Genesco (GCO) 31 Aug 232024 Q2 Earnings call transcript

Good day, everyone, and welcome to Genesco's Second Quarter Fiscal 2024 Conference Call.

Just a reminder, today's call is being recorded.

I will now turn the call over to Darryl MacQuarrie, Senior Director of FP&A. Please go ahead, sir.

Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal '24 results. expect date, forward-looking be but call expectations reflecting different. the of as actual on to statements make our Participants results could company's the or some Genesco release the made factors most this today. to cause of in XX-K SEC differences the could the statements from recent filings refers our reflected filings, XX-Q morning's and that including expectations you and earnings forward-looking

their during GAAP to schedules refer website in and are to the measures call. Results Earnings expect financial measures release, All the also in to Participants reconciled available attachments adjusted to counterparts the press company's this financial non-GAAP certain Quarterly section. on morning's the the in

summarizing Officer; have Chief Board Mimi as results Vaughn, here me and Financial President Officer. today We presentation well. Chief and Tom is posted Chair, also George, Executive our on a With the call

call turn Mimi. like the I'd over Now to to

Thanks, Darryl, joining for and us. you good everyone. Thank morning,

footwear performance, the yesterday, years. a XX second year. exceptional take Journeys Group footwear retailer I'd six with President merchant today. as of Mario Journeys year the instrumental the last leadership our leading Genesco, to career for discuss in fiscal of announcement has the the been news teen fashion I other retirement end most Mario recently Gallione's of expertise and an building the has His into it is quarter Before at like extraordinary plan address we had to moment released

with successor. already and know senior incredible a recent passion to company. for experienced to working miss Mike I Journeys With as in We him we our transition have his place leadership, we Officer, Chief people Mario's Operating promotion a his will determine strong to thank smooth Sypert’s ensure team along Journey's for contributions Journeys all for and our extensive and Mario

our Now results. to moving

July sustaining results to expectations Although, volume up with divisions, summer the business season began. relative June our QX, and as in, Paired second pressuring enabled and picking to our persisted our of during in modestly deliver kicked year. us progressed ahead headwinds trends the lower Journeys into back-to-school the time of quarter as this sales other improved the this reset

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effectively response we the consumer in brand and to more comfortable, the needs changing to pandemic, a the repositioned swiftly living world. meet At casual its J&M, in more of

businesses, consumer we both customer Journeys. and strategic I its am of multiple on outperformance plan. Schuh, execute creation confident proposition Those we for we product we're efforts to its and similarly acting yielded and now marketing. achieve at with urgency success value evolved our and access as growth the improved same While value quarters and elevate have and will evolve

buy are and Journeys to remains athletic what a continues spending, positive of suppressed item a assortment inject judicious consumers' footwear to product wanted we or primarily when need of moving these products. inflation, strong, more Meanwhile, share and for a consumer to for wallet demand with other newness our the conserve for quickly purchase. Journeys and and goods. On remains appetite to compete in-demand discounting, choices by note, partners our squeezed brand opting making The in pronounced competitive shopping most on there's to

the of led last below rationalize We've successfully hard the savings. approximately made On need XXX plans year's promote. worked million inventory and we on identify our of inventories end and other to actions and drove pressure immediate the eliminating mitigate by stores We've quarter, on good cost close last we're levels second Journeys aggressively discussed to $XX Journeys call, the to to the annual taking progress profits. at

We total shareholders, also outstanding XX% returned capital year. to a of quarter repurchasing fiscal this the X% shares of during for

us complacent. when While measures to growth. recover, improvement sales meaningfully position environment the top we its consumer action will know to are we We accelerate further drive and and well these take Journeys' need not line

strategy our We deepening QX, The XX% pillars including several and foundation emphasize growing ago. consumer plan strategic advanced innovation our initiatives digital investment overall year a to and by insights, penetration digital continued reshaping Journeys XX%, is expanding our driving versus in XX% omnichannel, business cost of strategic base. that digital footwear-focused product in our comparable its and

initiatives We plan a are Journeys beyond elevate also effectively going building on already and several in accelerating with to this place. performance well foundation

