Shares of Genesco plummeted almost 32.5 percent Thursday following an earnings report showing sales were down 7 percent for the quarter and that the company will close about 100 Journeys stores.
Benzinga reports the Q1 sales of $483 million for the Nashville fashion retailer were the result of decreased Journeys store sales, decreased wholesale numbers and foreign exchange pressure.
Relatedly, the company’s comparable stores sales figure was down 8 percent in Q1.
Genesco will close the approximately 100 Journeys stores in fiscal year 2024, after having previously expected to cease operations at 60 stores. The company anticipates about $40 million in cost reductions, versus $20 million to $25 million previously, with $20 million realized in fiscal 2024 by the closures.
For fiscal 2024, Genesco is providing guidance that notes sales are to fall 4 percent to 5 percent — or down 5 percent to 6 percent compared to the sales figure of fiscal 2023. The company expects adjusted earnings per share of $2.00 to $2.50, almost half the prior-guidance EPS of $5.10 to $5.90.
“Following a positive end to the holiday season, the first quarter proved considerably more challenging than we anticipated,” Mimi Vaughn, Genesco board chair, president and chief executive officer, said in a company release. “Consumer demand at Journeys dropped off significantly early in the quarter and did not improve as we changed seasons in the latter part of March and into April, offsetting another quarter of record sales at Schuh and Johnston & Murphy.
“Given the ongoing uncertainty around near-term consumer behavior, we are taking a much more conservative view and revising our outlook for the remainder of Fiscal 2024,” Vaughn added.
Genesco shares (Ticker: GCO) started the week trading at $30.18 and ended Thursday at $20.11. The shares were up 1.98 percent in after-hours trading. They began the year trading at $44.91.