Genesco Inc. Goldman Sachs Global Consumer and Retail Conference

Good morning, and welcome to this next session of the Goldman Sachs Global Consumer and Retailing Conference. My name is Brooke Roach, and I cover the apparel, softlines, and brands sector here at GS, and I am thrilled to introduce this next session with Genesco. Here with me on stage today is Mimi Vaughn, Board Chair, President, and Chief Executive Officer, and Jonathan Collins, SVP Finance and Chief Financial Officer. Welcome, Mimi. Welcome, Jonathan. Hi, Brooke.

Thanks for having us this morning.

To kick it off, we will show a brief video.

Mimi, could you kick it off by telling us a little bit about where Genesco stands today in its footwear first strategy? What is the next leg of that strategy that investors should be focused on, and what milestones should we be watching for?

Well, you saw, for those of you who do not know us, we are all about footwear, and we have both footwear retail brands as well as footwear brands. What makes us distinctive is that we focus on very specific parts of the consumer market. We have come through a phase where we were building a lot of our digital capabilities. We doubled the size of our digital business. We laid some great tracks for analytic work. We did a lot with the inner connection between stores and online and really have repositioned the company quite a lot. We launched something called a footwear first strategy, which is all designed to be focused on where the consumer is today and how much they have really changed through the course of the pandemic. Habits changed, how consumers shopped changed, particularly within footwear.

Our footwear first strategy is all about dialing into the exact right product. If you do not have exactly what the consumer wants, if you do not have newness and freshness, they are passing you by because they are having to make choices. So we are very dialed into product overall. We are talking a lot about awareness and how do we raise awareness, because today the consumer finds out and discovers brands and thinks about brands in a very different way. We are thinking about experiences. You saw our fantastic store designs, and we are making the experiences in stores really an outstanding experience for the consumer as well as online. Of course, we are investing in our people and our capabilities because people are who allow you to unlock really wonderful things within retail.

I would say to talk about milestones for Journeys, which we will have a chance to talk about, we announced our eighth consecutive into our ninth consecutive quarter of positive comps in terms of the transformation and the reimagining of Journeys. It was interesting to hear the Gap because I think we are all on this journey of how do we really meet where the consumer is today. We are excited about that, so I think that is a great milestone for us. We have improved our bottom line by 100 basis points in each of the last couple of quarters, and so the impact of the initiatives that we are putting together are what we believe are really working. We have got tremendous momentum in our business, and it is a tough footwear environment, and it is a tough consumer environment in general in certain pockets, and we are really outperforming and excited about that.

That's great to hear. Jonathan, let's bring you into the conversation. You recently joined Genesco as CFO. What attracted you to the company, and what are your initial impressions of the opportunities ahead?

Yeah, I think as I talked to Mimi and the board during the interview process, the two things that really stand out to me were the words mission and opportunity, as you mentioned, Brooke. I'm a very mission-driven person. I spent 13 years at Walmart. They're very mission driven, and I think there's nothing like that feeling of putting on a really nice, well-fitting pair of Schuh to really uplift, and give people confidence. Then opportunity, and we'll talk, I'm sure, a lot more about each of our divisions, but, just what a massive opportunity, in terms of executing our footwear first strategy, as well as the talent we have. I'm super impressed with the whole leadership team and the board and, yeah, just excited to join the company at this time.

That's great. Before we dive into the execution of the strategy, let's level set with the consumer. A couple of questions that we're asking all companies at our conference today is one on the health of the consumer and the back half environment, which is, as you look at the second half of 2026 relative to your recent results, do you expect the environment to be the same, better, or worse? Then as you roll that forward into 2027, do you expect the health of the consumer to be better, the same, or worse in 2027 versus 2026?

Consumer has absolutely been hanging in there. They want what they want, and they buy what they want. So we have really been the beneficiaries of them buying what they want. I do think in the back half of the year that it will be more challenging, and because of oil prices, gas prices. Gas prices are a real thing. I think that there wasn't a person that I spoke to after Labor Day that didn't talk about gas prices and prices at the pump and filling up at the pump. So I think that's a real point of pain for the consumer, and I think that the fact that diesel is up so high just flows through into overall price inflation.

As we look into next year, I believe we were going to get to a better point next year, and the health of the consumer will continue. I think the consumer is in a good place from not having over-borrowed. They are paying down their credit card. We actually saw all stratas of our consumer sectors across demographic groups perform well over back to school. We are encouraged by what we see. We know we have got to be spot on on our assortments, and we plan to be.

You mentioned back to school just now, so maybe we can dive a little bit deeper into that. Comps were a bit slower in Journeys in 2Q, but you noted an acceleration quarter date on your call a few weeks ago. Can you talk about the cadence of consumer demand this summer and what you have seen on traffic versus conversion? How has back to school trended as you have moved through some of the timing shifts?