in Before for quarter on consecutive I'll those driven comparison. brand comp and a highlights solid its channel, QX achieved touch gains, Starting plans by and J&M in plus & growth to the quarter strong transaction I of speak XX%, led higher and at J&M conversion record Schuh. Murphy, by with average a multiyear its store both against detail, delivered recent Johnston tough double-digit fifth size. the sales

have Sales business. stronger challenging if even for not a wholesale been growth would

the As been the when many their refilling with books environment grappling low versus the order are has exercising and given across with uncertainty case caution retailers were last industry, the their pipelines. inventory of year

and with for sales. The strong assortment. resonate see affluent Overall, than more total XX% apparel base. brand continues athletic this XX% of casual more year-over-year, and direct-to-consumer of customer results, XX% really almost The DTC casual footwear growth in to drove to J&M's up continues representing categories accessories, the assortment accounting than more

the effort we've before, strong As driving results. to and is sustainable business J&M's fundamentally shift discussed

now and J&M awareness, to that significant brand multi-category to a exists a increase footwear as to brand. remains reposition some J&M's the done opportunity lifestyle is it work relative changed brand, a perception low broad With which the there dress primarily competitors

to about are story investing market We growth excited this unlock committed to multiyear and untapped potential the ahead.

and summer outstanding solid prices. an business increased season sales. Offering marked in athletic by drove sales boosted quarter casual a compelling kicked sandal with by robust weather sales growth and cost warm the Schuh. average had aided higher selling acceleration to assortment, and Schuh Moving as XX% The now both sequential

Schuh delivered is well by almost the margin with across operating highest full sell-through. and digital of led sales, striving traffic for acceleration solid was up digital XX% we're all operating stores record price and web watermark the as last broad-based At store digital as to businesses, our business Strength income year. over achieve. high Schuh's the of

of Schuh's quarter, for several met season have as with is fashion last used current the business quarters the over in off to been start a bundled footwear a led and momentum the to the The response. growing testament strength market business is at promotions Looking marketing destination positive and kids by consumer. good back-to-school Schuh's the targeted recognition this notable as

forward. team performance. rank in June, capture to to in to enabled economic products moving the and positioned and the up out-execute brands competitors market focus year, the the three access and pressure. May gains Kantar, well share for to continued share spots top to and footwear according a and U.K. moved for despite on initiatives relentless has through ongoing business this share Better to Compared customer XX and number engagement exemplary believe Schuh Congratulations loyalty market business marketing we Schuh is last

to initiatives like discuss fully I'd more our at Journeys. Now

the sales fashion is cementing near-term the dominant traffic, term. delivering strategy us improvement, intact. by has drive It Let not multipronged from as longer it over me elevate separates and plan The start profitability customers driven player the Journeys but our to a competitors. saying is teen value success to only further positioning of goal footwear with also as stronger Journeys' in proposition

number to include: target strengthening challenging We of in our market has elements knowledge customer consumer shape of team which and on with on teen key plan insights dive expanding how the first build better post- the expansive times engagement and understand future relationships deep actions. is changed launched and behavior one, purchase is it The to and a to intent priority. customer, key our our pandemic

back-to-school, As efforts loyalty lead part to Journeys Access the fully All engagement launched program. our we of up and

up frequently, to them program Journeys in the million on, are promising consolidate repeat since stores achieve to While inducing with their the loyalty a interact more driving launch branded aiming full to higher two ago. it's reads early customers with tiers. X members initial We're approaching purchases signed purchases, with very months

rewards data coming first-party QX, customer expand further in access will forward, of more analytics personalized all we're through in leveraging sign-ups, we some to our even other loyalty specific targeted and to marketing. Moving in partners. With brand investments more our top

differentiation brands and Number expanding adding to styles. the testing and brand relationships, two, and for new of the more Journeys assortment, increasing exclusives number and elevating product strengthening including

leveraging customers' our aggressively the meet Here, appetite to we're with to assortment the partnerships more product, for Journeys product brands. we're reposition fully the newness. But beyond working

of and events other and Collaborating through both key to Journeys brands to media, vendors. the the brand stories social tell activations strengthen our

some and take several time, will allow highly year. already top-to-top partners meetings process, allocated the greater access in assortment part the to assortment impact the us secured we by with that in-demand had styles back to the of repositioning this our While brand

an activities awareness marketing. have with us engaged, with opportunity greater Journeys launched sharpening unites commerce. have they Thredup, build with with our three, insight We're quarter Journeys, efforts these purpose that partnership we past Journeys we this to brand drive our when heightening Number target The our messaging told as consumer. brand but our work experience a customers (ph) great to

social to delivering and efforts are in search the back boost in returns. paid paid addition, spend both we're positive which increasing half, In of traffic

