Shares of Genesco dropped in pre-market trading on Friday morning after the company wrapped up a challenging fiscal 2024 and warned on more headwinds in the coming year.
In the fourth quarter of fiscal 2024, the Nashville-based footwear company reported net sales of $738.95 million, an increase of 2 percent from $725 million in the same period last year, benefited by the additional 14th week. This bump in sales was driven by an increase of 6 percent at Schuh, 9 percent at Johnston & Murphy and a 24 percent increase at Genesco Brands, partially offset by a decrease of 2 percent at Journeys.
Excluding the 14th week, net sales in the quarter dipped 2 percent driven by decreased store sales, primarily in Journeys Group, partially offset by a 5 percent increase in e-commerce comparable sales, increased wholesale sales and a favorable foreign exchange impact.
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Net earnings in Q4 were $27.2 million, down from $38.9 million in the fourth quarter of fiscal 2023.
As for the full fiscal year 2024, net sales decreased 2.5 percent to $2.32 billion from $2.38 billion in fiscal 2023. Excluding the 53rd week, sales would have decreased 4 percent for fiscal 2024. The sales decrease compared to last year was driven by decreased store sales, primarily in Journeys Group, and decreased wholesale sales, partially offset by an 8 percent increase in e-commerce comparable sales and a favorable foreign exchange impact.
Overall sales for fiscal 2024 compared to fiscal 2023 decreased 8 percent at Journeys and 9 percent at Genesco Brands, partially offset by an increase of 11 percent at Schuh and 8 percent at Johnston & Murphy.
For the full year, there was a net loss of $16.8 million, down from $71.9 million in net earnings in fiscal 2023.
Genesco president, chief executive officer and board chair Mimi Vaughn said in a statement that the company’s fiscal 2024 results “reflect the significant shift” seen with Journeys consumer’s shopping behavior.
“Although the holiday season started off positively, consumers subsequently shopped almost exclusively for key footwear items with a notable shift away from boots, putting more pressure on our core product assortment than we anticipated at the beginning of Q4,” Vaughn said. “At the same time, we delivered another year of record sales for Schuh and Johnston & Murphy.”
Vaughn added that more work needs to be done to meet the needs of the company’s changing consumer. “Given our strong track record of turning businesses around in challenging times, an even greater call to action to accelerate the pace of Journeys improvement and initiatives already underway, we are well positioned to unlock Journeys’ considerable earnings potential and value,” she said.
Looking ahead, Genesco expects total sales in fiscal 2025 to decrease 2 percent to 3 percent compared to fiscal 2024 and adjusted diluted earnings per share from continuing operations in the range of $0.60 to $1.
The company’s latest earnings come as Genesco works to bolster the Journeys team. In January, Genesco named former Foot Locker executive Chris Santaella as executive vice president and chief merchandising officer for the Journeys group, replacing Pete Hicks who retired in October.
In November, Genesco announced the hiring of another Foot Locker alum Andy Gray as the new president of Journeys. Gray succeeds former Journeys president Mario Gallione who announced a planned retirement in August. At the time, Genesco named company veteran Mike Sypert as its chief operating officer.
After reporting challenging first quarter results in May, Genesco announced it would close more than 100 underperforming Journeys stores in fiscal 2024, versus prior expectations to close 60 stores, to help cut costs at the retailer.
In Friday’s Q4 earnings report, Genesco said it had closed 94 Journeys stores in fiscal 2024 and is targeting up to 50 more closures in fiscal 2025. The company said it is now targeting an increased run rate of $45 million to $50 million in annualized cost reductions by the end of fiscal 2025.
