Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its fiscal year 2026 sales outlook to a projected increase of 3%-4%, a significant revision from the previous forecast of 1%-2%, which is also above the market expectation of 1.6%. The company reported impressive early results, highlighting a roughly 25% comparable store sales lift due to enhanced traffic, conversion rates, and transaction sizes. Additionally, Journeys, the leading segment, demonstrated strong momentum with a nearly double-digit growth in comparable store sales, contributing to total revenues of $546 million, surpassing analysts' expectations and indicating robust year-over-year growth.

Genesco Inc. is experiencing significant pressure on its gross margins, with the company projecting a contraction of 50 to 70 basis points for the third quarter, a stark deviation from previous expectations of flat margins year-over-year. Furthermore, the guidance for fiscal year 2026 has been revised downward, with anticipated gross margin declines now expected to be between 50 to 60 basis points, compared to earlier forecasts of a more moderate decrease. Additionally, the Schuh segment is facing challenges due to industry-wide traffic and promotional headwinds in the UK, combined with broader concerns regarding weakening consumer spending trends driven by macroeconomic factors and rising prices.