Genesco Q3 FY25 Sales Increase 2.9%, Gross Margin at 47.8%

Genesco Inc, the American specialty retailer, has reported a modest uptick in its net sales for the third quarter of fiscal year 2025 (Q3 FY25), with figures reflecting a 2.9 percent gain to reach $596.3 million. This growth comes in contrast to the $579.3 million recorded in the same period last year. The company’s gross margin currently holds at 47.8 percent, a slight dip from the 48.1 percent reported in the prior year.

Operating income for the quarter was noted at $10.2 million, yet the company faced higher tax-related expenses that culminated in a net loss of $18.9 million. The steep rise in income tax expense—jumping to $27.8 million from a mere $1.9 million year-over-year—was a significant factor in this loss. Earnings from continuing operations before income taxes remained stable at $8.9 million, representing 1.5 percent of net sales, consistent with the prior fiscal year.

E-commerce emerged as a bright spot for Genesco, with sales increasing by 15 percent year-over-year, now accounting for 24 percent of the retailer’s total sales. For the full fiscal year, the company anticipates a sales trajectory ranging from a decline of 1 percent to no change at all, projecting adjusted earnings per share (EPS) between $0.80 and $1.00.

In terms of financials over the nine-month period, Genesco’s total net sales reached $1.58 billion, showing a slight decrease from $1.59 billion in the same timeframe last fiscal year. The gross margin for this period also saw a marginal drop to 47.3 percent, reflecting $747.2 million in gross profit. Selling and administrative expenses remained essentially flat, at $777.9 million, compared to $778.5 million in the prior year.

Genesco reported a goodwill impairment of $28.5 million this fiscal year, while net interest expenses decreased to $3.4 million from $6.2 million. However, the overall picture painted by the company’s financials is one of challenge, with a net loss of $53.3 million reported, compared to a $44.0 million loss during the same period last year. The loss from continuing operations further mirrors this struggle, at $53.1 million versus $43.9 million previously.

Looking forward, the company’s forecast for the entirety of fiscal year 2025 suggests that total sales may decline by 1 percent or remain flat compared to fiscal 2024. Excluding the effects of the 53rd week from the previous fiscal year, the guidance is slightly more optimistic, hinting at flat or up to 1 percent growth. Adjusted diluted earnings per share from continuing operations are expected to be in the $0.80 to $1.00 range, up from previous projections of $0.60 to $1.00.

In the words of Genesco’s chair and CEO, Mimi E Vaughn, the latest quarter’s performance not only exceeded expectations but also marked a notable rebound in comparable sales, driven by renewed focus on enhancing the consumer experience at key segments of the business. The implication here for investors and stakeholders is clear: while hurdles exist, Genesco is strategically positioning itself for a path toward recovery and growth.