Genesco (GCO) AI Stock Analysis

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Genesco

(NYSE:GCO)

45Neutral

Genesco's overall stock score reflects significant financial and valuation challenges, mitigated slightly by positive signals from the recent earnings call. The company's weak technical indicators and valuation further weigh down the score, suggesting potential risks for investors unless strategic improvements materialize.

Genesco (GCO) vs. S&P 500 (SPY)

Market Cap

$219.00M

Dividend YieldN/A

Average Volume (3M)371.00K

Price to Earnings (P/E)―

Beta (1Y)1.95

Revenue Growth0.02%

EPS Growth-31.11%

CountryUS

Employees5,400

SectorConsumer Cyclical

Sector Strength58

IndustryApparel - Retail

Share Statistics

EPS (TTM)3.26

Shares Outstanding11,038,311

10 Day Avg. Volume232,341

30 Day Avg. Volume370,996

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap4.17

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit0.83

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$40.00

Price Target Upside85.19% Upside

Rating ConsensusHold

Number of Analyst Covering0

Genesco Business Overview & Revenue Model

Company DescriptionGenesco Inc. operates as a retailer and wholesaler of footwear, apparel, and accessories. The company operates through four segments: Journeys Group, Schuh Group, Johnston & Murphy Group, and Licensed Brands. The Journeys Group segment offers footwear and accessories through the Journeys, Journeys Kidz, and Little Burgundy retail chains, as well as through e-commerce and catalogs for young men, women, and children. The Schuh Group segment operates Schuh retail footwear stores that offer casual and athletic footwear, as well as sells footwear through e-commerce. The Johnston & Murphy Group segment is involved in the retail and e-commerce operations; and wholesale distribution of men's dress and casual footwear, apparel, and accessories, as well as women's footwear and accessories. The Licensed Brands segment markets footwear under the Levi's, Dockers, and G.H. Bass brands for men, women, and children, as well as designs and manufactures the STARTER and ETONIC brands footwear. As of January 29, 2022, the company operated approximately 1,425 retail stores in the United States, Puerto Rico, Canada, the United Kingdom, and the Republic of Ireland primarily under the Journeys, Journeys Kidz, Schuh, Little Burgundy, and Johnston & Murphy names. Its e-commerce websites include journeys.com, journeyskidz.com, journeys.ca, schuh.co.uk, schuh.ie, schuh.eu, johnstonmurphy.com, littleburgundyshoes.com, johnstonmurphy.ca, nashvilleshoewarehouse.com, and dockersshoes.com. Genesco Inc. was incorporated in 1924 and is headquartered in Nashville, Tennessee.

How the Company Makes MoneyGenesco Inc. generates revenue through a multi-faceted business model that includes retail sales, wholesale distribution, and licensing. The primary source of income is retail sales from its chain of specialty stores, such as Journeys and Schuh, which sell footwear and accessories directly to consumers. Wholesale distribution contributes to revenue by supplying footwear to external retailers and department stores. Additionally, Johnston & Murphy, as a premium brand, offers both retail and wholesale channels, enhancing the company's revenue streams. Key factors contributing to Genesco's earnings include strategic store locations, brand recognition, and customer loyalty programs. Partnerships with popular footwear brands and effective supply chain management also play essential roles in sustaining revenue growth.

Genesco Financial Statement Overview

Summary

Genesco's financial performance shows significant challenges, with declining revenues and profitability as indicated by the negative net profit margin and declining EBIT and EBITDA margins. The balance sheet reflects a moderate position with a concerning decrease in stockholders' equity and total assets. Cash flow issues are highlighted by negative operating cash flow and declining free cash flow, indicating cash management struggles.

Income Statement

―

Genesco's income statement reflects challenges in maintaining revenue and profitability. The gross profit margin remained stable at approximately 47% over the years, showing efficiency in managing cost of goods sold. However, the net profit margin turned negative in recent years, indicating operational struggles and costs outweighing revenues. EBIT and EBITDA margins have also decreased, reflecting declining operational efficiency. Moreover, the revenue growth rate is negative, indicating a downward trajectory in sales.

Balance Sheet

The balance sheet shows a moderate financial position with a debt-to-equity ratio of approximately 0.89, indicating a balanced approach to leverage. However, stockholders' equity has decreased over time, reflecting potential erosion of value. The equity ratio is around 41%, suggesting a stable capital structure, but the reduction in total assets and equity is concerning.

Cash Flow

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Genesco's cash flow statement highlights significant challenges. The operating cash flow has been volatile, turning negative recently, and free cash flow has seen substantial declines, indicating cash management issues. The operating cash flow to net income ratio showcases inconsistency in converting income into cash, and the free cash flow to net income ratio is poor, reflecting inadequate cash generation relative to profits.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
2.33B	2.32B	2.38B	2.42B	1.79B
	Gross Profit
1.10B	1.10B	1.14B	1.18B	804.47M
	EBIT
13.93M	-13.46M	51.03M	104.41M	42.13M
	EBITDA
66.72M	35.84M	136.66M	190.36M	-59.66M
	Net Income Common Stockholders
-18.89M	-16.83M	71.92M	114.85M	-56.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
34.01M	35.16M	47.99M	320.52M	215.09M
	Total Assets
1.34B	1.33B	1.46B	1.56B	1.59B
	Total Debt
485.09M	522.94M	580.43M	632.64M	734.04M
	Net Debt
451.08M	487.79M	532.44M	312.12M	518.95M
	Total Liabilities
788.57M	758.69M	849.46M	959.63M	1.02B
	Stockholders Equity
546.97M	571.20M	606.97M	602.47M	566.76M
Cash Flow		Free Cash Flow
46.75M	34.49M	-224.82M	185.97M	133.61M
	Operating Cash Flow
87.89M	94.80M	-164.88M	239.87M	157.74M
	Investing Cash Flow
-41.13M	-60.00M	-59.93M	-33.90M	-24.02M
	Financing Cash Flow
-47.00M	-47.58M	-45.53M	-101.17M	-3.16M

