GCO - Earnings call 4 2024

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Operator

Good day, everyone and welcome to the Genesco Fourth Quarter Fiscal 2024 Conference Call.Just a reminder, today's call is being recorded.I'll now turn the call over to Darryl MacQuarrie, Senior Director of FP&A. Please go ahead, sir.

Darryl MacQuarrie

Good morning, everyone and thank you for joining us to discuss our fourth quarter fiscal '24 results.Participants on the call expect to make forward-looking statements reflecting our expectations as of today, but actual results could be different. Genesco refers you to this morning's earnings release and the company's SEC filings, including its most recent 10-K and 10-Q filings for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today. Participants also expect to refer to certain adjusted financial measures during the call. in are this their in morning's on company's measures the counterparts schedules financial section. the to results attachments press website non-GAAP reconciled GAAP to in available All quarterly the release and

We to have our as and Vaughn, me like well.With Financial Chief Mimi turn presentation Mimi. Executive the call today Tom Chair, to results Officer.Now George, call Chief here on Board posted also a summarizing President, over Officer; the and I'd

Mimi Vaughn

and thank how thanks everyone consumers Journeys. for for to joining shopping Thanks, has heavily highlighted morning, Darryl. with the to 'XX, you us.Fiscal 'XX and led spent a in in substantially behavior record cash, Good stimulus, were flush fiscal consumer the year our fiscal which pandemic. footwear changed since Back category,

by footwear customer a shift solid kickoff items from market selective fiscal to inflation a discounting a with progressed a after greater for 'XX, season, strong have through difficult a general year challenging patterns the in the the Black saw particularly with away ever for made since. of more holiday demand, inventories, the buying we to footwear beginning and it evolving hard lack environment forecast drop The of followed, quarter, that a led footwear close gap impacted shopped these a Friday and athletic higher as volatility the negatively operating at in remained purchase the coupled almost and we period forward As along were that fiscal elevated 'XX.Throughout year, innovation sales to clear that we competitive enter purchases exclusively of to key made been In and for to fourth boots. working Journeys. pronounced dynamic

the guidance.Throughout quarter, at below higher what softer product storms the our beginning most As recent assortment at was QX. combination into anticipated anticipated due pressured to January, winter much than the than our of is drove expected of we than originally EPS and disruptive more sales of expenses the month got Journeys core we

dynamic this in impact we facing product year. this first current remain significant easier headwind given half ability expect spring, We into compares. believe despite our to it to a limited the carry will now for And

results. are disappointed clearly We with these

this However, faced and I when that want demonstrated record stress around businesses at turnarounds by record will same achieve for consumer climate, times points. recent to movements our our to strong we magnified we our basis compressed substantial digits also are emerge before of to J&M Schuh low note track smaller despite and I'm confronted deleverage consistently of a Journeys. and year margin challenging fiscal 'XX, with response with low sales both our cost count, another to and our a with stronger quite that bottom pandemic in such effect examples the success our with disruption.Our largely of fixed share even difficult had of on economic base.Coupled in clear the model a gross a sales evidenced confident of line. this important turning bit and are against only and declined sensitivity The single very sales XX just by our overall operating It's is

significant In inverse environment, a demonstrated leverage true provides our the before, we've is model earnings well. and However, as sales growth potential. as upside

at to fiscal turn the improving the aimed further.As are environment operating page initiatives savings remains this 'XX, cost Our difficult. we

do steeper now core in the our work more assortment. we in our have challenges Given business, to

Journeys our our All more time on what #X continued is need counting have we that said, of for we're priority. such, Journeys very clear As achieve. a we rebound. understanding to turnaround

same the strategically team and This girl broad team, brands. with place the the a no proposition and before, to ever accomplish range customer of intact. athletic destination focus both is Journeys. retailer is than said remains in already overall, quite leadership new we're solidly casual for for positioned the this this footwear, on task.I've Journeys particularly positioned right teen the unique other a well shop With strong one-stop for a serves the as better teen spotlight fashion

support. As market our fashion are we customers' backing broadens achieve who will fills multiple teens more than Journeys consistently changed. how a competitors leadership, of to improvement wearing Journeys occasions, the a urgency. is pace and and of and innovation, higher are proven consumer have we scores and product addresses brand who dramatically out diversified these partners the merchant working the Under excellent Andy's Gray's consumer research, vendor insights exceptional Andy our success assortment building strong tremendously and expertise have that demonstrating great relationships, has with key our With the embracing accelerate response in closets.Importantly, with in in already team needs already valuable.We're working background, to brand

