Q1 2025 Genesco Inc Earnings Call

Operator: Good day, everyone, and welcome to the Genesco First Quarter Fiscal 2025 Conference. Just a reminder, today's call is being recorded. I'll now turn the call over to Darryl MacQuarrie, Senior Director of FP&A. Please go ahead.

Good day, everyone and welcome to the Genesco first quarter fiscal 2025 conference call.

Just a reminder, today's call is being recorded I will now turn the call over to Darryl Macquarie Senior director of S. P. N. A please go ahead sir.

Darryl MacQuarrie: Good morning, everyone, and thank you for joining us to discuss our first quarter Fiscal 25 results. Participants on the call expect to make forward-looking statements reflecting our expectations as of today, but actual results could be different. Genesco refers you to this morning's earnings release and the company's SEC filings, including its most recent 10-K and 10-Q filings, for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today.

Good morning, everyone and thank you for joining us to discuss our first quarter fiscal 'twenty five results.

Speaker Change: Participants on the call expect to make forward looking statements, reflecting our expectations as of today, but actual results could be different.

<unk> refers you to this morning's earnings release, and the Companys SEC filings, including its most recent 10-K and 10-Q filings for some of the factors that could cause differences from the expectations reflected in the forward looking statements made today.

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

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

Darryl MacQuarrie: We have also posted a presentation summarizing our results here as well. With me on the call today is Mimi Vaughn, Board Chair, President, and Chief Executive Officer, and Tom George, Chief Financial Officer. Now, I'd like to turn the call over to Mimi. Thank you, Darryl. Good morning, everyone.

Speaker Change: We have also posted a presentation summarizing our results here as well.

Speaker Change: With me on the call today is Mimi Vaughn Board Chair, President and Chief Executive Officer.

Speaker Change: And Tom George Chief Financial Officer.

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

Mimi Eckel Vaughn: Thanks for joining us. While the year is unfolding largely as we expected, we were pleased to deliver first quarter top and bottom line results that were ahead of our most recent guidance. Sales at Journeys came in a bit ahead of expectations, paving the way for the more significant progress we're working with urgency to achieve for back to school and holiday. Clean inventories and the benefits of our cost reduction and store optimization efforts contributed to the beat as well.

Mimi Eckel Vaughn: Thank you Daryl and good morning, everyone. Thanks for joining us.

Mimi Eckel Vaughn: While the year is unfolding largely as we expected we were pleased to deliver first quarter top and bottom line results that were ahead of our most recent guidance.

Sales at journeys came in a bit ahead of expectations paving the way for the more significant progress we're working with urgency to achieve for back to school and holiday.

Clean inventories and the benefits of our cost reduction and store optimization efforts contributed to the beat as well.

Mimi Eckel Vaughn: Journey's results more than offset some pressure at Schuh and Johnston and Murphy, which were both up against robust multi-year comparisons and both affected by a delayed start to the spring selling season. Overall, the consumer environment remains choppy. Consumers continue to show a willingness to shop when there's a reason, like we saw at Easter, and to retreat when there's not. In addition, faced with ongoing inflationary pressure, they remain quite selective, shopping almost exclusively for key footwear items and brands.

Journeys results more than offset some pressure at schuh and Johnston <unk> Murphy, which were both up against robust multi year comparisons and both affected by a delayed start to the spring selling season.

Mimi Eckel Vaughn: Overall, the consumer environment remains choppy.

Mimi Eckel Vaughn: Consumers continue to show a willingness to shop. When there is a reason like we saw at Easter and retreat when Theres not.

Mimi Eckel Vaughn: In addition faced with ongoing inflationary pressure they remain quite selective shopping almost exclusively for key footwear items and brands when.

Mimi Eckel Vaughn: When the product is exactly what they want, they buy it, and when it's not, they move on. Since the pandemic, we've taken major actions to evolve in response to the substantial change in our consumer shopping behavior. We've also demonstrated a strong track record over time of successfully evolving our businesses, emerging even stronger when confronted with economic and consumer disruption. Two recent examples are we reimagined J&M's product assortment and branding in response to the shift to casual accelerated by the pandemic, and we sharpened our focus on the shoe consumer with elevated product and marketing to achieve market share gains and record sales. We're taking many of the same actions with Journeys, and I'm confident we will achieve the same success. Turning around Journey's business remains our number one priority.

Mimi Eckel Vaughn: When the product is exactly what they want they are buying and when its not theyre moving on.

Since the pandemic, we've taken major actions to evolve in response to the substantial change in our consumer shopping behavior.

Mimi Eckel Vaughn: We've also demonstrated a strong track record over time of successfully evolving our businesses and margin even stronger when confronted with economic and consumer disruption.