Number omnichannel digital to four, growth. initiatives implementing incremental and drive

that significantly These the business like in are building include initiatives successful at opportunity digital double-digit and Schuh have digital our on to program. advertising loyalty the growth. grow to business new the driven Journeys' have and e-commerce done We leveraging we've increases

over We additional and Store, imminent in be BOPUS in providing pickup Online out consumers just leverages an in are holidays. with time of before fleet the for rolled launch holiday. beginning will Up especially next the September This Pick few our phased option the for Buy store in while excited convenient months

efficiency, shopping our response five, habits of closing e-commerce optimizing and and while in mall footprint changing our are locations the Journeys driving off-mall driving teen stores, underperforming productivity to piloting Number and consumer.

improving to customers maximize with recapture. them to and closing to store overall a market. Our is analytics, store, a online revenue of Through better sales to nearby grow and or objective our we're communicate to data when Journeys direct customer able share and

little a sales we It's very that fixed note transfer a to performing income. important breakeven eliminate weaker closing store, the need to achieve by operating cost given we

optimize Our hour yield and selling we as per recently completed studies more higher efficiencies focus peak and work effective excess driving tactics times. stronger notably on to eliminate positive conversion ultimately volume will store productivity time results selling

and efforts. hardware in-store mobile and this improvement including facilitating towards deploy new technology Our other devices, we software, further point-of-sale as these is

to achieve have Journeys' address as demonstrated want to again, our ability our and I in I we challenges have just underscore, other Importantly, with the conviction success businesses.

dedication of plan fashion unparalleled unique strategic evolve our continue and creativity leading prospects. as footwear its teens the talent, for as the Journeys destination updated our and this great keeping for priorities. look strongly I in of team, brand the and relationships, its With to refine we I you forward its to positioning and future progress believe on strength

outlook. our to moving Now

see While improvement. to we shop an QX, stay for a closer acceleration were sales a cautious prudent much with the to into visibility to it's August, have little Journeys believe or economic we reason in shopping in further of having in to improved and consumers encouraged trend some Thus pickup need. far lack back-to-school in given demand consumer

we're major balance the for of change year. not the though, for planning in a trend Overall,

into the see assortment and during I through especially expect As we inject these the more with however, half efforts, said, from to impact goods back to the freshness have, QX in quickly holidays. some demand moved and

the the I all which would to dedication, call employees Tom, like thank with for our and these. to difference proud Before inspired resilience, I your group to people. efforts navigating work such times an challenging makes of tremendous like pass I'm

the and to Our in consumer. strategic and businesses positions strong are differentiated means something

have track confident and managing adverse through of a well we record that will We succeed. once again, I'm cycles,

it And to with over that, I'll Tom. hand

Thanks, Mimi.

to consumer the ahead came footwear-focused only While We environment navigate results can solid confident the place the expectations second remain continue foundation over a also current in not our quarter in was strong that our profitability that were current of challenging, have climate. to encouraged time. drive and strategy we but in

was currency $XXX X% Turning and to our compared constant revenue down results to last X% a quarter. for Consolidated down million, basis. on year the

driven Journeys relative result to and primarily stronger expectations Schuh. by the With

And our to the of channel sales improved saw digits as While came store year-over-year a growth, traffic it spending, when July consumer decline back-to-school the with increasing remained QX. business double Journeys particular in acceleration and strength magnitude approached. versus in discerning digital nice

But negative comp comps Schuh increased Journeys' comps down XX%. XX%, XX%. for down were direct were comps were offset by Schuh Our and store gains Journeys. total J&M By double-digit down were and as total were at total up strong total comps and comps X% the increased XX%, business J&M while comps X% channel, total

points margin Overall last as gross was up XX to basis compared year.

was margin than Journeys' the gross other our was all more less declined, Although than and in businesses. decrease offset improvements anticipated by

compared are was initiatives incremental As in other margin businesses pleased gross primarily gross to improvement we year, driven expand to last the our clear as our product markdowns continue gain to Journeys to Overall, current the our environment. in with margin traction. by

and XX up By gross Ireland-based as product was mix division XXX an duties margin points points reduce business, higher Schuh's was better more and and benefited offset result margin basis assortment adding distribution tailwinds basis an and of the from J&M's center. was points airfreight elevated than up as markdowns Journeys XXX as gross basis gross down mix margin product a closeouts.