But to Already week Journeys encouraging was However, given operation, initial though, results.BOPIS leading footwear to e-commerce more year in the these point the stage All a significant QX, set for America XX% digital in Store of sales record J&M in versus for beyond of holiday. some North digital expanded accounting the first program for the for in We efforts Pickup in delivered. to In important in ago. a loyalty will its and like Online Access Buy up and in shortly. penetration the year first, take time they quarter Schuh 'XX in years almost We especially and XX% detail XX% comparable I'd launched our in from works holiday some business out grew progress spot initiatives back-to-school and times. discuss Christmas. bright by and highlights to sales fiscal these will X% year, will industry lead X% Journeys more the for some I

margins closed enter a position. cash also new further progress Journeys over to clean to and strategies generate $XX and to are businesses, our our of expectations million starting and run We the as an to year, closures cost this well made up in year individual position of And QX to to rate underperforming XX sales.Furthermore, evaluating annual ended inventory Journeys solid flow profitability. as consumer. are down in last need the XX% we positions $XX year.And and progress and color fiscal business nearly align us our inventory. into reshape base our shopping the gross more Journeys. stores substantial to us This ahead with with year by helped better this of to Importantly, product the advance on rightsizing to fiscal of realigning XXX footprint today's we we savings productivity targeting enabling for with the in made million strong buy now for very we now increased end the we drive Journeys patterns deliver continue

nonetheless they While QX quarter results we sales were in this sequentially improved pleased year, as have short our that every initial in once expectations. of fell again

as Following a us key remained business as of well evident decline enough in sales selective a store appetite not trends This choppy. consumers for to weekend, motivate we alternate to said, was and high be a that consumers' Thanksgiving was strong we able destination purchase our and assortment, an our key were to effective. the decelerated usually out positive responded given customer drive not boots. this Journeys newness That conversion demand ran are in traffic which tells December Once discounting in team.However, remains for our product, we outweighed shopping in items. did

with confined XX% stores Boot boot quite overall as preferences. well, versus both awareness our challenging conversion. which Journeys SMS social core experienced mentioned, drive QX usage, sales, and planned in warm style XX% tested Journeys All Access increased the of during season, increased mid-single and members, And we represent we numerous last anticipation weaker, was impacted engagement our While assortment campaigns year. including period. than up in weather to we in digital performed to business holiday of decline traffic-driving as more and influencer vulcanized and We generate and paid were digits product.The pressure sales business programs by holiday down down expected a it business, was I typically

year, the strong we against despite a total an delivered exceptional in XX% Schuh slowdown growth some exited difficult increased a comps In X acceleration throughout the QX in saw fact, led comp January we e-comm U.K., with year as which compare, during experiencing the to month.Moving months. by Journeys comps in the first

by also has relationships value to a the that saw product. the business were in remained from business sales said, quarter, cautious grabbing attention also pressure proposition up the Even strengthen QX discriminating consumer of primarily was share. access and new more X% held differentiated environment, of Schuh's against challenged strong brand positive total operating sales. Schuh's bright XX%. challenges of Schuh U.K. non-footwear their boot efforts a Kids was coupled over in economic categories more tough business with purchases.The remained recessionary spot for top-tier our growth Our XX% competitors, difficult while and enhancing accounting in market That sales to e-comm with strong stores customers a in amidst a as

spots at business played was footwear Schuh sales customers market up XXXX purchasing during Johnston to ERP mid-January, and has a rank for to share, fourth growth. total led QX. year.Loyalty over implementation a holiday position. maintained a stand more of product May more Compelling The are in a As Kantar, record X demonstrating held Schuh's comps from and members position drive XX% non-loyalty accounting roughly standout continued Schuh the nicely of solid according than non-footwear a million sales, as the challenges to Murphy. moving in its of frequently.Turning positive role strengthening #XX recovery quarter & engaged to invest we now after market Club in key U.K. total to it's with strong Currently since X.X

