Genesco Issues Steep Guidance Cut, Blames Weak UK Market And Slower Traffic

Genesco Inc. (NYSE:GCO) stock tumbled Thursday after the company reported worse-than-expected third-quarter results.

Details

The company reported adjusted earnings per share of 79 cents, missing the street view of 88 cents.

Quarterly sales of $616.2 million (increased 3% year over year) missed the analyst consensus estimate of $618.6 million.

Also Read: Genesco Analysts Increase Their Forecasts After Q2 Results

Sales were driven by a 4% increase at Journeys, 2% growth at Schuh, and 3% gains at both Johnston & Murphy and Genesco Brands.

Comparable sales increased by 3%, with stores growing by 5% and e-commerce declining by 3%.

E-commerce sales accounted for 23% of retail sales in the quarter.

Gross margin contracted to 46.8% from 47.8% a year ago, on lower margins at Genesco Brands Group from tariff pressures and license exits, along with higher promotions at Schuh.

Adjusted operating margin was 2.1% of sales, compared with 1.7% in the year-ago period.

As of November 1, 2025, Genesco’s cash position stood at $27.0 million, and total debt at the end of the quarter was $89.5 million.

The company did not buy back any shares in the third quarter of fiscal 2026 and currently has $29.8 million remaining under its expanded share repurchase program announced in June 2023.

Management Commentary

Mimi E. Vaughn, Genesco’s Board Chair, President and Chief Executive Officer, said, “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.”

“We 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. Our sales trends improved during the important Black Friday / Cyber Monday period, contributing to a positive start to the fourth quarter.”

Outlook

Genesco lowered fiscal 2026 adjusted EPS guidance to 95 cents (from $1.30–$1.70) versus the consensus of $1.57.

For fiscal 2026, the company now expects total sales to rise about 2% and comparable sales to increase roughly 3% compared to its earlier outlook for 3%–4% total sales growth and a 4%–5% comp gain.

The company doesn’t plan any further share repurchases in fiscal 2026.

“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,” added Vaughn.

GCO Price Action: Genesco shares were down 29.42% at $24.88 at the time of publication on Thursday, according to Benzinga Pro data.

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