Group's expectations took supply from up basis in benefited stronger the our operating XXX and and shift. quarter, efficiencies Brands the chain points, Genesco surpassed margin product division a a gross price hold Finally, mix increases and

the basis over points Moving last was year. expense Adjusted of an sales, P&L. increase XX.X% SG&A XXX of down

time expenses Given particularly that we lower lower it minimum salaries. levels to difficult drive of to any at pertains year, it sales, at is selling volume to them as are this response in of

experiencing are addition, hourly In we pressures. wage

valuable our efficiencies into converting yielded studies is take beginning only to While hold. time store have selling insights, them

selling a higher-than-expected result, incurred As we salaries.

are in as recorded growing. divisions our addition, initiatives expenses expenses increased In drive as that we our higher to technology well

comp deleverage have not However, approximately steep been last of as not had incentive reversed $X we million expense would year. the

deleveraged on were a comparison, also expenses last the incentive Excluding basis XXX the When year. comparison, relatively Operating dollar incentive expenses comp points. for basis Journeys to adjusting flat comp

progress. of company average to a with years. continue the of QX, capture on a remains a and we we the Low-borrowing This to in XX% next our renewals fleet fixed In priority, to XX and up channel couple renewals XX. term lease rent and the years, we expense good XX% amount coming reduction cost our lot overall approximately occupancy store additional expense reducing straight-line of of achieved across key have make year-to-date of three an opportunity over renewal savings. brings for the With in

adjusted all loss of QX last income and for $X.XX of for the $XX of adjusted quarter, in to better-than-expected reduced million we year. $X.XX adjusted summary, quarter, the million In compared compared loss share second the to per to an earnings contributed $XX EPS. diluted incurred in per a a count for operating This resulted which operating share last of Increased decline expense also interest year. share

the borrowing quarter capital position. planned to the sheet. now ended allocation net as We Turning of in a balance

year than adjust are better invest be and in assortment. achieving newest XX% Journeys year's in We with down inventories the able X% were year, levels. respect pleased to to need we to to we last to the inventories well were last lower quarter With goal below ended our trends receipts the controlled, last and specifically, positioned

grew the last J&M businesses. compared support higher to of demand inventories their and in to year levels Schuh

inventory brand We manage continue adjust to X,XXX outlets in half and end of year. with off-mall product investments stores. stores. were to million which primarily to stores, Capital and total quarter partners will expenditures work and directed our new the levels in the omnichannel our and We assortments $XX with and XX opened QX were the to our XX our digital primarily initiatives to closed with back

outstanding million, our repurchased on X% authorization. we X $XX quarter leaving shares of million or $XX current the for shares total Finally, during million

structure, up 'XX, $XX holistically to cost fiscal 'XX. in annualized an in continue which review $XX of run and anticipate savings we of in to our We million be million rate achieving will cost approximately continue to realized fiscal

leverage our also meaningful sales designed maximize actions shifting sensitivity a in be income and operating and operating shore swings EPS are decreasing revenue economic to structure fixed during to turbulence. growth our more cost These are rebound. provide times We variable, of to up to with thereby lift cost

addition SG&A of of digitally sales expense those closed from $XX largely Regarding as stores in These store This a the XXX the operating targeted effect to mainly in nearby the we've on of we rate which fleet. income. to total portion P&L, 'XX. or to you net will via is or run XX to neutral million annualized think roughly our the about And roughly small need positive savings. recapture to benefit $XX eliminates Journeys Journeys the end closures, fiscal million close Mimi of QX have a X% mentioned, to from lost cost impact only To the store we locations. cost savings help mall-based were stores

to turning guidance. Now

Although uncertain. expected, we the QX initially were results consumer better than environment remains

retain year. believe not significant view current change balance we such, to and sales trends in 'XX fiscal prudent through our a As it's the assume cautious for the of

continue while And the to continued we well, channel. in continue and consumer. are in Journeys some performing We wholesale pressure to expect the QX Schuh we J&M seeing challenging expect

expense cost anticipate QX side, we some in even escalating in back of continue experienced the with to initiatives, the half, particularly pressures our in On we reduction cost the QX.