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new work marketplace all increase which expense product demographics, we're and year, drive the the lifestyle this in our omni mission, styles with and actions store personalize currently Journeys Journeys and cornerstone brand quick of new retail athletic product Journeys' online, through key as Andy tell key back build meaningful In updated and exposure is brand build to parallel, some implementing existing upgrading social.We're marketing agency strategy. those brands where consumers deep the platform, with drive branded program a to a geographies, incredibly the positioned customer position shop consumer with and our to of visuals a we're that #X, marketing stores with over opportunities have new develop both the To brands growth and intensifying relevance us.And the assortment, updated product investment our and leadership to and encourages timeliness of also that to feature-rich in across as recently digital generates excited social the story purchases turnaround about working of across our we've to loyalty months, enhancing these enhance an on the acceleration and categories, plan to in brands.This taken and initiatives multi-category Merchant With industry-leading We're customer switching with valuable members to well. year appointed experience and continuing the provide paying beyond meaningfully brand and to consolidate evolving brand adding create differentiation. disciplined communications footwear purpose. to Journeys. and X for key focus program Access dividends, and We're an new J&M known along Chief awareness a improve X to presence to of up brand. includes build signed leadership Journeys exciting And insights, differentiates creative finally, brand All continue as leadership for million this put Journeys, key management. improving program brands, leverage our efforts to growth for making strategies an with by is team brands, in-store brand people. impact and the and and in customer to further channels bright.Now Journeys power fiscal future I'll including and and to experience. of concept casual fashion and by for.#X, and initiative of a our we'll set and and strategy ultimately repositioning pursue gender.As refreshed the dive across diversifying the an led the on back updated this differentiator. our communication age and customer roll #X, expertise next-generation the apart a promote This experience. we're leverages will are partners, an messaging access the We're with investment increasing boost our store providing vision, highlight traditionally business brand service the sharper cohesive a add our onboarding design improving out today, mix strategic experience.And both We business that us enrich excellent part we're employees

while year, introduced to unproductive implementing capabilities, rent engagement. We're focused inventory our business projects and earnings point-of-sale this optimize training and optimize I customer further and Over BOPIS suggestive reshape Journeys' locations and initiatives new selling my closing belief like considerable and emphasize execution optimization unlock data-informed drive additional continued to on several including ability including and potential. cost stores, improve marketing salaries, want overall, efficiencies. sales, mobile here, footprint, to our and redirecting in the roll traffic team's efficiency expense, opening efforts spend strategically and we've mall selling.#X, prioritized past out summary, efficiency.In features year, to operational store the to improve and we'll digital off-mall And management, and and

our in With plus capture building we're our off repeat XX% 'XX, of more of and purchase footwear-focused in addition, initiatives J&M loyalty In accelerate data fiscal we're concepts, to examples. across new advanced a analytics. and and needs North CRM for select and our executing growing our all augmenting rates discuss America a customers' customers affinity growth understanding our programs using up strategy.I'll Schuh driving for rate and platforms few

For J&M, new by and heat spring. Powered overall brand broader and marketing attract the to these agency, of this campaign campaigns along we're campaign changing that still increase key excited consumer for resource.Revamped younger launch a refreshed in-store aims brand's while awareness media drivers are a social this primarily rollouts. the new and and is organic with dress also the perception shoe J&M and of social content efforts, digital a

outlook Finally, engagement.Turning and the Club building fiscal loyalty out 'XX. offering accelerate will Schuh member sign-ups customer now for to our

are the We and continue not consumer to change volatile any assuming navigate term. significant near behavior in

back fiscal 'XX of the say I'd resilience truly to that challenges beyond.Before in we're of this mentioned, for As further setting to past front extremely has tested place, than and guidance us, stronger faced. year product and assortment.Our at to would with we drive like and well this QX grow be to None I while given proud impacting planning reposition pressure our we our overcome to the with incredible half to that, the the make reflects EPS this putting coming I'm we tremendous aggressive thank the difficult fiscal the build ability work significant in but an our you and doing you up like half possible 'XX, your year.And for first all year over expected efforts in for product Journeys, view without will to in front Tom. results us be talented it the anticipate challenges half all I'll our people. much the the turn are great with push I'd for with as be a closing,

Thomas George

greater lost our Journeys, in January inclement impact faced result share earnings per storms. earnings unusually snow than along performance our financial in weather on our at Journeys, the anticipated.Relative we impactful quarter guidance, headwinds with Mimi.The initially we the a net revised fourth to store the January's had coupled to Thanks, was due and traffic pressures expense below expectations, resulting and primarily from with ice

growth we've by Looking even the us increases contain results withstand compared and to for to productivity drive returns.Turning Consolidated sales X% in approximately expenses to will this year, efforts position last as Journeys. than to divisions emerge continue pressure revenue sales $XXX the made make million, ahead, all up other was driven stronger better and and quarter. to

declined week, revised to in impacted our J&M, XXrd with Total total line weather expectations, down the our guidance, sales sales Excluding the Relative especially largely exception were of X%. was were with January's X%. by comps which disruptions.

