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%, demonstrating a significant upward revision from previous forecasts. The company has reported a notable 25% lift in comparable store sales, driven by improved customer traffic, conversion rates, and transaction sizes, particularly in its Journeys segment, which continues to outperform expectations. Additionally, Genesco's total second-quarter revenue of $546 million exceeded market expectations, highlighting a robust year-over-year growth of approximately 4%, bolstered by strong performance across its diverse brand portfolio.

Genesco's financial outlook is negatively impacted by significant gross margin (GM) contractions, with third-quarter guidance projecting a decline of 50 to 70 basis points, which is notably below previous expectations of flat GMs year-over-year. Additionally, the company has revised its fiscal year 2026 GM forecast down to a contraction of 50 to 60 basis points, indicating worsening profitability prospects compared to earlier projections. Compounding these challenges, the Schuh Group faces industry-wide traffic and promotional issues in the UK, alongside broader macroeconomic headwinds leading to weakening consumer spending trends.