Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its fiscal year 2026 sales outlook to a growth projection of 3%-4%, an increase from the previous 1%-2%, which surpasses Wall Street's expectations of 1.6%. The company has reported a significant 25% lift in comparable store sales driven by improved traffic, conversion rates, and transaction sizes, reflecting positive early results across its store formats. Additionally, strong performance in the Journeys Group, with a notable 9% increase in comps, contributed to total revenues of $546 million for the second quarter, exceeding the anticipated $532 million.

Genesco Inc. is facing significant headwinds, with guidance indicating a contraction in gross margins for the second half of the fiscal year, expected to decline by 50 to 70 basis points, which is notably lower than previous forecasts. The Schuh Group is particularly affected by widespread traffic challenges and promotional pressures in the UK footwear market, leading to substantial declines in shopper visits during the early summer months. Furthermore, a broader trend of weakening consumer spending, exacerbated by macroeconomic conditions and rising prices, poses additional risks to the company's revenue and margin outlook moving forward.