GCO Genesco Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (date of earliest event reported): December 1, 2023

GENESCO INC.

(Exact name of registrant as specified in its charter)

 

Tennessee	1-3083		62-0211340
(State or Other Jurisdiction of Incorporation)	(Commission File Number)		(I.R.S. Employer Identification No.)
535 Marriott Drive	Nashville	Tennessee	37214
(Address of Principal Executive Offices)			(Zip Code)

 

(615) 367-7000

Registrant's telephone number, including area code

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of exchange on which registered
Common Stock, $1.00 par value	GCO	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

 

 

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ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On December 1, 2023, Genesco Inc. issued a press release announcing results of operations for the third fiscal quarter ended October 28, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On December 1, 2023, the Company also posted on its website, www.genesco.com, a slide presentation with summary results. A copy of the slide presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.

In addition to disclosing financial results calculated in accordance with United States generally accepted accounting principles (GAAP), the press release furnished herewith contains non-GAAP financial measures, including adjusted selling and administrative expense, operating income, pretax earnings, earnings from continuing operations and earnings per share from continuing operations, as discussed in the text of the release and as detailed on the reconciliation schedule attached to the press release. For consistency and ease of comparison with the adjusted results for the prior period announced last year, the Company believes that disclosure of the non-GAAP measures will be useful to investors.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

The following exhibits are furnished herewith:

 

Exhibit Number		Description
99.1		Press Release issued by Genesco Inc. on December 1, 2023
99.2		Genesco Inc. Third Fiscal Quarter ended October 28, 2023 Summary Results
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		GENESCO INC.
Date: Deember 1, 2023		By:		/s/ Thomas A. George
		Name:		Thomas A. George
		Title:		Senior Vice President and Chief Financial Officer

 

 

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Exhibit 99.1

 

 

GENESCO INC. REPORTS FISCAL 2024 THIRD QUARTER RESULTS

NASHVILLE, Tenn., Dec. 1, 2023 --- Genesco Inc. (NYSE: GCO) today reported third quarter results for the three months ended October 28, 2023.

 

Third Quarter Fiscal 2024 Financial Summary

Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “Following a good Back-to-School season, demand in October softened in an ongoing challenging operating environment, along with a delayed start to the fall selling season. Disruptions related to implementation of a new ERP system for our branded businesses added to the pressure, all leading to results that were below our expectations. Despite these headwinds, we were pleased to see sales trends within our Journeys business continue to sequentially improve, and Schuh and Johnston & Murphy deliver record third-quarter sales. In the meantime, we continued to inject Journeys’ product assortment with more of the newness and must-have items our customer desires, while also executing on our cost reduction and store closure plans.”

 

Vaughn continued, “Fourth quarter-to-date, I’m pleased to say our total comps are currently running positive and we experienced a strong start to the holiday season. However, as consumer shopping behavior remains choppy, we plan to increase our promotional activity, especially at Journeys, for the remainder of the holiday season to be more competitive and drive sales in this environment. Our revised Fiscal 2024 outlook reflects this, partially offset by a somewhat more conservative view for our other businesses. Looking ahead, I have confidence that our strategic initiatives and specific efforts to elevate Journeys in the marketplace will help us continue to drive progress in the near term while positioning us even more strongly to create value for the longer term.”

 

 

 

__________________________

1Excludes a charge for asset impairments, net of tax effect in the third quarter of Fiscal 2024 (“Excluded Items”). A reconciliation of earnings (loss) and earnings (loss) per share from continuing operations in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) with the adjusted earnings (loss) and earnings (loss) per share numbers is set forth on Schedule B to this press release. The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

 

 

 

 

 

 

 

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Third Quarter Review

 

Net sales for the third quarter of Fiscal 2024 of $579 million decreased 4% compared to $604 million in the third quarter of Fiscal 2023. The sales decrease compared to last year was driven by decreased store sales in Journeys Group and decreased wholesale sales in Genesco Brands Group, partially offset by an 8% increase in e-commerce comparable sales and a favorable foreign exchange impact.

 

Comparable Sales
Comparable Same Store and Direct Sales:	3QFY24	3QFY23
Journeys Group	(8)%	1%
Schuh Group	5%	3%
Johnston & Murphy Group	1%	20%
Total Genesco Comparable Sales	(4)%	3%
Same Store Sales	(7)%	2%
Comparable Direct Sales	8%	6%

The overall sales decrease of 4% for the third quarter of Fiscal 2024 compared to the third quarter of Fiscal 2023 was driven by a decrease of 8% at Journeys and a 22% or $8 million decrease at Genesco Brands, partially offset by an increase of 13% at Schuh and an increase of 2% at Johnston & Murphy. On a constant currency basis, Schuh had record third quarter sales, which were up 5%.

