Genesco’s Mixed Performance: Balancing Growth and Margin Pressures Leads to Hold Rating

In a report released today, Corey Tarlowe from Jefferies maintained a Hold rating on Genesco, with a price target of $26.00.

Corey Tarlowe’s rating is based on a combination of factors that reflect both positive and negative aspects of Genesco’s recent performance. On the positive side, the company has shown consistent growth, with the Journeys brand achieving its fifth consecutive quarter of positive comparable sales growth and significant operating margin expansion. Additionally, strategic investments in store remodels and marketing initiatives have resulted in increased sales and customer engagement, particularly through successful campaigns and partnerships.
However, there are challenges that have led to a more cautious outlook. Genesco is facing margin pressures, notably from the Schuh brand and tariff-related costs, which have impacted overall profitability. The liquidation of Levi’s products has also created temporary margin headwinds, although there is potential for improvement with the upcoming Wrangler transition. Furthermore, management has revised the fiscal year outlook downward, reflecting a more conservative growth expectation. These mixed factors contribute to the Hold rating as the company navigates these challenges while leveraging its strategic initiatives.

In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $37.00 price target.