pressures to shift Schuh's versus basis fewer were healthy we gross a the to basis gross stores sales, store basis margin a moderated result ended XX% Schuh was year, largely fleet. not year, planned comps increases X%, productivity our points digital a items, promotions down footprint higher gross from which was sales roughly freight last XXX XX% retail product XX.X% lower and were to driven year while Genesco down stores. were cost versus X%, expense of price was basis XXrd of due XX gross last negative comps our benefited underperforming we the were accounting XX comps last by up was week. year, last sequentially. by with margin as to although XX gross as effective the above closing to We last in up to this year.Moving due and with for ago, total freight comps year's margin store points of basis increased from XX basis discounting the of the we basis primarily driving at shift. J&M's was improve quarter Journeys.With X% points key driven to Relative up largely sales, XX our as in Even stores promotional favorable expectations margin wholesale, lapped was store was down ahead points, shortfall, our margin was total partially Journeys down to points increase down with the focused X%.By compared direct Adjusted sales, lower markdowns.Lastly, purchasing expense Overall, remaining the so Journeys, points stance. Journeys' on For continued XX X%, SG&A comps and mix offset P&L. consumer drive with mix while our Brands' January channel, logistics optimize last to and down J&M points of year, year. up business XXX retail retail by attributable

XXrd year to it particularly dilutive flat week top While volume XXrd for added associated our low direct was were impact sales week benefit expenses line, expenses despite the line. a that our compared absolute in variable our week, our our relative was Adjusting to driven was bottom primarily savings additional last sales the initiatives.The to dollars in SG&A with reflecting relatively operating expenses by of our cost the growth, to Journeys. guidance and increase

In cost anticipated product vendors addition to to our the returns support resulted direct sales, wage in freight to incremental and pressure. higher-than-expected than greater

lot our coming in of years, to of store we key brings up a store company expense including in average approximately our with fleet years.This of reduction Lowering expenses, reduction channel next in occupancy and have savings. XXX renewals occupancy In remains the runway we overall the renewals additional priority. lease of costs. resulting on to Finally, in a the straight-line rent in additional for XX% rent fiscal renewal reducing the across costs capture straight-line XX% amount expense. expense fixed an continue a XX% of we to XX experienced X term achieved couple over With QX, 'XX a full-year

remains million savings wages on mitigate Although hourly the share and adjusted increases, continue in salaries, quarter last to This competitive the for fourth $XX.X due offset a last $X.XX and work we savings that.In to an on per adjusted wage $X.XX rent income made share has productivity, minimum operating been pressure realized million year. and point higher resulted earnings adjusted versus of and selling quarter, hours, QX we headway compared for and summary, all to nice we of for operating of of income per earnings to diluted $XX year.

flow. was positive bring million the cash income sheet. levels, worked capital our an loss year last with quarter and inventories approximately and or For to estimated quarter per a to us from freshness the slightly with adjust generated and We XXrd brand than week, down to XX% approximately With in with to of $X.XX net assortment. position the inventory partners we of $XXX lower last end to share.Turning and XX% million newness now clean the year. ended We free inventories, balance cash ended $X.X to enabling year allocation respect the Journeys, operating the well-positioned

of In investments financial strategic were line addition, cash primarily the X,XXX opened liquidity primarily all our capacity sheet, under $XX retail provides closed off-mall, which We expenditures stores digital revolving and million our the strong in X and total support stores. credit initiatives. omnichannel to flow, with and balance our and quarter stores, to with directed our efforts.Capital ending QX were XX

authorization shares year, repurchase back we our during over million. at and remains didn't the but XX% current Lastly, any quarter bought $XX the

fiscal Over X our almost shares.Regarding repurchased you savings our reductions increase of 'XX. we have when with outstanding the cost cost savings combine on meaningful years, we in progress structure variability plan, under to cost efforts expense our of our the made savings, XX% past

in Our fiscal $XX end which updated million. to of $XX $XX reduction million original of target before a our rate run by annualized million now above plan targets is reinvesting 'XX, the of

and These reduced the we stores We reduced expect X% of store respect inventory freight total store fiscal reduced productivity 'XX, initiatives.With closures, roughly from closed savings Journeys fleet. costs salary, were mall-based costs, and in gains, optimization locations. warehouse rents, or primarily logistics from selling to XX

from cost closures this to million expect the eliminate year in $XX $XX year.The the annualized $XX Savings closure annualized addition are and For XX SG&A savings is expense, these Journeys this to of closed the which savings past million stores of achieve we to million approximately to fiscal run $XX of million from these and roughly costs rate from will programs adds of 'XX, end up the close expansion we store is leverage goal increases savings more to modest to like to stores. by to aiming guidance. gain Recognizing providing we're and see we start QX. given a demand margin this are core within That around in portion product even will that turning assortment, I'd specifics year to line. a starting better improve difficult the drive with some to difficult challenges expense position facing, operating in sales.Now the expect make curve with Journeys' product makes of the Starting top growth. it business. which We pressure spring don't up to sizable sales of our