Mimi Eckel Vaughn: Two recent examples are we re imagine <unk> product assortment and branding in response to the shift to casual accelerated by the pandemic and we sharpened our focus on the shoe consumer with elevated product and marketing to achieve market share gains and record sales.

Mimi Eckel Vaughn: We're taking many of the same actions with journeys and I am confident we will achieve the same success.

Mimi Eckel Vaughn: Turning around journeys business remains our number one priority.

Mimi Eckel Vaughn: With new leadership in place since the beginning of the year, we're diligently executing on our new strategic plan and working to dramatically accelerate the pace of improvement. I'm very encouraged by the traction we're achieving and optimistic that the changes we're making to our assortment, along with other strategic initiatives around building our brand and elevating our consumer experience, will unlock the meaningful potential we know exists in the journeys business. With what we anticipated would be our most challenging quarter now behind us, I look forward to continuing to execute and building momentum through the balance of Fiscal 25 and into Fiscal 26.

Mimi Eckel Vaughn: With new leadership in place since the beginning of the year, we're diligently executing to our new strategic plan and working to dramatically accelerate the pace of improvement.

Mimi Eckel Vaughn: I'm very encouraged by the traction, we're achieving and optimistic that the changes, we're making to our assortment along with other strategic initiatives around building, our brand and elevating our consumer experience will unlock the meaningful potential we know exists in the journeys business.

Mimi Eckel Vaughn: With what we anticipated would be our most challenging quarter now behind us I look forward to continuing to execute and building momentum through the balance of fiscal 'twenty five and into fiscal 'twenty six.

Mimi Eckel Vaughn: Now for color on our individual businesses, starting with Journeys. We were pleased that sales, gross margin, and expenses all exceeded our expectations in Q1. After a slow start in February, we saw a nice improvement driven by the Easter holiday, the later timing of tax refunds, and the key items in our assortment that we were able to pull forward to maximize demand during this peak period. We continue to prudently manage Journey's inventory, which was down 20% from last year.

Mimi Eckel Vaughn: Now for color on our individual businesses, starting with journeys we.

Mimi Eckel Vaughn: We were pleased that sales gross margin and expenses all exceeded our expectations in Q1.

Mimi Eckel Vaughn: After a slow start in February we saw a nice improvement driven by the Easter holiday. The later timing of tax refunds and the key items in our assortment that we were able to pull forward to maximize the demand during this peak period.

Mimi Eckel Vaughn: We continue to prudently manage journeys inventory, which was down 20% to last year.

Mimi Eckel Vaughn: This enabled us to keep markdowns in check and deliver gross margins that were ahead of our expectations. The savings we captured from our ongoing cost program also helped Journeys achieve an operating income close to last year's level, despite lower sales.

Mimi Eckel Vaughn: This enabled us to keep markdowns in check and deliver gross margins that were ahead of our expectations.

Mimi Eckel Vaughn: The savings we captured from our ongoing cost program also helped journeys achieve an operating income close to last year's level, Despite lower sales.

Mimi Eckel Vaughn: Journey's digital business was also a highlight, posting double-digit growth. Consumers responded well to our recent initiatives and enhanced online assortment, improved digital marketing, loyalty perks for all Access members, and the opportunity to buy online and pick up in store. In Q4 last year, we experienced increased pressure on Journey's core product assortment, including boots and vulcanized products, with limited ability to adjust right away given footwear product lead times. We expected this dynamic to continue into the front half of this year despite facing easier comparisons. A diversified assortment across casual and fashion athletic categories that serves multiple wearing occasions is what's responding with the Journey customer right now, and we're responding to it.

Mimi Eckel Vaughn: Journeys digital business was also a highlight posting double digit growth.

Mimi Eckel Vaughn: Consumers responded well to our recent initiatives and enhanced online assortment improved digital marketing loyalty parks for all access members and the opportunity to buy online and pickup in store.

Mimi Eckel Vaughn: In Q4 of last year, we experienced increased pressure on journeys core product assortment, including boots, and vulcanize product with limited ability to adjust right away given.

Mimi Eckel Vaughn: Footwear product lead times, we expected this dynamic to continue into the front half of this year despite phase it facing easier compares.

Mimi Eckel Vaughn: A diversified assortment across casual and fashion athletic categories that serves multiple wearing occasions is what's resonating with the journeys customer right now and we're responding to it.

Mimi Eckel Vaughn: We're excited about the opportunity to deliver newness across a number of brands, which should also drive higher ASPs. This has not only helped our results in Q1, but also instills us with greater confidence for the product changes we've made for the second half, as we have secured significantly more allocation of product to drive our back-to-school and holiday business. No other retailer serves the teen customer, especially the teen girl, quite the way Journeys does with its unique proposition as the destination for teen fashion footwear across casual and athletic brands.

