sales rose 3%, with store comps up 5%, while e-commerce comp declined modestly. Gross margin was 46.8%, down 100 basis points, due to product liquidations, tariff costs, and margin pressure at Schuh. Adjusted operating income was $12.9 million, and adjusted diluted EPS was $0.79, up from $0.61 last year. The actual EPS came out at $0.516, relative to estimates at $0.87.

Publication Date: Dec -07

📋 Highlights
  • Journeys' Comps and Income Growth:: Journeys drove 6% comp growth, contributing over 50% increase in operating income.
  • Full-Year Adjusted EPS Outlook:: Genesco revised full-year adjusted EPS to $0.95, reflecting a 34% tax rate and lower SG&A leverage (140 bps improvement YoY).
  • Gross Margin Pressure:: Q3 gross margin declined 100 bps to 46.8%, impacted by Schuh margin pressure, product liquidations, and tariff costs.
  • Journeys' 4.0 Remodel and Nike Launch:: Journeys expects mid-single-digit comp growth in Q4 despite flat-to-down sales outlook, aided by store remodels and Nike introductions in select locations.

Segment Performance

Journeys is expected to deliver mid-single-digit comp growth and almost double operating income for the year. The company has introduced Nike in Journeys, which has started in a limited number of doors, and expects to expand it further. Genesco's CEO, Mimi Eckel Vaughn, notes that the consumer is selective but the company has the right strategies, teams, and brand portfolio to navigate the environment.

Gross Margin Pressures

Gross margin declined due to pressure at Schuh and tariff impacts. The decline was also affected by a one-time hit from liquidating Levi's product, which won't recur. The company sees opportunities to improve margins by addressing these issues. At Schuh, a couple of hundred basis points of margin pressure is expected, but actions like right-sizing inventory and strengthening the assortment will help.

Outlook and Valuation

The company updated its outlook for the full year, expecting adjusted EPS of approximately $0.95, reflecting a higher tax rate of 34%. The revised outlook considers greater pressure on Schuh's sales and margins, more conservative sales assumptions, and lower SG&A. Analysts estimate next year's revenue growth at 0.3%. With a P/E Ratio of 6046.18 and an EV/EBITDA of 26.26, the stock appears to be priced for high expectations. The P/S Ratio is 0.1, indicating a relatively low revenue multiple.

Marketing and Cost Management

The company is investing in brand marketing, including the Live On Loud campaign and Peyton Manning partnership, which have performed well. The goal is to build awareness and attract new customers. Over 140 basis points of expense leverage was achieved despite increased marketing spend. The company aims to continue funding brand investments while managing costs.

3. NewsRoom

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Head to Head Comparison: ON (NYSE:ONON) versus Genesco (NYSE:GCO)

Feb -10

Source: defenseworld.net

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Genesco Announces Chief Financial Officer Transition

Jan -29

Source: businesswire.com

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Genesco Announces Strategic Transformation of Its Information Technology Operations

Jan -15

Source: businesswire.com

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Genesco Rallies on Holiday Sales Strength and Higher FY26 View

Jan -13

Source: zacks.com

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Genesco Reports Comparable Sales

Jan -12

Source: businesswire.com

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Head to Head Review: Genesco (NYSE:GCO) versus 361 Degrees International (OTCMKTS:TSIOF)

Jan -12

Source: defenseworld.net

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Genesco (NYSE:GCO) Stock Passes Above Two Hundred Day Moving Average – Time to Sell?

Jan -07

Source: defenseworld.net

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Genesco Inc. (NYSE:GCO) Given Average Rating of “Hold” by Brokerages

Dec -30

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.94%)

6. Segments

Journeys Group

Expected Growth: 2%

Journeys Group's 2% growth is driven by increasing demand for casual footwear, successful marketing campaigns targeting younger demographics, and strategic store remodels enhancing customer experience. Additionally, the group's focus on omnichannel retailing and e-commerce expansion has contributed to sales growth.

Schuh Group

Expected Growth: 3%

Schuh Group's 3% growth is driven by its strong brand reputation, effective omnichannel strategy, and focus on customer experience. Additionally, its diversified product offerings, including popular brands like Dr. Martens and Vans, contribute to its growth. Furthermore, the company's strategic expansion into new markets and online channels also support its growth momentum.

Johnston & Murphy Group

Expected Growth: 1%

Johnston & Murphy's 1% growth is driven by increasing demand for high-quality, comfortable footwear and apparel, particularly among professionals and business casual consumers. The brand's focus on innovative products, omnichannel retailing, and effective marketing strategies have contributed to its steady growth.

Genesco Brands

Expected Growth: 0%

Genesco Brands from Genesco Inc. has stagnant growth due to declining mall traffic, intense competition from online retailers, and failure to adapt to changing consumer preferences. Additionally, high inventory levels, inefficient supply chain management, and lack of effective marketing strategies have contributed to the stagnant growth.

7. Detailed Products

Journeys

A leading retailer of footwear and accessories for teens and young adults, offering a wide range of brands and styles.

Journeys Kidz

A retailer of kids' footwear and accessories, offering a variety of brands and styles for children of all ages.

Shi by Journeys

A retailer of fashion footwear and accessories for young women, offering a curated selection of trendy brands and styles.

Johnston & Murphy

A retailer of high-quality, stylish footwear and accessories for men and women, offering a range of classic and contemporary styles.

Hat Shack

A retailer of hats and caps for men and women, offering a wide selection of styles and brands.

Lids

A retailer of hats and caps for men and women, offering a wide selection of styles and brands, with a focus on sports and entertainment.

8. Genesco Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Genesco Inc. operates in the retail industry, which is characterized by a moderate level of substitutes. While there are many alternatives to Genesco's products, the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

Genesco Inc. operates in a highly competitive market, where customers have a high degree of bargaining power. The company's customers have many alternatives, and the switching costs are low, giving them significant negotiating power.

Bargaining Power Of Suppliers

Genesco Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers. The company's large scale of operations also gives it significant negotiating power over its suppliers.

Threat Of New Entrants

The retail industry has significant barriers to entry, including high capital requirements and the need for a strong brand reputation. These barriers make it difficult for new entrants to compete with established players like Genesco Inc.

Intensity Of Rivalry

The retail industry is highly competitive, with many established players competing for market share. Genesco Inc. operates in a highly competitive market, where companies must constantly innovate and adapt to changing consumer preferences to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 22.64%
Debt Cost 3.95%
Equity Weight 77.36%
Equity Cost 15.40%
WACC 12.80%
Leverage 29.27%

11. Quality Control: Genesco Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Citi Trends

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Value: 6.7

Growth: 1.7

Quality: 2.0

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

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Torrid

A-Score: 3.4/10

Value: 10.0

Growth: 4.4

Quality: 4.2

Yield: 0.0

Momentum: 0.5

Volatility: 1.0

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Growth: 3.3

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Genesco

A-Score: 2.9/10

Value: 5.4

Growth: 3.0

Quality: 2.7

Yield: 0.0

Momentum: 4.5

Volatility: 2.0

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A-Score: 2.8/10

Value: 8.0

Growth: 3.9

Quality: 3.4

Yield: 0.0

Momentum: 0.0

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A-Score: 2.5/10

Value: 8.5

Growth: 1.0

Quality: 3.9

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.73$

Current Price

28.73$

Potential

-0.00%

Expected Cash-Flows