Genesco Inc. (NYSE:GCO) saw its shares fall 8.7% in pre-market trading Thursday after the footwear retailer reported second-quarter results that surpassed revenue expectations but were overshadowed by tariff-related profit pressures.
The parent company of Journeys, Schuh, and Johnston & Murphy posted an adjusted loss of $1.14 per share for the quarter, better than the $1.25 per share analysts had anticipated. Revenue climbed 4% to $546 million, exceeding the consensus estimate of $532.4 million, while comparable sales also grew 4% year-over-year.
Journeys, Genesco’s largest segment, drove the performance with a 9% increase in comparable sales, marking the fourth consecutive quarter of positive comparable sales growth across the company. Store sales rose 5%, while e-commerce added 1%.
“We are pleased to report another quarter that exceeded expectations and our fourth consecutive quarter of positive comparable sales growth,” said Mimi E. Vaughn, Genesco’s Board Chair, President, and Chief Executive Officer. “The momentum from the second half of last year has continued in Fiscal 2026 highlighted by Journeys high-single digit comp increase as our strategic plan to accelerate growth continues to gain traction.”
While Genesco raised its full-year sales forecast to 3-4% growth from the previous guidance of 1-2%, the company maintained its adjusted earnings guidance of $1.30 to $1.70 per share. Executives cited tariff-related pressures on gross margins and a “very promotional U.K. marketplace” as factors offsetting the benefits of stronger sales.
Gross margin fell 100 basis points to 45.8% compared to the same period last year, driven primarily by increased promotional activity at Schuh and lower margins at Genesco Brands due to tariffs.
“With Journeys strong performance year-to-date, we are raising our full year revenue outlook,” said Sandra Harris, Genesco’s Senior Vice President Finance and Chief Financial Officer. “The increased top-line and corresponding leverage are allowing us to offset additional pressure on gross margins from higher tariffs and a very promotional U.K. marketplace.”
Inventory rose 11% year-over-year, reflecting higher levels across Journeys, Schuh, and Johnston & Murphy. At the end of the quarter, Genesco operated 1,253 stores, down from 1,314 a year earlier.
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