Genesco Boosts EPS Guidance to $2–$2.40 After 5% and 7% U.S. Comps Surge
DECK•Genesco reported its seventh consecutive quarter of positive comparable sales, led by Journeys' 5% gain and Johnston & Murphy's 7% comp increase, allowing a 60bps SG&A leverage on 2% comps. The U.K.-based Schuh division saw a 9% comp decline as management executes a strategic retreat, prompting an EPS guidance raise to $2.00–$2.40 and a $40–$50 million cost reduction program.
1. U.S. Brands Drive Growth
Genesco’s Journeys chain delivered a 5% comparable sales increase on top of an 8% rise last year, while Johnston & Murphy achieved a 7% comp gain driven by new product launches and marketing efforts. This translated into 60 basis points of SG&A expense leverage on just 2% overall comps growth, showcasing operational efficiency.
2. Schuh Strategic Reset
The U.K.-based Schuh division recorded a 9% comparable sales decline as management intentionally pulled back promotional activity to rebuild full-price selling. This controlled retrenchment has weighed on store traffic amid a soft consumer environment in the U.K., extending the expected timeline for Schuh’s turnaround.
3. EPS Guidance and Cost Cuts
Management raised full-year EPS guidance to a range of $2.00–$2.40 and unveiled a $40–$50 million cost reduction program aimed at structurally lowering expenses. Despite U.S. momentum, the company warned of a cautious U.K. outlook and forecasted an operating loss next quarter roughly in line with or slightly below last year’s results.
