What Happened?
Shares of footwear, apparel, and accessories retailer Genesco (NYSE: GCO) jumped 5.8% in the afternoon session after the company outlined its strategic growth plans and positive business trends at the Goldman Sachs 32nd Annual Global Retailing Conference.
During the presentation, Genesco highlighted the success of its Journeys business, which has achieved four consecutive quarters of positive comparable sales with a recent run rate of approximately 10%. Despite facing a $20 million impact from tariffs, the company expressed optimism, forecasting full-year growth of 3% to 4%. Management is also focused on improving profitability, setting a target for a 6% operating margin by leveraging operational efficiencies and investing in brand awareness to enhance the customer experience.
The shares closed the day at $33.67, up 6.6% from previous close.
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What Is The Market Telling Us
Genesco’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3% on the news that analysts raised their price targets on the stock following its second-quarter earnings report. This positive sentiment from Wall Street comes a day after the footwear retailer announced its financial results. Truist Securities increased its price target to $31 from $25, and Jefferies raised its target to $29 from $24, though both firms maintained a Hold rating on the shares. In its second-quarter report, Genesco exceeded expectations, posting a 4% increase in net sales and raising its full-year sales forecast. The company highlighted its fourth consecutive quarter of positive comparable sales growth, driven by a 9% increase at its Journeys brand. Despite the sales beat, the stock initially fell on Thursday as the company maintained its earnings guidance, citing pressures from tariffs and a promotional market in the UK.
Genesco is down 19.5% since the beginning of the year, and at $33.68 per share, it is trading 23.4% below its 52-week high of $43.99 from December 2024. Investors who bought $1,000 worth of Genesco’s shares 5 years ago would now be looking at an investment worth $1,568.
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