 

Third quarter gross margin this year was 48.1%, down 60 basis points compared with 48.7% last year. The decrease as a percentage of sales compared to Fiscal 2023 is due primarily to increased promotional activity at Journeys, including introductory coupons for their new loyalty program, more normalized markdowns and closeouts at Johnston & Murphy and increased shipping and warehouse expense in all retail businesses, reflecting increased warehouse costs and higher e-commerce penetration, partially offset by improved margins at Schuh and Genesco Brands.

 

Selling and administrative expense for the third quarter this year increased 190 basis points as a percentage of sales compared with last year. Adjusted selling and administrative expense for the third quarter this year also increased 190 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, especially compensation, marketing and depreciation expenses, as a result of decreased revenue in the third quarter of Fiscal 2024. In absolute dollars, selling and

administrative expenses were flat for the third quarter this year compared to last year.

 

 

 

 

 

 

 

 

 

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Genesco’s GAAP operating income for the third quarter was $10.9 million, or 1.9% of sales this year, compared with $26.1 million, or 4.3% of sales in the third quarter last year. Adjusted for the Excluded Items in all periods, operating income for the third quarter was $11.0 million this year compared to $26.3 million last year. Adjusted operating margin was 1.9% of sales in the third quarter of Fiscal 2024 and 4.4% in the third quarter last year.

 

The effective tax rate for the quarter was 22.5% in Fiscal 2024 compared to 18.7% in the third quarter last year. The adjusted tax rate, reflecting Excluded Items, was 27.8% in Fiscal 2024 compared to 19.6% in the third quarter last year. The higher adjusted tax rate for the third quarter this year compared to the third quarter last year primarily reflects that we are no longer subject to a valuation allowance in certain jurisdictions.

 

GAAP earnings from continuing operations were $6.6 million in the third quarter of Fiscal 2024 compared to $20.4 million in the third quarter last year. Adjusted for the Excluded Items in all periods, third quarter earnings from continuing operations were $6.2 million, or $0.57 per share, in Fiscal 2024, compared to $20.4 million, or $1.65 per share, in the third quarter last year.

Cash, Borrowings and Inventory

 

Cash as of October 28, 2023 was $21.7 million, compared with $32.1 million as of October 29, 2022. Total debt at the end of the third quarter of Fiscal 2024 was $128.2 million compared with $89.4 million at the end of last year’s third quarter. Inventories decreased 8% on a year over year basis reflecting decreased inventory for Journeys and Johnston & Murphy, partially offset by an increase at Schuh.

Capital Expenditures and Store Activity

 

For the third quarter this year, capital expenditures were $15 million, related primarily to retail stores and digital and omnichannel initiatives. Depreciation and amortization was $12 million. During the quarter, the Company opened five stores and closed 20 stores. The Company ended the quarter with 1,360 stores compared with 1,404 stores at the end of the third quarter last year, or a decrease of 3%. Square footage was down 1% on a year-over-year basis.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Share Repurchases

 

The Company did not repurchase any shares during the third quarter of Fiscal 2024. The Company currently has $52.1 million remaining on its expanded share repurchase authorization announced in June 2023.

Store Closing and Cost Savings Update

 

 

Revised Fiscal 2024 EPS Outlook

 

For Fiscal 2024, the Company:

Conference Call, Management Commentary and Investor Presentation

 

The Company has posted detailed financial commentary and a supplemental financial presentation of third quarter results on its website, www.genesco.com, in the investor relations section. The Company's live conference call on December 1, 2023, at 7:30 a.m. (Central time), may be accessed through the Company's website, www.genesco.com. To listen live, please go to the website at least 15 minutes early to register, download and install any necessary software.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________________________

2A reconciliation of the adjusted financial measures cited in the guidance to their corresponding measures as reported pursuant to GAAP is included in Schedule B to this press release.

 

 

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Safe Harbor Statement

 

This release contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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consumer demand; the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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About Genesco Inc.

