The following is a summary of the Genesco Inc. (GCO) Q4 2024 Earnings Call Transcript:
Financial Performance:
Genesco reported Q4 revenue of $739 million, a 2% rise mainly driven by all divisions except Journeys. However, without the additional 53rd week, overall sales saw a 2% dip.
Despite the operating challenges in fiscal 2024, the overall sales decreased only by low single digits while the gross margin was compressed by 30 basis points.
The company's Q4 earnings per share fell short of the recent guidance owing to softer sales and heightened expenses.
Genesco's digital business grew at 5% in Q4 and 8% for the full year, increasing digital penetration to 23% from 20% last year.
The firm produced approximately $108 million in free cash flow, indicating a robust balance sheet and substantial financial power to support the future strategic plans.
Genesco anticipates significant pressure in the first half of fiscal 2025.
Business Progress:
Genesco launched Journeys All Access loyalty program and Buy Online, Pick Up in Store initiative in North America, both of which have shown positive early results.
A sizeable reduction in underperforming Journeys stores was achieved, with nearly 100 closures and further 50 being evaluated for closure in the current fiscal year.
Progress is being made in expansion of the assortment for Schuh and J&M plans for fiscal 2025 while continuing with strategies to improve productivity and profitability.
With a new leadership and focused turnaround program, the company is implementing new initiatives to enhance Journeys' product offering and customer experience.
The company aims for growth in sales by injecting newness into product selections across online and physical stores, hinting a brighter prospect for growth and profitability, especially for Schuh operations.
Genesco is targeting an annualized run rate reduction before reinvesting of $45 million to $50 million by the end of fiscal '25, surpassing the original target of $40 million.
More details: Genesco IR
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