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GCO NYSE· Genesco Inc
Earnings report Q4 2023

Johnston & Murphy Group Reports Increase in Revenue for Fiscal 2024

Segments of Revenue

  • Net sales for Johnston & Murphy Group increased to $100.99 million for the first nine months of Fiscal 2024, compared to $123.54 million in the same period of Fiscal 2023. This represents a decrease of 18.3%.

Strengths

  • The increase in operating income for Johnston & Murphy Group can be attributed to several factors. Firstly, there was an increase in net sales, which contributed to the overall revenue growth. Additionally, there was an improvement in gross margin as a percentage of net sales, primarily due to a decrease in air freight costs. This was partially offset by increased warehouse costs, retail markdowns, and increased inventory reserves.
  • Selling and administrative expenses decreased as a percentage of net sales, reflecting greater expense leverage resulting from revenue growth. This was particularly evident in occupancy expense and performance-based compensation. However, there was an increase in marketing and compensation expenses.

Challenges

  • Genesco Brands Group experienced a decrease in net sales for the third quarter of Fiscal 2024, with revenue declining to $30.4 million from $38.7 million in the same period of Fiscal 2023. This decrease was primarily due to a deliberate strategy to reduce value channel sales.
  • The operating loss for Genesco Brands Group improved to $1.6 million in the third quarter of Fiscal 2024, compared to $1.9 million in the same period of Fiscal 2023. However, the company still faced a loss, indicating ongoing challenges in this segment.

Noteworthy

  • Genesco Brands Group reported increased gross margin as a percentage of net sales, reflecting supply chain efficiencies and price increases. This contributed to the improvement in operating loss for the third quarter of Fiscal 2024.
  • Selling and administrative expenses increased as a percentage of net sales for Genesco Brands Group in the third quarter of Fiscal 2024, primarily due to the deleverage of expenses resulting from decreased revenue. However, there were decreases in royalty, marketing, and other expenses.

Summary

Johnston & Murphy Group showed overall positive performance with an increase in net sales for the first nine months of Fiscal 2024. The company benefited from increased revenue, improved gross margin, and decreased selling and administrative expenses as a percentage of net sales. However, Genesco Brands Group faced challenges with a decrease in net sales and an operating loss in the third quarter of Fiscal 2024. The deliberate strategy to reduce value channel sales impacted revenue, although there was an improvement in gross margin. The company needs to address these challenges to ensure sustained growth and profitability.

Source documents

Form 10-Q  filed on Dec 07, 2023
98 pages scanned

Reference data

Company financials Q4 revenue 579M
Analyst estimates Q4 EPS missed by -31.74%
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