Genesco Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price21.60

Price Trends

50DMA

22.16

Negative

100DMA

31.61

Negative

200DMA

30.51

Negative

Market Momentum

MACD

-0.47

Negative

RSI

55.65

Neutral

STOCH

66.69

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GCO, the sentiment is Neutral. The current price of 21.6 is above the 20-day moving average (MA) of 19.49, below the 50-day MA of 22.16, and below the 200-day MA of 30.51, indicating a neutral trend. The MACD of -0.47 indicates Negative momentum. The RSI at 55.65 is Neutral, neither overbought nor oversold. The STOCH value of 66.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GCO.

Genesco Risk Analysis

Genesco disclosed 35 risk factors in its most recent earnings report. Genesco reported the most risks in the “Ability to Sell” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Genesco Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JILL	65 Neutral	$233.07M	5.80	55.23%	1.89%	1.02%	4.66%
Sector *	61 Neutral	$6.59B	11.77	3.06%	3.98%	2.56%	-20.85%
CTRN	59 Neutral	$189.89M	―	-31.87%	―	0.69%	-254.98%
DBI	55 Neutral	$142.46M	―	-3.31%	6.83%	-2.14%	-173.54%
ZUMZ	49 Neutral	$228.16M	―	-0.50%	―	1.57%	98.64%
GCO	45 Neutral	$219.00M	―	-3.49%	―	0.02%	-31.11%
PLCE	40 Underperform	$127.15M	―	-521.67%	―	-13.49%	63.10%

* Consumer Cyclical Sector Average

Performance Comparison

GCO

Genesco

21.60

-4.89

-18.46%

CTRN

Citi Trends

23.42

0.23

0.99%

DBI

Designer Brands

3.29

-6.02

-64.66%

PLCE

Children's Place

6.23

-4.76

-43.31%

ZUMZ

Zumiez

12.31

-5.71

-31.69%

JILL

JJill

15.82

-11.90

-42.93%

Genesco Earnings Call Summary

Earnings Call Date:Mar 07, 2025

(Q4-2025)

% Change Since: -33.33%|

Next Earnings Date:May 22, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted a strong performance in the fourth quarter, driven by the success of the Journeys segment and significant digital growth. However, challenges remain in the Schuh and Johnston and Murphy businesses, along with expected gross margin pressures in the upcoming fiscal year.

Q4-2025 Updates

Positive Updates

Strong Performance in Fourth Quarter

The company delivered revenue and gross margins that exceeded expectations, with operating profit at the high end of the forecast. Comparable sales increased 10%, with stores up mid-single digits and digital up high teens.

Journeys Segment Success

Journeys' performance outpaced the overall market, with comparable sales accelerating to double digits for the second consecutive quarter. The turnaround was aided by strategic growth initiatives, leading to increased allocations and successful full-price selling.

Digital Business Growth

The digital business grew by double digits, expanding penetration to 25% and effectively doubling in size over the last five years to over half a billion dollars.

Loyalty Program Expansion

Membership in loyalty programs grew, reaching over 10 million members, enhancing data analytics and CRM capabilities.

Store Optimization

64 Journeys store closures were executed to align with shopping patterns, improving productivity and profitability.

Negative Updates

Challenges in Schuh Business

Schuh faced a very challenging and highly promotional declining UK market, leading to flat top-line performance and decreased profitability due to store deleverage and promotional pressures.

Johnston and Murphy Headwinds

Johnston and Murphy faced headwinds with a slowdown in the market for men's non-athletic premium footwear, affecting sales and profitability despite strong product introductions.

Genesco Brands Group Sales Decline

Efforts to simplify the license portfolio led to lower sales in the short term but more profit, impacting both Q4 and full-year results.

Gross Margin Pressure Expected

For fiscal 2026, a gross margin decline of 20 to 30 basis points is expected due to product and channel mix shifts, and the exit of certain licenses.

Company Guidance

During the Genesco Fourth Quarter Fiscal 2025 Conference Call, the company reported several key metrics reflecting robust performance and strategic growth initiatives. The fourth quarter saw revenue increase to $746 million, up approximately 1% despite one less week of sales and a reduced number of stores. Comparable sales grew by 10%, with store sales up 6% and digital sales soaring by 18%. The company achieved an adjusted EPS of $3.26, a $0.67 improvement from last year, despite the impact of the retail calendar's 53rd week. Gross margins expanded by 60 basis points, driven by strong full-price selling and fewer markdowns. For fiscal 2025, comparable sales returned to positive territory, rising 3%, with total sales at the high end of guidance despite more store closures than planned. Digital business grew by double digits, expanding its penetration to 25% and significantly growing membership in loyalty programs to over 10 million members. Looking ahead, Genesco anticipates a 2% to 4% increase in overall comp sales for fiscal 2026, despite a $30 million impact from store closures and a $14 million effect from a weaker pound sterling, with a focus on accelerating Journeys' growth through store remodels and strategic investments.

Genesco Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Genesco Updates Employment Protection Agreements for Executives

Neutral

Feb 7, 2025

On February 6, 2025, Genesco Inc.’s Compensation Committee approved amendments to its Employment Protection Agreement. The changes allow Termination Notices during active negotiations for transactions that could lead to a Change in Control and remove automatic termination upon reaching a certain retirement age, impacting executive employment stability during potential company transitions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.