Genesco Kicks Off Fiscal 2027 with a Strong Beat
Good morning, everyone, and welcome to the Genesco first quarter fiscal 2027 conference call. As we begin this new chapter in our company's history, it's clear that Genesco is off to an excellent start. In fact, our first quarter results have exceeded expectations across the board, marking our seventh consecutive quarter of positive comparable sales.
According to Mimi Vaughn, Board Chair, President and Chief Executive Officer, and Interim Chief Financial Officer, "Our beat was broad-based across sales, gross margin, and expense leverage, reflecting a high level of execution. We had gains in every business versus expectations." This success can be attributed to the strategic initiatives put in place by Genesco, which are translating into tangible results across the company.
One of the highlights of the quarter is the performance of Journeys, with sales increasing by 5% on top of an 8% increase last year. The transformation work executed by Genesco continues to drive sustained comp growth and meaningful profit improvement at Journeys. Product was a key driver in this success, with iconic footwear franchises seeing healthy growth, as well as new brands experiencing gains.
The strength of Genesco's multi-branded, multi-category elevated assortment drove stronger full-price selling and considerably higher average transaction size in the quarter. This demonstrates that Genesco is outpacing the broader footwear market and continuing to see market share gains at Journeys.
While Schuh experienced declines as a result of pulling back from promotional activity, Johnston & Murphy achieved high single-digit increases, offsetting these losses to some extent. The company's stores also performed well in Q1, with strategic efforts driving improvement in this channel achieving impact.
The consumer environment remains unchanged, with customers shopping intentionally during key events and pulling back in between. When they engage, they're looking for must-have product and newness, and when Genesco delivers what they want, they're willing to pay up for it. This pattern has become the new normal, and Genesco navigates it effectively.
As we look back over a little more than the past year and a half, we've made tremendous strides working to improve our business to appeal to a customer who has rapidly evolved. We've delivered positive overall comps in every quarter dating back to the third quarter of fiscal 2025. We've strengthened our market share in key customer segments. We've improved operating income and EPS. Importantly, we've demonstrated that our company can perform in a volatile, event-driven consumer environment.
Genesco's Q1 results are a testament to the company's ability to execute its strategy effectively and drive meaningful value through operational execution. As we move forward into fiscal 2027, it will be exciting to see how these efforts continue to pay off and what new initiatives the company has in store for its customers.