 

Genesco Inc. (NYSE: GCO) is a footwear focused company with distinctively positioned retail and lifestyle brands and proven omnichannel capabilities offering customers the footwear they desire in engaging shopping environments, including approximately 1,350 retail stores and branded e-commerce websites. Its Journeys, Little Burgundy and Schuh brands serve teens, kids and young adults with on-trend fashion footwear that inspires youth culture in the U.S., Canada and the U.K. Johnston & Murphy serves the successful, affluent man and woman with premium footwear, apparel and accessories in the U.S. and Canada, and Genesco Brands Group sells branded lifestyle footwear to leading retailers under licensed brands including Levi’s, Dockers and G.H. Bass. Founded in 1924, Genesco is based in Nashville, Tennessee. For more information on Genesco and its operating divisions, please visit www.genesco.com.

Genesco Financial Contact Genesco Media Contact

Thomas A. George Claire S. McCall

(615) 367-7465 (615) 367-8283

tgeorge@genesco.com cmccall@genesco.com

Darryl MacQuarrie

(615) 367-7672

dmacquarrie@genesco.com

 

 

 

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GENESCO INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

		Quarter 3								Quarter 3
		October 28, 2023				% of Net Sales				October 29, 2022				% of Net Sales
Net sales		$	579,315				100.0	%		$	603,788				100.0	%
Cost of sales			300,890				51.9	%			309,981				51.3	%
Gross margin			278,425				48.1	%			293,807				48.7	%
Selling and administrative expenses			267,474				46.2	%			267,734				44.3	%
Asset impairments and other, net			99				0.0	%			—				0.0	%
Operating income			10,852				1.9	%			26,073				4.3	%
Other components of net periodic benefit cost			148				0.0	%			50				0.0	%
Interest expense, net			2,207				0.4	%			906				0.2	%
Earnings from continuing operations before income taxes			8,497				1.5	%			25,117				4.2	%
Income tax expense			1,908				0.3	%			4,693				0.8	%
Earnings from continuing operations			6,589				1.1	%			20,424				3.4	%
Loss from discontinued operations, net of tax			(50	)			0.0	%			(48	)			0.0	%
Net Earnings		$	6,539				1.1	%		$	20,376				3.4	%
Basic earnings per share:
Before discontinued operations		$	0.60							$	1.68
Net earnings		$	0.60							$	1.68
Diluted earnings per share:
Before discontinued operations		$	0.60							$	1.66
Net earnings		$	0.60							$	1.65
Weighted-average shares outstanding:
Basic			10,898								12,138
Diluted			10,972								12,326

 

 

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GENESCO INC.

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(Unaudited)

 

		Nine Months Ended								Nine Months Ended
		October 28, 2023				% of Net Sales				October 29, 2022				% of Net Sales
Net sales		$	1,585,674				100.0	%		$	1,659,868				100.0	%
Cost of sales			828,921				52.3	%			860,303				51.8	%
Gross margin			756,753				47.7	%			799,565				48.2	%
Selling and administrative expenses			778,491				49.1	%			756,318				45.6	%
Goodwill impairment			28,453				1.8	%			—				0.0	%
Asset impairments and other, net			581				0.0	%			(154	)			0.0	%
Operating income (loss)			(50,772	)			-3.2	%			43,401				2.6	%
Other components of net periodic benefit cost			388				0.0	%			198				0.0	%
Interest expense, net			6,241				0.4	%			1,608				0.1	%
Earnings (loss) from continuing operations before income taxes			(57,401	)			-3.6	%			41,595				2.5	%
Income tax expense (benefit)			(13,483	)			-0.9	%			8,551				0.5	%
Earnings (loss) from continuing operations			(43,918	)			-2.8	%			33,044				2.0	%
Loss from discontinued operations, net of tax			(98	)			0.0	%			(78	)			0.0	%
Net Earnings (loss)		$	(44,016	)			-2.8	%		$	32,966				2.0	%
Basic earnings (loss) per share:
Before discontinued operations		$	(3.87	)						$	2.61
Net earnings (loss)		$	(3.88	)						$	2.61
Diluted earnings (loss) per share:
Before discontinued operations		$	(3.87	)						$	2.56
Net earnings (loss)		$	(3.88	)						$	2.56
Weighted-average shares outstanding:
Basic			11,353								12,637
Diluted			11,353								12,901

 

 

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

 

