Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its fiscal year 2026 sales outlook, now projecting total sales growth of 3%-4% and comparable store sales growth of 4%-5%, reflecting a significant increase from previous forecasts. The company reported a notable 25% comp lift in certain stores, driven by improvements in customer traffic, conversion rates, and transaction sizes, further indicating robust demand. Additionally, the strong performance of the Journeys Group, which has been buoyed by a 9% increase in comparable sales, contributed to total revenues of $546 million, surpassing expectations and affirming a positive financial trajectory.

Genesco's stock outlook is negatively affected by projections indicating a contraction in gross margins (GMs) for the second half of the fiscal year, with guidance suggesting a decline of 50 to 70 basis points, significantly worse than prior expectations of flat GMs year over year. The company has also revised its full-year forecast, now anticipating GMs to decrease by 50 to 60 basis points, compared to the earlier prediction of a decline of 20 to 30 basis points. Additionally, the Schuh Group has experienced notable pressure from industry-wide traffic and promotional challenges in the UK market, with declining consumer spending further compounding these difficulties amid macroeconomic uncertainties.