As and Journeys mid-to-high extent, versus basis at expect a Journeys points last sales QX such, basis primarily driven product decline we a margin single-digit overall to gross and shift expect Genesco Schuh. year, to decrease points, due we mostly lesser Group.Regarding of mix to gross XX XX by an Brands margins,

also earnings $X.XX expenses deleverage in at As of points fixed, year. basis result basis the of we with year.Moving share levels QX in the quarters SG&A to and one points approximately minimum QX sales resulting XXX is largely full of in more an lower-volume our per to XXX last roughly than will loss decline lost

year 'XX for our strategy this begin Journeys, adopt cautious is in throughout it's especially fiscal at can for confident drive Journeys are in we opportunity for to significant with 'XX. prudent a rebound believe back the holiday, fiscal more While since that improvements we a half, turnaround to view a transition

excluding we sales fiscal to the both the in they the the this X% XXrd week between X% macro total to We low range are the also multiyear high into Taking and environments, robust account, decrease to to U.K. all 'XX or the compares. more year.The consumer view and particularly X% last cycle X% taking as down a variance expect due of J&M Schuh is end uncertainty when conservative primarily for in and

we $X. EPS, adjusted share of earnings $X.XX range per expect Regarding the in to

further in QX challenging expect to sales.Net-net, as time. give the generate weighted profitability be to to first expect back-to-school half holiday give and will year higher us positive half We pivoting earnings to take we assortment to and over opportunity the last as improvement the back Journeys' way a

Journeys. We margin and with expect product improvement for Schuh, pressure year, up to some XX gross points at flat basis mitigating be mix rates channel at to the

deleverage As to a to XX in percentage from margin. cost operating basis 'XX's that with flat fixed the expenses.All range the an of sales, operating and margin offset in I described efforts range adjusted of other SG&A these of actions deleverage points on is inputs we fiscal working reduction to partially earlier expect result

a to and create little considerable believe efforts are we Journeys' will to now best unlock take the to Our time share in fiscal 'XX value.Operator, guidance the to be in position shareholder million, impact assumes create tax And which accelerate XX%.In approximately additional rate we earnings P&L, shares and return questions. those we expect results to while our us actions outstanding the will taking no to of they ready potential, meaningful repurchases, growth, average turnaround. closing, Journeys' we aggressive are open XX.X call approximately for

Operator

conducting question B. line from the first And Riley Securities. session. Instructions] be of now Jeff the We'll with question-and-answer our is [Operator Lick

Jeffrey Lick

got of a I've kind here. like X-parter

Journeys got January, sales actually better. in appears off, it that First

of half, question down Tom, it in kind to And point a you expenses was be in stores, issue, million product was unanticipated is $XX might then million implication could challenges. you for the sales was wondering this, $XXX just curious, dollars. did higher.So expenses. the is issue here your thought that, it This that If expenses and X%. Weather on upon down just was those kind you are? but you year, the gross you look just SG&A XXXX, product million referenced, first expound being then script of it's profit. big that appears I your challenges the if ended the And less that. I'm at that it the but X%, of And referenced the on pre-release, up or quarter, sales specifically did put first is bad. $XXX building what was you that on head-scratcher more appears comp gross profit it than

was for could that unpack you wondering I So us. if

Mimi Vaughn

all let's for and those one at you them time. thank take Jeff, questions, a

Journeys was those see our -- over were product. did gave to weekend. we're and a shopping those remind last picked January, January, just We've items, we say given November some January, you got years, it delighted really the this was but we nice of convert We customer some e-comm in we were we in And back and customer grow to in in clearance pressures, up that December those then took went been customers key There and fact, Black as fact, in the better. in other got some of the winter the better. year, storms lot always Journeys and must-have that about coming pressures.And also saw economic off particular, many but online. was to And to challenging December, business. sales some started cadence into driving you sales so on So of And things, nicely with what I'll sales can saw we only of working sales asked Friday was the things, in for get e-commerce up of select our very very just January. quarter growth. then items, the other our I'll of were focused our Journeys we a with stores. that we're out and Traffic in they that in

specific challenges progress lot consumer as Tom, we buying and the to different what saw way. there we we newness a QX started back made a so a I drop they year course I then just other pendulum buy on things relatively appetite We after have the well. about had significant before to Where it January.And as And over helped year had swung the pandemic. years just say of than had some hand year, out a great that appetite product talking pretty year. the flattish And to sales over wanted was of a record this the would think are that clearance for for and some Journeys of I that's the into before came before. the been coming product

of about going of we of that product not that new to we the of talking the destination we lot a we we've products hot down part expected What Journeys year sold on, new bring nicely.But that again, variety that working well-positioned the take been some have half chased we of been relationships the product first got in in talking core and very to merchant to athletic, the as the improve on -- saw of got they sell-through here. expertise to do even better Chief would believe quarter we and sells a a that going aggressively further for needle the on fill that product just advantage the that we what progress take-up is And product rates much sell was the backgrounds, so the further.And see both Head to this. that about. we product is lead that's even casual we that we're a relationships saw fashion started chasing was teens able And the is Journeys we that Journeys. fourth for also right year. And where quite have. into to there knew the And go it's that have of is are all into move gap that What a consumer. product that and have have here right XX%.And is they we the We've are also both be made the on the and Merchant given times, and They a challenges we've Journeys.

