Genesco Inc (GCO) reports mixed fiscal 2024 results amid challenging retail environment

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  • net sales: $739 million in the fourth quarter, an increase of 2% compared to the fourth quarter of 2023. For the full year, it was $2.3 billion, a decrease of 2.5% from FY2011.

  • Comparable sales:Decrease of 4% in the fourth quarter. Store sales were down 7% and direct sales were up 5%.

  • E-commerce sales: Accounted for 27% of retail sales in the fourth quarter, up from 25% a year ago.

  • GAAP EPS: $1.84 from continuing operations in the fourth quarter, down from $3.23 in the fourth quarter of 2023. For the full year, it was ($2.10), down from $5.69 in FY2013.

  • Non-GAAP EPS: $2.59 from continuing operations in the fourth quarter, down from $3.06 in the fourth quarter of 2023. For the full year, it was $0.56, down from $5.59 in FY2013.

  • Store activities: We will close 94 Journeys stores in FY2024, and aim to close up to 50 more stores in FY25.

  • Outlook for fiscal 2025: Total sales are expected to decline 2% to 3% from FY24, and adjusted diluted EPS from continuing operations is expected to be in the range of $0.60 to $1.00.

On March 8, 2024, Genesco Inc. (NYSE:GCO) released its 8-K report detailing its financial results for the fourth quarter and full fiscal year of 2024. The company is known for its footwear, headwear, sports apparel, and accessories. The Company’s Journeys Group, Schuh Group, Johnston & Murphy Group, and Licensed Brands faced a challenging retail environment characterized by significant changes in consumer shopping behavior, particularly within the Journeys Group.

Genesco Inc (GCO) reports mixed fiscal 2024 results amid challenging retail environmentGenesco Inc (GCO) reports mixed fiscal 2024 results amid challenging retail environment

Genesco Inc (GCO) reports mixed fiscal 2024 results amid challenging retail environment

Performance and challenges

Genesco Inc’s fiscal year got off to a rocky start as the company grappled with changing consumer preferences, particularly a shift away from boots, putting pressure on its core product assortment. Despite these challenges, the company achieved record sales in Schuh and Johnston & Murphy, highlighting the strength of these divisions. However, his 2.5% decline in net sales for the entire fiscal year reflects the headwinds faced by Journeys Group, where store sales fell his 7%.

Financial performance and materiality

Genesco Inc’s e-commerce sales growth accounted for 27% of retail sales in the fourth quarter and reflects the company’s successful adaptation to the digital retail space, a key element of the current retail environment. is supported. The company’s ability to maintain a strong presence in e-commerce is critical to its sustainability and competitiveness in the retail circulation industry.

Financial overview

Net sales for the fourth quarter were modest, up 2% to $739 million, but for the year they were down 2.5% to $2.3 billion. Comparable sales were down 4% for both the quarter and the year, with same-store sales down 7% for the year. GAAP EPS from continuing operations took a significant hit, falling to $2.10 for the year from $5.69 a year ago. Non-GAAP EPS also decreased from his $5.59 in FY23 to $0.56.

Comments from the leaders

“Our 2024 results reflect the significant changes we have seen in the shopping behavior of Journeys consumers…The holiday season started strong, but then consumers shifted away from Boots. ” – Mimi E. Vaughn, Genescos Chairman of the Board, President and Chief Executive Officer.

“Although we faced a challenging operating environment in the fourth quarter, our sales were largely in line with our latest guidance and we delivered better-than-expected gross margins. However, along with higher-than-expected expenses, At Journeys, revenue was below our latest expectations. ” – Thomas A. George, Genescos Chief Financial Officer.

For the future

Genesco Inc expects the challenging environment to continue in fiscal 2025, with total sales expected to decline 2% to 3%. The company is focused on improving its core product assortment and aims to increase its run rate by $45 million to $50 million in annual cost savings by the end of fiscal 2025. Despite the headwinds, Genesco Inc continues to navigate the changing retail landscape and continue to optimize its retail operations. Business development aimed at future growth.

For more detailed financial information and analysis, investors and interested parties are encouraged to visit Genesco Inc’s website to view the complete earnings report and supplemental financial presentation.

Genesco Inc’s fiscal year 2024 results illustrate the complex challenges facing the retail industry, especially in adapting to rapidly changing consumer behaviors. The company continues to refine its strategy and products, and investors will be watching to see how these efforts are reflected in next year’s financial results.

For more information, see Genesco Inc’s full 8-K earnings release here.

This article first appeared on GuruFocus.

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