Genesco Inc. has reported its fiscal 2025 third-quarter results, which have exceeded expectations, driven primarily by Journeys. The company's total net sales increased by 3% to $596 million compared to the same period last year. The most notable increase was in Journeys' comparable sales, which surged by 11%, contributing significantly to the overall 6% increase in comparable sales for the company.
E-commerce sales represented 24% of retail sales, up from 21% in the previous year, with a substantial 15% increase in comparable e-commerce sales. Journeys' strategic growth plan, focusing on enhancing the consumer experience and store presentation, has resulted in a double-digit comp gain for the business.
However, the company reported a GAAP EPS of ($1.76) and a non-GAAP EPS of $0.611. Despite the strong performance, Genesco noted that EPS would have been stronger if an important back-to-school week had not shifted into the second quarter of the fiscal year.
In terms of sales, Journeys saw a 4% increase, Schuh saw a 3% increase, and Genesco Brands saw a 10% increase, partially offset by a 4% decrease at Johnston & Murphy. The overall sales increase was also attributed to a favorable foreign exchange impact.
The company's gross margin decreased by 30 basis points to 47.8% compared to the previous year, primarily due to changes in product mix at Journeys. Operating income for the third quarter was reported at $10.2 million, or 1.7% of sales, down from $10.9 million, or 1.9% of sales, in the third quarter of the previous year.
Cash as of November 2, 2024, was $33.6 million, compared to $21.7 million in the same period the previous year. Total debt at the end of the third quarter of fiscal 2025 was $100.1 million, down from $128.2 million in the previous year's third quarter. In addition, inventories increased by 1% on a year-over-year basis.
The company's fiscal 2025 guidance has been revised, with raised sales guidance and adjusted EPS guidance. Genesco now expects total sales to be down 1% to flat compared to fiscal 2024, or flat to up 1% excluding the 53rd week in fiscal 2024. Adjusted diluted earnings per share from continuing operations are now expected to be in the range of $0.80 to $1.00, compared to the prior guidance of $0.60 to $1.002.
Genesco has also announced the closure of 12 Journeys stores in the third quarter of fiscal 2025, with expectations to close up to another 10 Journeys stores in the fiscal year. The company's cost savings program remains on track to achieve a reduction in the annualized run rate of $45 to $50 million by the end of fiscal 2025.
For more detailed financial commentary and a supplemental financial presentation of third-quarter results, investors can access the company's website in the investor relations section. The company's live conference call took place on December 6, 2024, at 7:30 a.m. (Central Time).
As a result of these announcements, the company's shares have moved 7.6% on the market, and are now trading at a price of $40.27. For more information, read the company's full 8-K submission here.