the with today happening to his I the go then well. the know the and question. the around And And and be will apparel that we be appetite are going things on on side and so see teens into resonating brands year.And additional think I term, over and good is part through over for embracing products into consumer fashion turn that the back really consumer chasing we in us, the more some anticipate are longer and And the it's for greater broadening We last just as year. we will so wearing athletic will the newness as both of really specifically to interesting occasions. the there chasing side.And freshness hit with Tom we're casual resonating that the on fashion for

Thomas George

the and on points. Yes, me Jeff, the expenses hit to of try let tackle some

have And expenses and the we So the originally I January. did channel. think was expenses we understanding an the store Journeys first around additional in in one than some was anticipated more of it

was it of Some Journeys. the occupancy cost for

And Journeys, processing over about a to at the some some what January as year. to above good and just we some returns the vendors.And had in that, that's of as related we to well cost of inventories our closures we news store significant related some some down end the of at year expected, final got down of the additional the prior of XX% timing is result as there

was some And additional related to was to labor on just to expenses. process other even return there some that there additional return expenses store then So those vendor.

'XX, in look 'XX, that huge calendar So our huge is important our the there's that movement business, expenses. there's businesses, in a fiscal in there direct operating at our January point e-commerce all a that's expenses to Journeys. especially number.When relative been With the you our investment to there's transformation towards out an and growth business thing year been in business

reduction going to consider going think you need you're at another forward growth forward. point a the you So that to to year, I our look expenses.And you that expenses out considering guide our implies of terms expenses in next thing in on in that, see when significant can when

traction we traction that So the we where getting when at fiscal you thing on can we're of back just on store within 'XX, at channel, lot a feel you we're another taking guide, out. And got taking year the out. expenses expenses see look expenses. And Journeys good

where we're good feel at we on So that.

Jeffrey Lick

then. up follow to Just

Thomas George

Go ahead.

Jeffrey Lick

regards that's did final that I'm associated to to any closures, -- and amount those to And Any to what tempting as guidance put just of returns curious. vendors, not. it of labor what non-recurring, been like with kind the which in there mean timing store maybe have you might thoughts seems it the I been? there, might have

Thomas George

course. normal It's

really -- down put are can't necessarily into we we those So non-recurring. them situations

were here type hoping we conference So conversations call things. get of some those of the about into to use one-time to

Mimi Vaughn

and push, XX%. great Journeys in Yes. in our terrific aggressive shape that more down I we inventory, news We is the are think than is an had

take -- an we And amount so excessive and that that of having markdowns. did to without

our And so --

Jeffrey Lick

Right.

Mimi Vaughn

We've the clean. course got ample open the to that really into we're product so chase of in buy during year. to And we the will bring

athletic see think being brand be with inventory working bring partners feed bring didn't to the and about exceptional fashion are to in work of who've lot able new for. work push And And and to trends a so positive. excited more us in the to we with I a chance us able to back clogs appetite some the and to that had we our been that that of that's to styles in, like

Jeffrey Lick

much I'm up taking too time.

questions. So I'll in Best let luck some QX. others ask of some

Operator

is question the Tarlowe of with Jefferies. next Our from line Corey

Corey Tarlowe

longer that building to to to Mimi, about time what the horizon? think trajectory business. And might nature, level a And for right the term how get for in broadly? blocks curious be the enterprise you the multiyear margin margin more go-forward are you the over what profile

Mimi Vaughn

Murphy our To business, & see back-to-back to talk had and we that years. different Johnston both Schuh were delighted of record the about parts

consumer proposition income work was took This those of we ahead. able of strong. we and done our many to have and they around technology right product get there. really out back time very be marketing come have down the it's because been do and businesses of businesses a pandemic. we through operating now play. years did mid-single-digit is a to what work those We've we're the Journeys' there's were and turn is during businesses ago, challenged couple to value heads so We Journeys. many to And Both a in. of lot and that those changed at a unique believe before lot cycle around put actions cycles The we're historically.And so quite it achieved levels talking where factors about And have where the around,

of teens plays the footwear We It's fashion business. confidence Journeys' items. have in lot go-to important of such an role a that selection just in place their the for