share the we addition, of this $X of QX marketing leading QX some outlook for QX. full to offsetting and earnings be with and year the factors near to $X.XX per us expense our to In earnings range. into realized These share expectations shifted of maintain midpoint for are we earnings in adjusted better-than-expected per out

excluding primarily This were total our QX the actual down X% and sales but now guidance to to versus sales to X% Schuh. For in results prior full also X%, our week. the an expect reflects improvement year, decrease X% we improvement factors XXrd

sales to share. per small week XXrd negative a effect add approximately and third the million expect earnings have to of continue on We $XX

year. on to sales the by business last total year-end color compared Some

a For Journeys, now high decline. single-digit expect we

the expect in double-digit we reflecting strong range. low trends Schuh, growth in the business. the now For

in For decline back a a QX J&M, for growth slight Genesco we Brands to half continue rate. double-digit in growth in growth And modest with QX. expect low the offset

expect gross our gross margin improvement for to results our by to QX Journeys as prior to being now into 'XX be points. the and our compared margins XX to basis flows We guidance points fourth in driven to down quarter down view rates The fiscal year assortment. actual in is some basis newness the flat change in XX XX more be

increased as SG&A basis our deleverage points We is a points XXX now deleverage. XXX expectation of prior compared This sales to to XXX percentage of basis basis points adjusted to expect points to largely pressure, XXX basis of wages fiscal by expected cost to expenses decline driven year 'XX half savings back cost and closures Journeys to Despite this as other measures store and pressures. hold. of take in are the

no repurchases, the we in tax of and results assumes outstanding XX.X be million, guidance rate shares which additional to XX%. Our average 'XX expect approximately share fiscal

line. I'd around Starting color like now to top with some provide the QX.

incremental sales margins, to inventories. margin low Journeys quarter. expect We second and markdowns down basis XX digits the to a ensure as QX similar against well extremely to higher clean year's With QX or basis we XX lower as J&M in decrease of points as inventory product points, markdowns be to an single expect overall gross due given lean respect to shift built percentage a have we gross at mix last margins

deleverage XXX expenses roughly points salaries SG&A additional overall basis XXX of on Regarding inflation, and pressure in QX. with to cost basis we other selling points expect

tax and once turns. better leaner and we deliver count creating XX continue greater nimble even share rate is expect position consumer the that million. QX, a capitalize for summary, a to ourselves headwinds, expense, organization shareholder and a we weather current $X million tide of more In interest value equipped the approximately XX% simultaneously to while Finally, to of

to open call the we questions. ready now Operator, for are

with question Instructions] Our is from Seaport Global Kummetz you. Securities. Thank [Operator Mitch Please proceed. first

Maybe ask mid-single in and taking the I improvement business, I'll mean, Yeah. of and that. Journeys that's we the guess my Thanks question. to release I queue. for sequential and there you you on can few Can -- jump August like both I just press -- Is now then through or get maybe I I have referenced did into are the go guess by any several the into call today. you that? back way kind quantify mean, continued you down like August. on

quarter. our Journeys in but August. to up of improvement the summer very for got into I you In we you we quarter, reflective the the in slow your see much when was down was thank the And running last comp quarter up really May, off to really, Mitch, start. first being X%. fly we around remind in they that And I'll until question. single what second were that digits, were July overall improvement And pretty that just May saw as to pick XX%. business. in see and the down down seeing we pleased we call, really on for Journeys the up, carried The And through XX%. in to didn't comp first picked June, a the was high comps And into down picked in June said

movement that XX% we've from seen down down to down X%. XX so to And

you then in it I calls, clogs. away call, towards an I you're I update of last athletic. talked talked us a from like terms from last Can about last you And what in the the more think kind call, you've of And standpoint, about casual talked Okay. of shift couple give seeing strength product you just there? know think, about, sounds

