Net sales of US retailer Genesco at $483 mn in Q1 FY24

30 May '23

3 min read

Pic: JHVEPhoto / Shutterstock.com

Insights

Genesco reported a 7-per cent YoY decrease in Q1 FY24 net sales to $483 million, largely due to lower sales in Journeys Group and Genesco Brands.
Gross margin for Q1 FY24 was down 100 basis points to 47.3 per cent.
Despite e-commerce growth and strong in-store performance, the company posted a substantial GAAP operating loss of $23 million.

Nashville-based specialty retailer and branded company Genesco Inc has reported net sales of $483 million in the first quarter (Q1) of fiscal 2024 (FY24), a 7-per cent decrease from the $521 million reported during the same quarter in the previous fiscal year. This decline was primarily driven by decreased store sales in Journeys Group, decreased wholesale sales, and foreign exchange pressures. These setbacks were partially offset by a 5-per cent increase in e-commerce sales and strong in-store performance at Schuh and Johnston & Murphy.

The sales decrease was most pronounced at Journeys, which saw a 13-per cent year-on-year (YoY) drop, and at Genesco Brands, where sales decreased by 25 per cent YoY or $12 million. However, Schuh and Johnston & Murphy experienced growth of 6 per cent YoY and 16 per cent YoY respectively. When adjusted for currency fluctuations, Schuh's sales increased by 13 per cent YoY in the first quarter, the company said in its first quarter results for the three months ended April 29, 2023.

However, despite the growth in some areas, the company's gross margin for Q1 FY24 was down 100 basis points to 47.3 per cent from 48.3 per cent in the previous year. Additionally, selling and administrative expenses increased significantly, rising by 520 basis points as a percentage of sales compared to last year. After adjustment, this increase was even greater, at 550 basis points.

Genesco's GAAP operating loss for the first quarter was substantial, at $23 million or 4.8 per cent of sales, compared to operating income of $8.2 million or 1.6 per cent of sales in the first quarter of the previous fiscal year. Adjusted for excluded items, the operating loss was $22.7 million, compared to operating income of $9.5 million last year. The adjusted operating margin was minus 4.7 per cent in the first quarter of FY24, a significant decrease from 1.8 per cent in Q1 of the previous fiscal year. GAAP EPS from continuing operations in Q1 FY24 was minus $1.60 versus $0.37 last year.

GAAP loss from continuing operations was recorded at $18.9 million in Q1 FY24, compared to earnings from continuing operations of $5 million in the first quarter of the previous year.

“Following a positive end to the holiday season, the first quarter proved considerably more challenging than we anticipated. Consumer demand at Journeys dropped off significantly early in the quarter and did not improve as we changed seasons in the latter part of March and into April, offsetting another quarter of record sales at Schuh and Johnston & Murphy. In response, we are taking swift actions to mitigate the consumer shift in the marketplace, including closing more underperforming Journeys stores, reducing our cost base further, and working to quickly refine our product assortment,” said Mimi E Vaughn, Genesco’s board chair, president and chief executive officer.

Fibre2Fashion News Desk (DP)

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