Genesco is managing expectations for the year after experiencing a noticeable slowdown in sales after back-to-school in the third quarter.
Genesco president, chief executive officer and board chair Mimi Vaughn said in a statement on Thursday that the company “experienced a meaningful pullback” in the back half of the third quarter, as consumers retreated following the back-to-school season when there was less of a reason to shop.
However, sales trends improved during the important Black Friday and Cyber Monday period, contributing to a positive start to the fourth quarter, Vaughn noted. But Wall Street isn’t loving the news. Shares for Genesco fell nearly 26 percent in pre-market trading on Thursday morning.
Despite this move, the Nashville-based footwear company reported net sales in the third quarter of fiscal 2026 increased 3 percent to $616 million compared to $596 million in the third quarter of fiscal 2025. Net earnings in the period were $5.36 million, up from a net loss of $18.9 million in the same year-ago period.
Genesco noted in its earnings release that this sales increase reflects a 5 percent increase in same store sales, an increase in wholesale sales and a favorable foreign exchange impact, partially offset by the impact of net store closings and a 3 percent decrease in e-commerce comparable sales.
The company further noted that the overall sales growth for the third quarter was driven by an increase of 4 percent at Journeys, an increase of 2 percent at Schuh, a 3 percent increase at Johnston & Murphy and a 3 percent increase at Genesco Brands.
During the quarter, the company opened four stores and closed 12 stores. The company ended the quarter with 1,245 stores compared with 1,302 stores at the end of the third quarter last year, or a decrease of 4 percent. Square footage was down 3 percent on a year-over-year basis.
Vaughn noted that the company delivered another quarter of top and bottom-line growth, marking its fifth consecutive quarter of positive comparable sales increases.
“The third quarter demonstrated the power of our strategic initiatives, with Journeys delivering strong double-digit comp growth during back-to-school on top of double-digit growth last year,” Vaughn said. “This performance reinforces that when consumers shop for footwear, they are increasingly choosing Journeys, underscoring the momentum of our product elevation and diversification strategy as we continue to gain market share and establish ourselves as the destination for the style-led teen.”
“That said, there are some factors causing us to moderate our view on the remainder of the year in spite of our current momentum,” the CEO continued. “We have materially changed our sales and margin projections for Schuh to reflect the ongoing difficult U.K. market and performance. We have also moderated the growth assumptions for our other businesses based on the lower footwear consumer traffic and spending patterns we’ve recently witnessed on non-peak shopping days.”
Looking ahead, Genesco now expects total sales for fiscal 2026 to be up about 2 percent and comparable sales to be up about 3 percent compared to fiscal 2025. This is down from prior guidance for total sales to be up 3 percent to 4 percent and comparable sales up 4 percent to 5 percent.
The company also now expects adjusted diluted earnings per share from continuing operations to be around 95 cents, down from its prior expectation of between $1.30 and $1.70.
Vaughn added, “Looking ahead to next year, we are excited to build on the progress of Journeys’ strategic plan and apply the learnings from our work to drive improved performance at Schuh. We feel confident that our footwear focused strategy will fuel top-line growth with accelerating profitability over the near- and long-term.”