more much terms of There's that what fashion the we athletic. customers toward our more teen Mitch, call call sandals, the complement casual a day-to-day versus I huge more It's been of purchases a But And pandemic what out But and always gravitated on versus customers, were product. of fashion our coming boots, general, casual more in basis. athletic side fashion saw around, by in the their of driven shoes our to described what some athletic. bouncing in has we fashion what closet. swung they is what we teen

go like are if what before liking trading in to and a buying. ups of teams we're lot seeing winter, more structured. downs, customers slipper product that strength still side but what is the shorter boots back described saw bit is And our little down a you tall in casual of within into from boots terms we the I've And are

clogs different are clog we that of So There well. a style. as that's representing seeing. brands are I've about number are trend the talked that And a nice

reads getting interestingly. We in product quite appetite And are it's fall more is are that some States. there we It's the still many on the early actually and in still United interest hot but for of -- product more seeing parts some fall.

And so and I talked responding think in newness, been appetite want the behavior sidelines. picking general, more the -- what else. than our the and is they sitting what choosing is driving consumer buy, consumer anything about to purchase on they a has to but for They've which I been lot

into for have And product despite still and summer the more appetite so time. translate newness, winter seen fact appetite that for that it's we fall type

And is then on Schuh, obviously, trending that business well. very

of is referenced is kind you that the about there the Can a in out is little maybe better bit assortment curious stronger. of -- much anything The consumer the much competitive talked has is you How more? UK this changed share much market a I'm than gain more here. there. You parse landscape how guess of I that better? Maybe this assortment. some

the the of just has well lot lots a remarkably U.K. dynamics Yeah. pretty market. in lot against has within and the of behind was that measuring store closures. There business and retail of a that's performed of consumer There extreme in headwinds. like, market a are were we're of store There Schuh us, stabilized but change from closures largely in face the retail the the landscape. retail point

of consumer being a the environment overall terms the truly power away, competition outshining share. on competed just market terms in being And so and of of consumer of in against the high backdrop is inflation part Schuh taking spending

working is And the the of website offering that that the market marketing and is the so is service great stores, on well. abilities the amplified share assortments Schuh specific compelling and within the resonating the terrific to marketing consumer measurement really Schuh's the

that's the of of to our combination more it's up a a So And factors XX market. and well, overall. remarkable in working to that's of that's been pretty in better addition lots movement allocated access number move a and what's to product of three places overall

So of because go is strategies to well effectively executed. they've has share of team gaining how it a the how that created after market market and

Okay. And it more, then the in back get into one queue. and I'll

wholesale. mentioned challenges You some around the of

you think quarter. your for the quarter? referenced some what half. in have then J&M was you And changed also, weakness J&M outlook you for the the in back wholesale I Can in say the brands little can of then And you for it's more about in thinking color again terms just wholesale, you're the J&M how add whether maybe half? a bit or other for back

plus specifically, overall to the it was retail and business we growth X%. way out that you break one up e-commerce XX%, for think in didn't that is about sales that, way the Mitch, the J&M's to were it is The and can get because comps that's really stores and

partners of consumer is -- there. get overall industry wholesale conservative. about just the So very are talking being retail what think customers, the I that we're environment, the that a And what our can headwinds are you is many in with our and the wholesale seeing, measure given

now, to to and keep thing sell-through number even low, right them is when by channels. inventories in keep And the one when direct evidenced the through clean. product -- and it And our nicely is is as even great selling

think I in that of they able inventory make inventories keep And just a sure cautious. are and are being are coming that huge to they line. partners bulge of Our want to off

of pronouncements again, board, to across brands. be spite really And sell-throughs in within tended there's the sell-throughs, particular great so

the business and have that part back year. And guidance into so we have of overall the reflected of seen side that, on branded in our for the general, our

queue. Okay. Thanks. I’ll get the back in

Thank you.