		Quarter 3								Quarter 3
		October 28, 2023				% of Net Sales				October 29, 2022				% of Net Sales
Sales:
Journeys Group		$	349,367				60.3	%		$	380,619				63.0	%
Schuh Group			118,129				20.4	%			104,809				17.4	%
Johnston & Murphy Group			81,411				14.1	%			79,614				13.2	%
Genesco Brands Group			30,408				5.2	%			38,746				6.4	%
Net Sales		$	579,315				100.0	%		$	603,788				100.0	%
Operating Income (Loss):
Journeys Group		$	11,975				3.4	%		$	27,083				7.1	%
Schuh Group			5,484				4.6	%			5,912				5.6	%
Johnston & Murphy Group			2,706				3.3	%			3,494				4.4	%
Genesco Brands Group			(1,560	)			-5.1	%			(1,927	)			-5.0	%
Corporate and Other(1)			(7,753	)			-1.3	%			(8,489	)			-1.4	%
Operating income			10,852				1.9	%			26,073				4.3	%
Other components of net periodic benefit cost			148				0.0	%			50				0.0	%
Interest, net			2,207				0.4	%			906				0.2	%
Earnings from continuing operations before income taxes			8,497				1.5	%			25,117				4.2	%
Income tax expense			1,908				0.3	%			4,693				0.8	%
Earnings from continuing operations			6,589				1.1	%			20,424				3.4	%
Loss from discontinued operations, net of tax			(50	)			0.0	%			(48	)			0.0	%
Net Earnings		$	6,539				1.1	%		$	20,376				3.4	%

 

 

 

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GENESCO INC.

Sales/Earnings Summary by Segment

(in thousands)

(Unaudited)

		Nine Months Ended								Nine Months Ended
		October 28, 2023				% of Net Sales				October 29, 2022				% of Net Sales
Sales:
Journeys Group		$	908,832				57.3	%		$	1,016,396				61.2	%
Schuh Group			334,033				21.1	%			294,486				17.7	%
Johnston & Murphy Group			241,823				15.3	%			225,448				13.6	%
Genesco Brands Group			100,986				6.4	%			123,538				7.4	%
Net Sales		$	1,585,674				100.0	%		$	1,659,868				100.0	%
Operating Income (Loss):
Journeys Group		$	(21,265	)			-2.3	%		$	51,235				5.0	%
Schuh Group			12,110				3.6	%			5,260				1.8	%
Johnston & Murphy Group			10,178				4.2	%			7,256				3.2	%
Genesco Brands Group			259				0.3	%			2,551				2.1	%
Corporate and Other(1)			(23,601	)			-1.5	%			(22,901	)			-1.4	%
Goodwill Impairment			(28,453	)			-1.8	%			—				0.0	%
Operating income (loss)			(50,772	)			-3.2	%			43,401				2.6	%
Other components of net periodic benefit cost			388				0.0	%			198				0.0	%
Interest, net			6,241				0.4	%			1,608				0.1	%
Earnings (loss) from continuing operations before income taxes			(57,401	)			-3.6	%			41,595				2.5	%
Income tax expense (benefit)			(13,483	)			-0.9	%			8,551				0.5	%
Earnings (loss) from continuing operations			(43,918	)			-2.8	%			33,044				2.0	%
Loss from discontinued operations, net of tax			(98	)			0.0	%			(78	)			0.0	%
Net Earnings (Loss)		$	(44,016	)			-2.8	%		$	32,966				2.0	%

 

 

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GENESCO INC.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

 

 

		October 28, 2023				October 29, 2022
Assets
Cash		$	21,691			$	32,113
Accounts receivable			56,934				48,670
Inventories			516,735				563,490
Other current assets(1)			43,350				37,575
Total current assets			638,710				681,848
Property and equipment			245,009				221,207
Operating lease right of use assets			459,524				483,403
Goodwill and other intangibles			35,725				64,111
Non-current prepaid income taxes			55,632				52,319
Other non-current assets			58,331				34,105
Total Assets		$	1,492,931			$	1,536,993
Liabilities and Equity
Accounts payable		$	186,683			$	223,404
Current portion long-term debt			—				3,484
Current portion operating lease liabilities			134,850				136,294
Other current liabilities			75,631				82,193
Total current liabilities			397,164				445,375
Long-term debt			128,163				85,904
Long-term operating lease liabilities			387,347				413,096
Other long-term liabilities			43,299				33,275
Equity			536,958				559,343
Total Liabilities and Equity		$	1,492,931			$	1,536,993

 

(1) Includes prepaid income taxes of $18.0 million and $13.3 million at October 28, 2023 and October 29, 2022, respectively.