to with very going terrific resilient dialogue relationships today to teens. say really our on are to well.We're a brands, bringing Journeys the is able brand is about product we've The be important Our new some fill our thing next appetite business. for terrific brands got I'd as that our to talk and in

it's shift the the both beauty the the have what that well. digital And of rotate speaking, talked Tom successfully and only that we go the past in brands of our digital. is leverage hot. record more we that there's you you got about economic changed there's at recent are accretive We into in recent can fashion look back headwinds If a we've things past as And assortment shifts, and is navigating double-digit and structurally lot in model can our that not less lot have within profitable, track and of our that is navigated business for opportunity business.So because a but digital. nicely our profitability

is Schuh a to digital have Journeys grow at Journeys' than We business, chance that. XX%. of is half less

our longer to over base actions taken a bring help we've the certainly will of term, and lot cost that So down.

allows P&L, very low that overall at that by on so also less and see comp. base here, closing leverage store productivity productive deleveraged overall that will really as Journeys' is negative big working the expenses.And in us we've our both of You about talked The to comp. well by stores levels and expense Tom on -- issue the that and

the solution and drive build And to so to that sales. that is to back

historical Journeys, levels why reason and to positive it go no see back product to drive be And and to and so when most we won't it I about comps certainly range, able of to newness for to there. And mid-single-digit initiatives, drive around us is into the talk freshness in driving we assortment, sales the the is profitability sales. sales, online store being around it get takes important able

Thomas George

more to We're in business. improving thing & side Murphy is forward lot the branded gross Johnston going of the business, and have improve our of one our add, Group. the branded Corey, Branded traction getting a terms I'd Maybe Genesco a on on the road of we margins our margins. And gross map side to of continue

margin. to forward the going driver overall a improve company as well as that's So operating

Corey Tarlowe

but double-click margin gross like sounds gross It And up. to expectation for to this the sales be margin. then down just be to year, on there's

the just what year could full to you from you drivers that the and through the through get quarter maybe drivers the could? if Tom, walk underlying first maybe to and So how are rank

Mimi Vaughn

it then position and where think I'll start inventories course have hand me year. been I in really through of a to kept our we the Tom. clean the Let But we

-- in haven't near quarter. taken any So at industry. we others we we fact, the And all of in our outperformed seen markdowns level in margin fourth haven't the gross

-- the started was the quarter. more fourth is it don't we up we industry way, than and when the So by cleaned

we other markdowns will from and both don't Journeys some are.There's a a from have mix have offset pressure brand initiatives we in Schuh, our pressure little so the given anticipate to how that clean underway inventories but help because of of margin. that's we by lot And mix on that bit gross of

that. hand we're it will to think it X to bp, anticipating Tom I'll I and talk up So be about

Thomas George

of up terms expecting the it expect and the we points Journeys on promotional the total, hit X for -- environment side. to we're bp good bigger In year flat of in Yes. the be to one on a maybe

is to initiatives consider business, to in and to have gross continue thing to Another place we margin improvement drive work well. there our continue Schuh with as

So some we'll see of that.

Mimi Vaughn

Yes.

renegotiated. we've within freight our And is some We've contracts distribution more that got centers. of efficiency

that the warehousing expense. and allow U.K., us distribution more will efficient both have in the U.S. So and to

Thomas George

expect branded to of one quarter, to there And of terms in then out seems the goes thing margin, the year gross IMO the mix both moderate quarter, rest of the side around we in by. that, as the cadence in But see margins we're business, point and the and and on Schuh as Journeys some to improved in expecting in first the first some mainly that's that decline the well. in

Operator

Research. line Our next questions coming will with Seaport from Mitch be the Kummetz of

Mitchel Kummetz

handful these do just maybe to questions. I'm a going I've by one. got one of

that Journeys, fall improvement February back Has on through again? kind have First, XQ. mentioned you the sequential in of you seen the continued business or

Mimi Vaughn

wouldn't improvement the that And terms Mitch, And product core that from. of anticipate assortment talked of as a is the the the the really up is further result further anticipated pick a what core into we emerged just outlook quarter over The and freshness, away moved it's about key brought the in picked And that think you terms for when been focused that about and our bit. product newness to I consumer here, what from carry that.And we first quarter, away in spring. have we pressure product. so that's up So in moved holidays of core winter is consumer the fourth a that we January while we the further. that the made we'd the on that that trend have would our

and part huge the which back the the expect improve that year, range months. and of can had as bit product nice trend. times affect have the We that improvement, for we in quarter a be the the quarter X are sequential in quarter, given we'll in but sort the in In fourth of third the little for of we we a footwear, first we the push bring of more where pickup just have will year overall second lead even least at are,

Mitchel Kummetz

a mid-singles sounds most in you from on pressure presentation you're down I so And expecting like comp to be then year if Journeys, read sales the standpoint, the the Journeys correctly. believe for It XQ. I expect

first quarter? for Journeys digits? be plan Are down your to double you is like what expecting it So in the

Mimi Vaughn

No.