Our Jefferies. proceed. Please question with is Tarlowe next from Corey

I Thanks. talk seen about at if you that Johnston Murphy. you've & the momentum wondering, Great. of could some was

fairly up You that strongly. comps mentioned were

what's if that be head division. would driving and expect to momentum it great into just you So double-click you the what could at

strategy we Corey, was very also into it's company one being great really thank with did, to styling, of within special excited in about to opportunities grow that the of during the with for you technical for that proprietary our team product for pandemic hit with business. our comfort. exciting into but J&M. branded question. our systems. We're great harder pivot much and growth hard most what our What side And much and did the prospects features very It's with aligned chassis casual

it's lot It's technology, moisture features, been product. wicking a the and we've smart investing waterproofing in

have And trading comfortable our into really actually that's overall technology, products. might been so in casual product because In and achieve able to footwear. for average have prior product. we selling on shift down prices similar built much mean great it's features, for a we're filled it's pricing times, casual. casual more But pretty a It's with we focused a

the tremendous And in of into done addition and a the the features team to categories proliferating that, and accessories. apparel job these technical quite building has

apparel And They overall XX% sales. now comprise of our I overall and accessory talked so about direct-to-consumer our being sales up XX%.

they're is right They're just And so in seeing is closets now, when doesn't an parable likes you put it's seeing. what buy our the good in customer and put you to it so general, shoes, that really they the that looking. It so -- comfortable. have fantastic opportunity doesn't on product their on

we've into blazers, into been expansion well And opportunities categories, other really further season. so there's this doing for expansion

And We into business have is now right the awareness. to we as well. a brand expanded opportunity boys think build

what seeing. Our they're customers like

to we what do. awareness, and to our of opportunities further intending more have we're said has recent drive research that that's Some

even Thanks. inventory. the seems you you associated very secondly, And you've some helpful. year? impact more expect place maybe on And your margin. rest industry maybe than Could talk It inventories there. this how like be progress made nice like a the really trend about throughout That's the inventories better in broadly. to Great. of on seems It just maybe then

a at for So sense get to curious that just journey. you're where on

the balance vendors. team and closely at works the inventory right very mitigate can Making have sure we merchandising work and time the This right the Tom. product what month really (ph). vendors to The its and Corey. vendors been Journeys Yeah, question. is key We're with Good strong to pleased with our able inventories. do all continues those we Group appropriate balance, so key with relationships those we've have with

terms X% the X% inventory going for quarter. of at the So you was trends down to forward, second the of end saw overall

continue We fourth quarter and quarter. for to third on that expect to the even improve the

quarter specifically, it similar quarter. of end results second the and the quarter, third expect Journeys at was the in the saw and down And kind of fourth we you XX%,

So vis-a-vis in And margins inventory the I year I'm that. we're pleased with how the more ago. forward, with on their of to really bit of in more fourth of going bullish terms think result that. position product year well of we that's feel that much margin little with a as a Journeys impacts end relevant Because current selling a an -- going quarter

to So well. done inventory. the to really and margins going will in good what inventories we've the as with processes got watch continued which -- driving business help with continue is place and We've help forward

Yeah.

about. been that Tom this that. As managing us have do able done into a great about to of good it We, said, our fact, I've talking job of so gives the been But merchants is newness have inventory. in what's chase to lots flexibility

And flexibility business. drive be be we bring got to to we've need able the so that able product to ultimate in to

much so you for Thank the all color of luck. Great. best and

you. Thank

follow-up we proceed. with Please And some Seaport Global. Mitch have Kummetz now question from

I handful, you. I've hope Thank another you'll so me. got indulge Yeah.

the low to high for like improved the It it's year. looks guide On from Journeys down doubles down singles.

sort I trajectory kind that high XQ of Is like half back kind down walk of that through are QX? mean, year. the So implied of what's on? business the sort of that think for in of mid-singles at the can looking down singles you you you is in

that generally But to keep it's prudent believe extrapolating current be to the let me and we taken weigh have the in. approach is Let trend, that Mitch. able specifically, just about that we talk Tom

current So pickup little a trend. in bit there's the been of

the And incorporating big major pickup we're trend. so we're We're decline But overall economic expecting year, not anticipating that in that into part consumer the not the thinking. just our that market. be a improvement going the to extrapolating out back of in or any there's we're

resonating we'll access of have are is that's what we doing confidence our that the sell product we And that by driven that with It in is talking is a about our driving I to good overall consumer. gaining that are though product products keep What building degree through. this we pickup. newness is and

it I'll so to over turn the that And more that's give to taken. approach we've color. And Tom general any you

same had the ago as we expectations months In quarter. the we're really Yeah, three third for Mitch. third quarter,

year, Sort pretty fourth prior but both prior essentially line And newness, quarter, in much nothing in fourth the some the expectations Maybe on significance the as double-digits. the expectations of the high-single and relative improvement quarter really third to relative with low well. of to improvement quarter. down digits in pretty similar a in slight based

reconcile your then with And earlier, clarify Mimi, that and you Good. to something remarks. prepared said just

you think in Was you case? July a better than I Journeys said Journeys. than was that And X%? better comp that was in minus July X%. August your minus that I August Is prepared the thought remarks said

