Genesco's Q4 2025: Contradictions in Strategic Growth, Digital Expansion, and Promotional Challenges

These are the key contradictions discussed in Genesco's latest 2025 Q4 earnings call, specifically including: Journey's strategic growth plan, digital growth strategy, and Schuh's promotional environment management:



Journeys' Strategic Growth and Performance:
- Journeys reported a significant improvement in comparable sales, increasing double digits in both Q3 and Q4, marking the second consecutive quarter of acceleration.
- The growth was driven by the injection of newness and excitement in the product assortment, strong vendor relationships, and effective marketing strategies.

Digital Sales and Customer Engagement:
- Genesco's digital business grew by double digits, increasing its digital penetration to 25%, effectively doubling the size of this profitable channel over the last 5 years to over $0.5 billion.
- The growth was fueled by increased membership in loyalty programs, leveraging buy-online-pick-up-in-store offerings, and enhancing the interaction between stores and online.

Profitability and Cost Management:
- The company achieved its target run rate of annualized cost savings through realigning its cost base and closing 64 underperforming Journeys stores, aligning the footprint with current consumer shopping patterns.
- These actions helped improve operating profit by 24% and adjusted EPS to $3.26, compared to $2.59 in the previous year, despite an extra week in the previous year's fourth quarter.

Challenges in the U.K. Footwear Market:
- Schuh faced a relatively flat top line in fiscal '25 due to a highly promotional and declining U.K. footwear market, despite maintaining the #1 market share position.
- Digital sales remained resilient, accelerating high single digits to over 40% of the business, but lower store sales and gross margin pressures impacted profitability.