 

 

 

 

 

 

 

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GENESCO INC.

Store Count Activity

 

	Balance 01/29/22			Open			Close			Balance 01/28/23			Open			Close			Balance 10/28/23
Journeys Group		1,135			22			27			1,130			24			74			1,080
Schuh Group		123			4			5			122			2			0			124
Johnston & Murphy Group		167			2			11			158			1			3			156
Total Retail Stores		1,425			28			43			1,410			27			77			1,360

 

 

GENESCO INC.

Store Count Activity

 

	Balance 07/29/23			Open			Close			Balance 10/28/23
Journeys Group		1,095			5			20			1,080
Schuh Group		124			0			0			124
Johnston & Murphy Group		156			0			0			156
Total Retail Stores		1,375			5			20			1,360

 

 

GENESCO INC.

Comparable Sales(1)

 

	Quarter 3						Nine Months
	October 28, 2023			October 29, 2022			October 28, 2023			October 29, 2022
Journeys Group		-8	%		1	%		-10	%	NA
Schuh Group		5	%		3	%		11	%	NA
Johnston & Murphy Group		1	%		20	%		10	%	NA
Total Comparable Sales		-4	%		3	%		-4	%	NA
Same Store Sales		-7	%		2	%		-7	%	NA
Comparable Direct Sales		8	%		6	%		10	%		-9	%

 

 

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Schedule B

Genesco Inc.

Adjustments to Reported Earnings from Continuing Operations

Three Months Ended October 28, 2023 and October 29, 2022

The Company believes that disclosure of earnings and earnings per share from continuing operations and operating income adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

	Quarter 3									Quarter 3
	October 28, 2023									October 29, 2022
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Earnings from continuing operations, as reported				$	6,589		$	0.60					$	20,424		$	1.66
Asset impairments and other adjustments:
Asset impairment charges	$	99			79			0.01		$	—			(3	)		0.00
Fees related to shareholder activist		—			—			0.00			—			(2	)		0.00
Expenses related to new HQ building		—			—			0.00			257			200			0.01
Total asset impairments and other adjustments	$	99			79			0.01		$	257			195			0.01
Income tax expense adjustments:
Tax impact share based awards					48			0.00						28			0.00
Other tax items					(509	)		(0.04	)					(251	)		(0.02	)
Total income tax expense adjustments					(461	)		(0.04	)					(223	)		(0.02	)
Adjusted earnings from continuing operations (1) and (2)				$	6,207		$	0.57					$	20,396		$	1.65

 

 

 

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Schedule B

Genesco Inc.

Adjustments to Reported Operating Income and Selling and Administrative Expenses

Three Months Ended October 28, 2023 and October 29, 2022

 

 

	Quarter 3 - October 28, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	11,975		$	—		$	11,975
Schuh Group		5,484			—			5,484
Johnston & Murphy Group		2,706			—			2,706
Genesco Brands Group		(1,560	)		—			(1,560	)
Corporate and Other		(7,753	)		99			(7,654	)
Total Operating Income	$	10,852		$	99		$	10,951
% of sales		1.9	%					1.9	%

 

 

	Quarter 3 - October 29, 2022
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	27,083		$	—		$	27,083
Schuh Group		5,912			—			5,912
Johnston & Murphy Group		3,494			—			3,494
Genesco Brands Group		(1,927	)		—			(1,927	)
Corporate and Other		(8,489	)		257			(8,232	)
Total Operating Income	$	26,073		$	257		$	26,330
% of sales		4.3	%					4.4	%

 

	Quarter 3
In Thousands	October 28, 2023			October 29, 2022
Selling and administrative expenses, as reported	$	267,474		$	267,734
Expenses related to new HQ building		—			(257	)
Total adjustments		—			(257	)
Adjusted selling and administrative expenses		267,474			267,477
% of sales		46.2	%		44.3	%

 

 

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Schedule B

Genesco Inc.

Adjustments to Reported Earnings (Loss) from Continuing Operations

Nine Months Ended October 28, 2023 and October 29, 2022

The Company believes that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results.

