Genesco’s first-quarter sales decline mitigated by e-commerce gains (GCO)

Genesco (NYSE: GCO) shares are rising in the pre-market after reporting first-quarter earnings that weren’t as bad as Wall Street expected as solid comparable-store sales in the e-commerce segment – which now account for 23% of total sales vs. 21% in the same quarter last year – helped offset a decline in sales at the company’s footwear division. The stock is also supported by FY25 earnings guidance that beat Wall Street expectations.

Parent company Johnston & Murphy and Journeys reported a loss of $2.10 per share, up from a loss of $1.59 a year earlier but $0.56 more than expected. Sales fell 5.2% to $458 million, beating estimates by $12.34 million. Company-wide comparable store sales declined 7%, while e-commerce sales increased 3%.

The company’s adjusted gross margin increased 30 basis points to 47.6%, while adjusted operating margin was a 6.5% loss on sales compared to a loss of 4.7% in the first quarter of last year.

On the balance sheet, the company’s cash position deteriorated to $19.2 million from $31.8 million last year, although debt almost halved to $59.4 million. Stocks fell 17%, mainly at the company’s Johnston & Murphy and Journeys divisions.

For fiscal 2025, Genesco expects sales to decline 2% to 3% and adjusted earnings to be between $0.60 and $1.00, matching the consensus estimate of $0.64 per share.

“While we have more work ahead of us, we have an outstanding team, a strong track record of growing and improving our business, and many initiatives already underway, we are well-positioned to unlock Journeys’ significant earnings potential and drive value,” said CEO Mimi Vaughn.

The shares are there increase by 9% and is poised to open above the 200-day moving average.