Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its fiscal year 2026 sales outlook, now projecting total sales growth of 3-4%, significantly higher than the previous estimate of 1-2%, while also anticipating comparable store sales growth of 4-5%, up from 2-3%. The company has reported approximately a 25% increase in comparable store sales driven by improved customer traffic, conversion rates, and transaction sizes, indicating positive momentum in store performance. Additionally, the strong results from the Journeys segment contributed to total revenue of $546 million in the second quarter, which exceeded market expectations and reflected a 4% year-over-year growth.

Genesco Inc. faces significant headwinds, with guidance indicating a contraction in gross margins (GM) of 50 to 70 basis points in the third quarter, diverging from prior expectations of flat margins year-over-year. The company has revised its full-year FY26 GM forecasts downward, projecting a decline of 50 to 60 basis points compared to the earlier expectation of a 20 to 30 basis point decrease, reflecting ongoing pressure on profit margins. Additionally, the Schuh Group segment is struggling with diminished consumer foot traffic in the UK, highlighting the broader challenges posed by weakening consumer spending trends amid macroeconomic uncertainties and rising prices.