The operating income of the company stood at $10.2 million, representing 1.7 per cent of net sales, compared to $10.9 million, or 1.9 per cent, in the prior fiscal. The company incurred a net interest expense of $1.2 million, down from $2.2 million in Q3 FY24. Earnings from continuing operations before income taxes were $8.9 million, consistent at 1.5 per cent of net sales in both fiscals. Selling and administrative expenses were $274.9 million, accounting for 46.1 per cent of net sales, marginally better than 46.2 per cent in Q3 FY24.
Genesco Inc’s net sales rose 2.9 per cent to $596.3 million in Q3 FY25, with a gross margin of 47.8 per cent.
Operating income was $10.2 million, but higher tax expenses led to a net loss of $18.9 million.
E-commerce sales grew 15 per cent YoY, representing 24 per cent of retail sales.
For FY25, sales are expected to range from a 1 per cent decline to flat, with adjusted EPS of $0.80–$1.00.
The income tax expense in Q3 FY25 surged to $27.8 million, or 4.7 per cent of net sales, from $1.9 million, or 0.3 per cent, in Q3 FY24. This led to a loss from continuing operations of $18.8 million (-3.2 per cent of net sales), compared to earnings of $6.6 million (1.1 per cent of net sales) in the same period last fiscal. The net loss for the quarter was $18.9 million, or a loss of $1.76 per basic and diluted share, compared to net earnings of $6.5 million, or $0.60 per share, in Q3 FY24.
The comparable e-commerce sales in Q3 increased 15 per cent year-over-year (YoY), and comparable store sales went up 4 per cent YoY. E-commerce sales represented 24 per cent of retail sales compared to 21 per cent last fiscal. GAAP earnings per share (EPS) was ($1.76) and non-GAAP EPS was $0.611.
“Our quarterly performance once again exceeded expectations and marked a return to positive overall comparable sales. Following a strong start to the third quarter including the heart of back-to-school, sales trends at Journeys remained robust in September and October, fuelling a double-digit comp gain for the business. This result was driven by the initial phase of Journeys’ strategic growth plan which has focused on elevating the consumer experience including improving the product assortment and visually resetting our stores. EPS would have been stronger without the shift of an important back-to-school week into the second quarter this year,” said Mimi E Vaughn, Genesco’s board chair, president and chief executive officer (CEO).
Nine-month (9M) financials
Net sales totalled $1.58 billion; a slight decrease compared to $1.59 billion during the same period in FY24. The gross margin declined marginally to 47.3 per cent, representing $747.2 million, down from 47.7 per cent or $756.8 million in FY24. Selling and administrative expenses remained consistent, standing at $777.9 million in FY25, nearly unchanged from $778.5 million in FY24. The company reported a goodwill impairment of $28.5 million in FY25, with no such expense in this fiscal. Asset impairments and other costs increased slightly to $1.5 million, up from $0.6 million in FY24. This resulted in an operating loss of $32.2 million in FY25, an improvement from the $50.8 million loss recorded in the prior fiscal.
Net interest expense decreased to $3.4 million in FY25 from $6.2 million in FY24. Income tax expense significantly increased to $17.1 million in 9M period, compared to a tax benefit of $13.5 million in FY24. The company reported a net loss of $53.3 million in FY25, compared to a $44.0 million net loss in the same period last fiscal. The loss from continuing operations was $53.1 million in this fiscal, compared to $43.9 million in FY24. Loss from discontinued operations was $0.2 million, slightly higher than the $0.1 million recorded in FY24. Basic and diluted loss per share were both $4.90 in FY25, compared to $3.88 in FY24.
Outlook
For full fiscal 2025, Genesco expects total sales to be down 1 per cent to flat compared to fiscal 2024, or flat to up 1 per cent excluding the 53rd week in fiscal 2024 versus prior expectations for a total sales decrease of 1-2 per cent, or flat to down 1 per cent excluding the 53rd week in FY24. It also expects adjusted diluted earnings per share from continuing operations in the range of $0.80 to $1.00 versus prior guidance of $0.60 to $1.002.
Fibre2Fashion News Desk (SG)
