Genesco (GCO) Stock Forecast & Price Target

Genesco Inc. has raised its FY26 sales outlook, now projecting total sales growth of 3%-4%, an increase from a previous estimate of 1%-2%, which outpaces the Street’s forecast of 1.6%. Additionally, the company reports a significant 25% increase in comparable store sales driven by improved traffic, conversion, and transaction size, with Journeys achieving double-digit comps in recent quarters. This positive momentum is further reflected in the strong quarterly revenue results, as total revenues reached $546 million, exceeding expectations and driven by strong performance in the Journeys segment.

Genesco Inc. is facing significant headwinds, with expectations of gross margin (GM) contraction ranging from 50 to 70 basis points for the third quarter and anticipated declines of 50 to 60 basis points for FY26. The Schuh Group is particularly pressured by industry-wide challenges, including decreased foot traffic and promotional headwinds in the UK footwear market during the critical summer months. Additionally, weakening consumer spending trends attributed to macroeconomic factors and rising prices pose further risks to the company's financial outlook.