Yeah.

think was quarter. third in into was my referencing quarter I I the second remarks, prepared Mitch from the what pickup the

improvement down And of so going it which, the into course, the improvement XX% was into second had quarter, really in overall sequential from August.

through In you confidence Okay. remarks, we some around on a And then go challenges seen improvement you of anticipating the you you in the that Have year? any mentioned overhang. newness. balance drag your the there? that also inventory Journeys of are the talked have prepared as athletic less the of the you from Or about

that the quarters overhang think have this point within that then overhang athletic And within still anticipating by of this We year. through really product from the is we other we the the back-to-school. And goalposts we're and of like, that back is and what initially, for are shifted several be industry, been end selling. it was I overhang and up the everybody what And competitors seeing the are talking cleared hearing the part the not will at year. out the the would until about linger out out the in certainly there, marketplace,

And move existing of And still that that's the are the And end today. but still are can we being overall it's by markdowns hopefully industry incorporated of that we anticipating some past this, within really year, significantly. our the thinking. taken pretty

degree markdown on really that pretty affecting for product out we're factor But of that seeing suppressing deals business. because the of it not what that not attractive. very a selling demand within. doing there good the athletic That's some are is is product is specific is You're that our

Tom, then you're the bunch have on And Okay. a at you stores, of Do I closing a a know stores. just last Journeys store couple one. of count for year-end? Journeys

I do.

one of kind for you, separate got Tom. a I've

quarters? $XX walk that that started Can it or see that quarter? us maybe it phasing of already in through just half realized the second of play kind Have cost On sounds me. quarter? kind year. of some for we that by to savings, of in like $XX this next being out is And first of couple the the the you that's And the million does million how of over

to the of projected store Journeys first the year. X,XXX the The count answer is question. So end at

Okay. you. Thank

on -- the savings. then Yes. And cost

In still about terms still the -- confident of that the we're perspective. Mitch, will the be in still what doing of but fourth still fourth feel cost will be quarter. There savings, confident the driven most is quarter, it from of costs in some some, And in we're third quarter. most

initiatives lot as year prior In relative we of selling -- and to are addition relative in fewer we're talked a have losing salaries, we lot the hours in to a place about, we -- selling salaries. -- to did

of At -- those in that. some continue but work still some on is getting salary we're we'll what we the continue to to we selling the of yield same traction reducing salaries still expected, savings. terms also not time, originally We

branded in have there. expenses terms our outside reduce to We've what double still initiatives down on well selling we'll continue of also the can salaries our initiatives occupancy place some as we or got in do some cost going in of group We good forward. to

outside will Pretty good spend that. And And of look we've continue year cost for line savings we we'll also sight next next for also as and on work have categories then what well. some some as to on year procurement visibility initiatives that well. have in place relative to additional similar

line achieve confidence to of question. original on that good again There's sight the good fourth more of quarter. that it we'll that, in So the

thing year, expenses in as well. another think quarter out or absorbed Journey's point a the quarter in that of this just XXrd week fourth to I the expenses fourth

year the next adjust you seeing and you that for adjust impact year, OpEx here you for full of start a have when with store a the closings opportunity we really So in business margin there. of relative and of about the for reset we've the start to thinking a the growth cost perspective base a from expectations modest sales you other the parts for sort and success seen

we Even And next into the we've divisions. our on back going a comp XX% with the with bought modest last done months, what share. year. other XX over forward expectations improvement modest So Journeys

a of share year. see, lot per leverage can next you As earnings

This to closing to comments. does it like would conclude back the question-and-answer session. hand for I management

to for you joining We forward look next today. Thank to call. you us on talking quarterly our

conclude today's Thank you. This will conference.

your You lines this for time your disconnect at and may thank you participation.