Mimi Eckel Vaughn: We're excited about the opportunity to deliver newness across a number of brands, which should also drive higher asps.

Mimi Eckel Vaughn: This not only helped our results in Q1, but also instills us with greater confidence for their product changes. We've made for the second half as we have secured significantly more allocation of product to drive our back to school and holiday business.

Mimi Eckel Vaughn: No other retailer serves the teen customer, especially the teen girl quite the same as journeys with its unique proposition as the destination for teen fashion footwear across casual and athletic brands.

Mimi Eckel Vaughn: With this strong strategic positioning, we have the backing of our consumers, who drove positive store traffic once again in Q1, and the incredible support of our brand partners as we work together to drive Journey's growth. Moving now to SHU.

Mimi Eckel Vaughn: With this strong strategic positioning we have the backing of our consumer who drove positive store traffic once again in Q1 and the incredible support of our brand partners as we work together to drive journeys growth.

Mimi Eckel Vaughn: Moving now to schuh.

Mimi Eckel Vaughn: In Q1, the business continued to contend with a tough UK macro environment made more difficult by robust stack compares and extremely unseasonable weather that delayed the start of spring selling. Similar to journeys in the U.S., the UK consumer has become more discriminating and key item focused in their purchases, putting pressure on the footwear category and frequency of purchases in the market overall during the quarter. That said, for shoe, very strong Easter selling helped to partially offset softer periods with the mixed shift away from vulcanized products driving a higher footwear average selling price.

Mimi Eckel Vaughn: In Q1, the business continued to contend with a tough U K macro environment made more difficult by robust stack compares and extremely unseasonable weather that delayed the start to spring selling.

Mimi Eckel Vaughn: Similar to journeys in the U S. The UK consumer has become more discriminating and key item focused in their purchases putting pressure on the footwear category and frequency of purchases in the market overall during the quarter.

Mimi Eckel Vaughn: That said for schuh very strong Easter selling helped to partially offset softer periods with the mix shift away from vulcanize product driving higher footwear average selling prices.

Mimi Eckel Vaughn: The same brands driving Journey's business are also responding at SHU. At roughly 40% of sales, SHU's advanced digital capabilities and highly penetrated e-com business remain a key channel for consumer engagement with relatively stronger performance during the quarter. Additionally, the kids' business continued to shine in Q1, with most of our key brands up year over year, driving strong sales growth of 9%. On a further positive note, SHU's comps have improved in the second quarter so far as more sunny weather has spurred sales of spring and summer merchandise.

Mimi Eckel Vaughn: The same brands driving journeys business are also resonating at schuh.

Mimi Eckel Vaughn: At roughly 40% of sales shoes advanced digital capabilities and highly penetrated E. Comm business remains a key channel for consumer engagement with relatively stronger performance during the quarter.

Mimi Eckel Vaughn: Additionally, the kids business continued to shine in Q1 with most of our key brands up year over year, driving strong sales growth of 9%.

Mimi Eckel Vaughn: On a further positive note shoes comps have improved in the second quarter to date as more sunny weather has spurred sales of spring and summer merchandise.

Mimi Eckel Vaughn: The marketplace remains difficult, but looking ahead, the team is focused on several initiatives to improve the trend and drive growth. Bolstered by the recent additions of new marketing and e-commerce heads to senior leadership, the team is building on the progress made to sharply differentiate its customer proposition selling fashion footwear to youth with a focus on the female consumer. These initiatives include gaining even stronger access to the best brands and hottest products, revamping SHU's creative approach to marketing, employing new digital tools to drive traffic to the website, and deploying more campaigns within the SHU Club Loyalty Program, which now represents 35% of total sales.

Mimi Eckel Vaughn: The marketplace remains difficult, but looking ahead. The team is focused on several initiatives to improve the trend and drive growth bolstered by the recent additions of new marketing and ecommerce heads to senior leadership. The team is building on the progress made to sharply differentiate shoes customer proposition selling fashion footwear to you.

Mimi Eckel Vaughn: <unk> with a focus on the female consumer.

Mimi Eckel Vaughn: These initiatives include gaining even stronger access to the best brands and hottest product.

Mimi Eckel Vaughn: Revamping shoes creative approach to marketing employing new digital tools to drive traffic to the website and deploying more campaigns within the shoe club loyalty program, which now represents 35% of total sales.

Mimi Eckel Vaughn: Turning to Johnston & Murphy, against strong multi-year comparisons and back-to-back record sales years, Q1 proved more challenging than anticipated. From a category perspective, apparel and accessories were a highlight, driven by strength in blazers and woven shirts.

Mimi Eckel Vaughn: Turning to Johnston <unk> Murphy against strong multi year compares in back to back record sales years Q1 proved more challenging than anticipated.

