Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its FY26 sales outlook, projecting total sales growth of 3%-4%, significantly higher than the previous estimate of 1%-2%, with comparable store sales (comps) anticipated to rise between 4%-5%. Early results from stores indicate a remarkable 25% increase in comps, driven by improvements in traffic, conversion rates, and transaction sizes, particularly for the Journeys Group, which performed well with a 9% comp growth. Additionally, the company achieved total revenues of $546 million in 2Q, surpassing analyst expectations and reflecting a year-over-year growth of approximately 4%, further enhancing the positive sentiment around Genesco's financial performance.

Genesco Inc. is facing significant headwinds, with projected gross margin (GM) contraction of 50 to 70 basis points for the third quarter, which is considerably below previous forecasts of flat year-over-year GMs. The company anticipates a further decline in FY26 GMs of 50 to 60 basis points, revising prior expectations that indicated a less severe decrease. Additionally, the Schuh Group is experiencing substantial pressures due to decreased foot traffic and promotional challenges in the UK market, compounded by overall weakening consumer spending trends linked to broader macroeconomic factors.