Even after the company posted another solid quarter on Friday, Genesco’s leadership team knows there is still more work to be done.
On the company’s first quarter 2027 earnings call, Genesco president, chief executive officer, board chair and interim chief financial officer, Mimi Vaughn told analysts that “momentum is building” and that the strategic initiatives it has put in place are “translating into tangible results.”
At Journeys, the CEO noted that both athletic lifestyle and casual shoes achieved “healthy growth” in the quarter, with increased demand for sandals, boots, low profile and lifestyle running.
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“The strength of our multi-branded, multi-category elevated assortment drove stronger full-price selling and considerably higher average transaction size in the quarter,” Vaughn said. “We’re outpacing the broader footwear market and continue to see market share gains at Journeys, where we’re gaining traction as the destination for the style-led teen girl as a result of our ongoing transformation momentum.”
The CEO said that Journeys has seen increases in its female consumer base, which now accounts for “well over 50 percent of sales” at the teen retailer.
Journeys’ continued success helped Genesco deliver overall total company net sales of $487.03 million, a 3 percent increase from $473.97 million in the first quarter of fiscal 2026.
Here, FN breaks down four key takeaways from the rest Genesco’s earnings call on Friday.
More Details on “Footwear First” Strategy Emerge
Vaughn noted on the call that upcoming initiatives from Journeys as part of the company’s “Footwear First” strategy are “heavily focused” on back-to-school and include leaning into current product trends with continued growth across both athletic and casual [shoes], including lifestyle running, low profile and sandals from the diversified mix of existing and new brands that have been driving the business.
The CEO also noted that, for back-to-school, Journeys will launch its newest “Life On Loud” campaign featuring multiple celebrities and influencers, which will be backed by a “substantial increase” in media spend to build on brand awareness gains and achieve new customer growth.
The company is also doubling the Journeys 4.0 store count this year, adding a targeted 90 stores, up from a little more than 80, about two-thirds of which will be remodels and the balance relocations to larger footprints and a handful of new stores for even more growth.
Other Journeys’ initiatives involve working to improve discoverability, including new product feed enhancements within agentic search and trialing an online shopping agent to drive digital growth; and releasing the next iteration of the retailer’s All-Access loyalty program, which currently has close to 11 million members featuring a fresh look and better ways to connect with its most valuable customers.
Additional Cost Cutting
Along with its most recent financial numbers, Vaughn revealed a new cost reduction program, which is expected to generate cost savings of $40 million to $50 million between now and fiscal 2029.
This comes after a January announcement of a strategic transformation of Genesco’s information technology (IT) operations, advancing to a new business model designed to improve speed and scalability, accelerate AI-enabled innovation and automation, and more closely align technology capabilities with the company’s evolving business priorities.
“We have room to improve our profitability, and we’ve been working hard on strategic initiatives and working hard to grow the top line,” Vaughn said on Friday’s call. “But to accelerate this improvement, we think we need to do some extra things on the cost side.”
More specifically, the CEO noted that the company is “looking at areas like selling salaries and taking out hours [of store employees], and working differently in stores,” as one of the ways of reducing costs.
The company is also looking into robotics and automation within its distribution centers as well as optimization on marketing spend.
Peyton Manning Is Helping Johnston & Murphy Win
Vaughn explained on the call that the company’s Johnston & Murphy label has seen its brand awareness “continue to trend up” in the months since its tie-up with NFL Hall of Famer Peyton Manning was announced, especially among younger consumers with demand from new customers up double digits.
“There’s no question that Peyton has been really beneficial to us,” the CEO said.
With this in mind, Vaughn noted that the company is shifting additional dollars into brand building at Johnston & Murphy and will continue its partnership with Manning into the fall season with a new campaign.
What’s more, there are plans to expand brand distribution by opening up to 15 new Johnston & Murphy stores this year, or 10 percent of the fleet, not including store closures.
“There are so many good things working in Johnston & Murphy right now, and that acceleration to 7 percent [comp sales gain in Q1] was great,” Vaughn said. “And I think it is the real work that we’ve been doing over time that is paying off. But I’d say that what’s really important right now is to have the exact right product for consumers.”
Schuh’s Turnaround May Take Longer Than Expected
Genesco’s U.K.-based retail arm Schuh has been under turmoil in recent quarters due to a weaker consumer market and heavy discounting in the region. But with sharpened customer positioning, Vaughn said that the company sees the same opportunity to serve the style-led youth girl at Schuh that it saw at Journeys.
As such, the company will continue to prioritize more full-price selling and more controlled markdowns at the retailer.
“Our immediate priority continues to be actions in this reset year to ultimately improve profitability, including continuing to reduce reliance on discounting by removing additional calendar promotions and discount stacking to steer gross margin recovery,” Vaughn explained. “The largest opportunity is ahead of us in the coming quarters. The market in Q2 currently is athletically focused with price sensitivity and fewer trends than we’re seeing in the U.S. right now, so this will take some time.”
The CEO added that Schuh is building on its improved product access with brands like Nike, Adidas and Asics, while also optimizing the store footprint will also help. (Genesco has closed 12 Schuh stores over the last 14 months.)
“Eliminating unproductive locations and shifting volume to nearby stores to improve store channel economics and implementing cost reduction actions in areas like rent and selling salaries is key,” she said.