Thomas George

No.

Mimi Vaughn

I'm not -- expecting

Thomas George

No.

Mimi Vaughn

be to down digits. double It

we just the to number. think need check that year, I For

Thomas George

Yes. think we -- I don't can

Mimi Vaughn

For the year.

Thomas George

the Journeys specifically. guidance year. we for expect not know Journeys, quarter, total single digits I in company down Mitch, that out the a could mid-to-high we came be for But in to gave number quarter. we for the sure first I'm first with

Mitchel Kummetz

-- looks It in like the presentation

Mimi Vaughn

Not where been. from far we've

Mitchel Kummetz

on but a comp presentation, digits, mid-single Journeys the got that's In side. you've not down I guess a side, sales

Thomas George

Down that's right? the added right. line, We that,

Mimi Vaughn

we've that stores away from to sales. that take the are of because That's correct. closed That's

Thomas George

That is Right. comp. a not

Mimi Vaughn

not productive. But are

Thomas George

that's Right, right.

Mitchel Kummetz

half of difficult I comps first you're lapping some And the know year. then on the Schuh, in that

double-digit half. in were, guys year first last You think, the I comp

easing year, given compares tougher first shape about So half then back the of you in are thinking how the Schuh that half? in for and just the the

Mimi Vaughn

exactly that's Yes, right.

we spectacular pressure stacked comps, comps over look first the because years. Schuh really expect a several most stack the at had in half, first last we half the on the pretty So the you if in

because down. we traction. is expect for bit. the environment of been in -- actually we also so And that overall has the year They've gaining back-to-school.The the back ease higher Schuh, in economic part pressure expect their coming environment inflation with we see quarter, a than had we've are particularly tougher. Schuh opportunity efforts inflation to second holiday had, In and continued inflation the off And

and for up be and U.K. into we to that wage operating in period. the get able leverage product part been for taking year. in purchasing consumer holiday have some the as in that market a in spring a been of brighter year. that that we we'll We that increases very selling will Overall, also U.K. expect for consumers' that the that for we sandal difficult show the environment.And picture share there part back the of product and overall in appetite the spring into sales mandatory the the just retail year. expect the will in and consumer the expect And There is of were back the down hold, regroups, and the back Schuh part take the has appetite

positive a back part of building right, more of it's you're year, part more So year. into difficult a the the

Mitchel Kummetz

for the uptick And you're core out selling challenges half Because weak, back in lastly, talked business. the you to confidence better trying the about spring, understand then the but in I'm maybe half. of the boots year, for about first for Journeys mean, then also key obviously, in I And were just your business holiday, talking items. an of

get So items? that are you seeing things, of Like terms be product allocations better you also you anticipating when be then some are -- there? key about shift are you you'd talked Do other types are product? represented because to that of to half. items vulcanized back And something item consider versus you you the the this better anticipating to to you first pivoting is understand look that Do the being core from happening products in other or difficult of you different kind the -- that's inflection better XQ. to access better getting just vulcanized business, core, allocation half you at how of some at in think in I'm other of what business back standpoint, core trying is key versus much and a the in key core of half those the in

Mimi Vaughn

of of lot a questions So there, to we that getting are in are product. Mitch, better but absolutely anticipating we going be allocations

to have Andy shifting relationships and We I in those that be bigger the the they of that have that taken.When our assortment based line we we've into have are have and sight strength brands are. and sight what we we are that already We've think bringing that even Chief and going a order working, on line doubled got actions Merchant in brands of by anticipating that Journeys the more absolutely expertise merchant on the our got relationships, about book actually into that increasing the are of brands with down that are important. new really the into

the absolutely to that And that we've diversifying on with mix the of is assortment the anticipate be to that today. casual the are get so to through not do into build that in the different excited athletic been putting side more full-court of working a product press And is rebounding.It vulcanized core we we additional year. moving product and side the our about items a referenced of it's will on I across selling will that sure. products brands for the rebound, traditionally that allocation mix It are also sales be able course

Mitchel Kummetz

luck. Good

Operator

for floor remarks. management At to back I this will any time, turn further the

Mimi Vaughn

today. where talk we that Great. progress Thank look making within our business the Journeys again. you on us joining to forward for are and us joining future we're We thanks calls to going you about

Operator

today's This will conclude conference.

and time. may You day. this disconnect participation, you at lines have your wonderful a for Thank your

Genesco (GCO) 8 Mar 242024 Q4 Earnings call transcript