Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its FY26 sales outlook to a projected increase of 3%-4%, significantly up from its previous estimate of 1%-2%, along with comparable store sales (comps) forecasted to rise between 4%-5%. Additionally, management has reported a remarkable ~25% lift in comparable sales due to enhanced traffic, conversion rates, and transaction sizes, with the Journeys segment witnessing a notable increase in performance. Total revenues for the second quarter reached $546 million, exceeding expectations and reflecting a 4% year-over-year growth, bolstered by strong contributions from the Journeys brand and overall enterprise comps of 9% and 4%, respectively.

Genesco Inc. is facing significant challenges, as evidenced by its guidance for the second half of the fiscal year, which indicates a projected gross margin (GM) contraction of 50 to 70 basis points, substantially below previous expectations for flat year-over-year margins. Additionally, the company's outlook for fiscal year 2026 suggests a further decline in GMs of 50 to 60 basis points, an increase in projected declines from prior estimates of 20 to 30 basis points. Compounding these financial strains are industry-wide traffic and promotional challenges, particularly within the UK footwear sector, along with weakening consumer spending trends attributed to broader macroeconomic factors, which are heightening downside risks for Genesco's sales performance.