 

	Nine Months									Nine Months
	October 28, 2023									October 29, 2022
In Thousands (except per share amounts)	Pretax			Net of Tax			Per Share Amounts			Pretax			Net of Tax			Per Share Amounts
Earnings (loss) from continuing operations, as reported				$	(43,918	)	$	(3.87	)				$	33,044		$	2.56
Asset impairments and other adjustments:
Asset impairment charges	$	581			446			0.04		$	541			454			0.04
Goodwill impairment charge		28,453			21,858			1.93			—			—			0.00
Gain on pension termination		—			—			0.00			(695	)		(520	)		(0.04	)
Expenses related to new HQ building		—			—			0.00			2,545			1,905			0.15
Total asset impairments and other adjustments	$	29,034			22,304			1.97		$	2,391			1,839			0.15
Income tax expense adjustments:
Tax impact share based awards					1,059			0.09						(635	)		(0.05	)
Other tax items					(1,578	)		(0.14	)					(250	)		(0.02	)
Total income tax expense adjustments					(519	)		(0.05	)					(885	)		(0.07	)
Adjusted earnings (loss) from continuing operations (1) and (2)				$	(22,133	)	$	(1.95	)				$	33,998		$	2.64

 

 

 

 

 

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Schedule B

Genesco Inc.

Adjustments to Reported Operating Income (Loss) and Selling and Administrative Expenses

Nine Months Ended October 28, 2023 and October 29, 2022

 

	Nine Months October 28, 2023
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	(21,265	)	$	—		$	(21,265	)
Schuh Group		12,110			—			12,110
Johnston & Murphy Group		10,178			—			10,178
Genesco Brands Group		259			—			259
Goodwill Impairment		(28,453	)		28,453			—
Corporate and Other		(23,601	)		581			(23,020	)
Total Operating Loss	$	(50,772	)	$	29,034		$	(21,738	)
% of sales		-3.2	%					-1.4	%

 

	Nine Months October 29, 2022
In Thousands	Operating Income (Loss)			Asset Impair & Other Adj			Adj Operating Income (Loss)
Journeys Group	$	51,235		$	—		$	51,235
Schuh Group		5,260			—			5,260
Johnston & Murphy Group		7,256			—			7,256
Genesco Brands Group		2,551			—			2,551
Corporate and Other		(22,901	)		2,391			(20,510	)
Total Operating Income	$	43,401		$	2,391		$	45,792
% of sales		2.6	%					2.8	%

 

	Nine Months
In Thousands	October 28, 2023			October 29, 2022
Selling and administrative expenses, as reported	$	778,491		$	756,318
Expenses related to new HQ building		—			(2,545	)
Total adjustments		—			(2,545	)
Adjusted selling and administrative expenses		778,491			753,773
% of sales		49.1	%		45.4	%

 

 

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Schedule B

Genesco Inc.

Adjustments to Forecasted Earnings (Loss) from Continuing Operations

Fiscal Year Ending February 3, 2024

 

 

 

In millions (except per share amounts)	High Guidance Fiscal 2024						Low Guidance Fiscal 2024
	Net of Tax			Per Share			Net of Tax			Per Share
Forecasted earnings (loss) from continuing operations	$	(0.7	)	$	(0.06	)	$	(6.8	)	$	(0.60	)
Asset impairments and other adjustments:
Asset impairments and other matters		1.5			0.13			1.9			0.17
Goodwill impairment		21.9			1.93			21.9			1.93
Total asset impairments and other adjustments (1)		23.4			2.06			23.8			2.10
Adjusted forecasted earnings from continuing operations (2)	$	22.7		$	2.00		$	17.0		$	1.50

 

 

 

 

This reconciliation reflects estimates and current expectations of future results. Actual results may vary materially from these expectations and estimates, for reasons including those included in the discussion of forward-looking statements elsewhere in this release. The Company disclaims any obligation to update such expectations and estimates.

 

 

 

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THIRD QUARTER FY24 GENESCO Summary Results December 1, 2023 Exhibit 00.0 Exhibit 99.2

