Genesco trims 25 stores to sharpen margins and raise earnings outlook
Footwear retailer Genesco Inc. closed 25 underperforming locations in Q2 FY2027, cutting its store count by 5% as it seeks higher profitability.
Genesco Inc., the parent of Journeys, Johnston & Murphy and the U.K. retailer Schuh, announced the closure of 25 stores during its second quarter of fiscal 2027, representing a 5% reduction in its retail footprint. The closures were led by Journeys (17 stores), followed by Schuh (six) and Johnston & Murphy (two), offset by three new openings, bringing the total store count to 1,186. Quarterly net sales slipped 3% to $530 million, a decline Genesco attributes to intentional cutbacks in promotions and licensing changes.
The leaner store base and disciplined pricing lifted adjusted gross margins by 140 basis points to 47.2%, while Journeys saw a 2% rise in comparable sales and Johnston & Murphy a 4% increase. The company also reduced total debt from $71 million to $15.8 million and expects efficiency initiatives, including remodeling, automation and AI, to save $40-$50 million through fiscal 2029. Strong back-to-school demand prompted an upward revision of its full-year adjusted earnings guidance to the top of the $2-$2.40 per share range.
Why it matters
The store closures signal Genesco's shift toward a leaner, higher-margin business model amid slowing sales.
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