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This presentation contains forward-looking statements, including those regarding future sales, earnings, operating income, gross margins, expenses, capital expenditures, depreciation and amortization, tax rates, store openings and closures, cost reductions, ESG progress and all other statements not addressing solely historical facts or present conditions. Forward-looking statements are usually identified by or are associated with such words as “intend,” “expect,” “feel,” “believe,” “anticipate,” “optimistic,” “confident” and similar terminology. Actual results could vary materially from the expectations reflected in these statements. A number of factors could cause differences. These include adjustments to projections reflected in forward-looking statements, including those resulting from weakness in store and shopping mall traffic, restrictions on operations imposed by government entities and/or landlords, changes in public safety and health requirements, and limitations on the Company’s ability to adequately staff and operate stores. Differences from expectations could also result from store closures and effects on the business as a result of civil disturbances; the level and timing of promotional activity necessary to maintain inventories at appropriate levels; our ability to pass on price increases to our customers; the imposition of tariffs on product imported by the Company or its vendors as well as the ability and costs to move production of products in response to tariffs; the Company’s ability to obtain from suppliers products that are in-demand on a timely basis and effectively manage disruptions in product supply or distribution, including disruptions as a result of pandemics or geopolitical events; unfavorable trends in fuel costs, foreign exchange rates, foreign labor and material costs, and other factors affecting the cost of products; our ability to renew our license agreements; impacts of the Russia-Ukraine war, and other sources of market weakness in the U.K. and Republic of Ireland; the effectiveness of the Company's omnichannel initiatives; costs associated with changes in minimum wage and overtime requirements; wage pressure in the U.S. and the U.K.; weakness in the consumer economy and retail industry; competition and fashion trends in the Company's markets; risks related to the potential for terrorist events; risks related to public health and safety events; changes in buying patterns by significant wholesale customers; retained liabilities associated with divestitures of businesses including potential liabilities under leases as the prior tenant or as a guarantor; and changes in the timing of holidays or in the onset of seasonal weather affecting period-to-period sales comparisons. Additional factors that could cause differences from expectations include the ability to secure allocations to refine product assortments to address consumer demand; the ability to renew leases in existing stores and control or lower occupancy costs, to open or close stores in the number and on the planned schedule, and to conduct required remodeling or refurbishment on schedule and at expected expense levels; the Company’s ability to realize anticipated cost savings, including rent savings; the amount and timing of share repurchases; the Company’s ability to achieve expected digital gains and gain market share; deterioration in the performance of individual businesses or of the Company's market value relative to its book value, resulting in impairments of fixed assets, operating lease right of use assets or intangible assets or other adverse financial consequences and the timing and amount of such impairments or other consequences; unexpected changes to the market for the Company's shares or for the retail sector in general; our ability to meet our sustainability, stewardship, emission and diversity, equity and inclusion related ESG projections, goals and commitments; costs and reputational harm as a result of disruptions in the Company’s business or information technology systems either by security breaches and incidents or by potential problems associated with the implementation of new or upgraded systems; the Company’s ability to realize any anticipated tax benefits in both the amount and timeframe anticipated; and the cost and outcome of litigation, investigations, environmental matters and other disputes involving the Company. Additional factors are cited in the "Risk Factors," "Legal Proceedings" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of, and elsewhere in, the Company’s SEC filings, copies of which may be obtained from the SEC website, www.sec.gov, or by contacting the investor relations department of Genesco via the Company’s website, www.genesco.com. Many of the factors that will determine the outcome of the subject matter of this release are beyond Genesco's ability to control or predict. Genesco undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Forward-looking statements reflect the expectations of the Company at the time they are made. The Company disclaims any obligation to update such statements. . Safe Harbor Statement

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Non-GAAP Financial Measures We report consolidated financial results in accordance with generally accepted accounting principles (“GAAP”). However, to supplement these consolidated financial results our presentation includes certain non-GAAP financial measures such as earnings (loss) and earnings (loss) per share and operating income (loss). This supplemental information should not be considered in isolation as a substitute for related GAAP measures. We believe that disclosure of earnings (loss) and earnings (loss) per share from continuing operations and operating income (loss) adjusted for the items not reflected in the previously announced expectations will be meaningful to investors, especially in light of the impact of such items on the results. Reconciliations of the non-GAAP supplemental information to the comparable GAAP measures can be found in the Appendix.

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Our Footwear Focused Vision & Strategy Our Aspiration Create and curate leading footwear brands that represent style, innovation and self-expression; be the destination for our consumers’ favorite fashion footwear How We Will Achieve It Build enduring relationships with our target customers, grounded in unparalleled consumer and market insights Deliver exciting, distinctive experiences and products across digital and physical touchpoints

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Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars Genesco’s strategy spans six strategic growth pillars People, Values, Organization, Culture and ESG Stewardship Accelerate digital to grow direct-to-consumer Pursue synergistic acquisitions to add to growth Maximize the relationship between physical and digital Intensify product innovation and trend insight efforts Reshape the cost base to reinvest for future growth Deepen consumer insights to strengthen customer relationships and brand equity 1 5 6 2 3 4 Attract, Develop and Retain Consumer-Obsessed Talent Genesco’s six strategic growth pillars are designed to accelerate our evolution, while leveraging digital and systems synergies to drive sustainable growth and enhanced profitability

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Our Footwear Focused Vision & Strategy Strategic Initiatives/Pillars Strong Strategic Positioning Retail Platform Branded Platform The destination for young adult and teen fashion footwear and partner of choice for leading global brands Portfolio of leading owned and licensed brands #1 omnichannel retailer of teen fashion footwear #1 omnichannel retailer of youth fashion footwear Deep brand heritage and reputation for quality product Deep brand heritage across portfolio

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Q3 FY24 Highlights We advanced several strategic initiatives in Q3 including growing our overall comparable digital business by 8%, and expanding digital penetration to 21% versus 18% a year ago Q4 comparable sales running positive quarter to date after a strong Black Friday weekend Journeys’ business continued to show sequential improvement in Q3 and Q4 to date as well Johnston and Murphy and Schuh each delivered another quarter of record sales We launched buy-online-pick-up-in-store at Journeys and J&M in October to very promising early results Journeys’ All Access loyalty program is off to a strong start, with KPIs performing well against our high expectations We executed on the Elevate Plan to drive performance Strengthening customer engagement Elevating product and strengthening brand relationships Sharpening Journeys brand marketing Implementing incremental initiatives to drive digital and omnichannel growth Optimizing our Journeys footprint and driving productivity and efficiency Journeys store closure plans are on track, with 75% of the approximately 100 planned doors closed through the end of Q3 We once again maintained strong inventory discipline in Q3, with total inventory down 8% year over year, Journeys down 14% year over year

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$579 MILLION IN SALES Q3 FY24 Key Earnings Highlights +8% GROWTH IN COMPARABLE DIGITAL SALES vs. Q3 FY2023 $0.60 GAAP EPS $0.57 NON-GAAP EPS 21% DIGITAL PENTRATION vs. 18% Q3 FY2023

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Q3 FY24 Key Earning Highlights

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9mos FY24 Key Earning Highlights

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Q3 FY24 E-Commerce Sales Highlights % of Retail Sales (1) 31% 25% 18% 21% (1) Retail sales represent combined store sales and e-commerce sales 19% 22% +12% +13%

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Q3 FY24 Comparable Sales

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FY24 Net Sales $579.3 Million Q3 FY24 Sales by Segment FY23 Net Sales $603.8 Million Journeys Schuh Johnston & Murphy Group Genesco Brands Group

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9mos FY24 Sales by Segment FY24 Net Sales $1.6 Billion FY23 Net Sales $1.7 Billion Journeys Schuh Johnston & Murphy Group Genesco Brands Group

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Q3 FY24 Adjusted Operating Income Statement (1)

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9mos FY24 Adjusted Operating Income Statement (1)

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Q3 FY24 Inventory/Sales Change by Segment

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Q3 FY24 Retail Stores Summary

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For Q3 FY24 Retail Square Footage

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FY24 Outlook (1) Note: See earnings call transcript for important details regarding guidance assumptions. (1) On a Non-GAAP basis

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FY24 Projected Retail Store Count

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FY24 Projected Capital Spending Omni-channel, IT, DC & Other New Stores & Remodels Projected FY24 CapEx approx. $55 - 60 Million FY24 Projected Depreciation & Amortization = $48 Million

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Appendix

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Q3 FY24 Non-GAAP Reconciliation

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9mos FY24 Non-GAAP Reconciliation

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Q3 FY24 Adjusted Selling & Administrative Expenses

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9mos FY24 Adjusted Selling & Administrative Expenses

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THIRD QUARTER FY24 GENESCO Summary Results December 1, 2023 Exhibit 00.0

v3.23.3

Document And Entity Information	Dec. 01, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 01, 2023
Entity Registrant Name	GENESCO INC.
Entity Central Index Key	0000018498
Entity Emerging Growth Company	false
Securities Act File Number	1-3083
Entity Incorporation, State or Country Code	TN
Entity Tax Identification Number	62-0211340
Entity Address, Address Line One	535 Marriott Drive
Entity Address, City or Town	Nashville
Entity Address, State or Province	TN
Entity Address, Postal Zip Code	37214
City Area Code	615
Local Phone Number	367-7000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	GCO
Security Exchange Name	NYSE

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