Mimi Eckel Vaughn: From a category perspective apparel and accessories were a highlight driven by strength in blazers and woven shirts.

Mimi Eckel Vaughn: Apparel and accessories represented nearly half of J&M's direct-to-consumer business, underscoring the great success the team has had building a true lifestyle brand. Store conversion increased in the quarter, showing high purchase intent and interest in the assortment, although traffic was the challenge, particularly in April, with a slower start to spring selling. However, in May, traffic and seasonal sales have since picked up. We remain extremely positive on J&M's growth outlook as the cornerstone of our branded business and have now begun to tell the story to consumers in a much bigger way.

Mimi Eckel Vaughn: Daryl and accessories represented nearly half of <unk> direct to consumer business underscoring the great success. The team has had.

Mimi Eckel Vaughn: Building a true lifestyle brand.

Mimi Eckel Vaughn: Store conversion increased in the quarter showing high purchase intent and interest in the assortment. Although traffic was a challenge, particularly in April with a slower start to spring selling.

Mimi Eckel Vaughn: However in may traffic and seasonal sales has since picked up.

Mimi Eckel Vaughn: We remain extremely positive on Gms growth outlook as the cornerstone of our branded business and have now begun to tell the story to consumers in a much bigger way.

Mimi Eckel Vaughn: Last month, J&M launched its much anticipated new marketing campaign, Not Your Dad's Shoe Company, which showcases the team's accomplishments repositioning the business into a more casual, modern lifestyle brand. The campaign is part of a strategic effort to celebrate J&M's rich heritage while reshaping how customers view the almost 175-year-old brand and building awareness with a broader and younger audience about its ongoing evolution. The ads are reaching consumers across broadcast TV, digital placements, J&M's own website, and social media channels, including TikTok, which is a new channel for J&M that's quickly garnered a very positive reaction.

Mimi Eckel Vaughn: Last month <unk> launched its much anticipated new marketing campaign, not your dad shoe company, which showcases the team's accomplishments repositioning the business into a more casual modern lifestyle brand.

Mimi Eckel Vaughn: The campaign is part of our strategic effort to celebrate <unk> rich heritage, while reshaping how customers view, the almost 175 year old brand and building awareness with a broader and younger audience on its ongoing evolution.

Mimi Eckel Vaughn: The ads are reaching consumers across broadcast television digital placements <unk> own website, and social media channels, including Tictoc, which is a new channel for Jane M. That's quickly garnered a very positive reaction.

Mimi Eckel Vaughn: While it's early days, the brand is already seeing a lift in organic search, and feedback overall has been strong. Rounding out the branding discussion, we've made good progress repositioning the Genesco Brands Group business. We've simplified our portfolio of licenses to emphasize key brands and channels. This means lower sales in the short term but more profit, which was evident in the results this quarter and should continue going forward. Now, moving back to Journeys.

Mimi Eckel Vaughn: While it's early days the brand is already seeing a lift in organic search and feedback overall has been strong.

Mimi Eckel Vaughn: Rounding out the branded discussion we've made good progress repositioning the genesco brands group business, we've simplified our portfolio of licenses to emphasize key brands and channels and this means lower sales in the short term, but more profit which was evident in the results this quarter and should be going forward.

Mimi Eckel Vaughn: Although product advantages won't be fully evident until the back half, Andy Gray, Journeys' new president, and the team have been hard at work to rapidly accelerate the pace of Journeys' improvement. Part of that process has been strengthening the leadership team. We have already brought in a new chief merchant, are in the process of bringing in a new chief marketing officer, and have established a new strategy and transformation role to oversee the creation and execution of our ongoing plan.

Mimi Eckel Vaughn: Now moving back to journeys, although product advantages wont be fully evident until the back half Andy Gray journeys, new president and the team have been hard at work to rapidly accelerate the pace of journeys improvement.

Mimi Eckel Vaughn: Part of that process has been strengthening the leadership team we have already brought in a new chief merchant are in the process of bringing in a new chief marketing officer and have established a new strategy and transformation role to oversee the creation and execution of our ongoing plan.

Mimi Eckel Vaughn: And as I said, I'm very pleased with the traction we're achieving in this plan that will impact the customer across product, brand, and experience. I'll take a moment to update you on the key initiatives, which are a mix of both strategic acceleration and disciplined expense management, which is making a difference as we build toward positive comp. Number one, drive product leadership and create marketplace differentiation.

Mimi Eckel Vaughn: And as I said I'm very pleased with the traction we're achieving in this plan that will impact the customer across product brand and experience.

Mimi Eckel Vaughn: I'll take a moment to update you on the key initiatives, which are a mix of both strategic acceleration and disciplined expense management, which is making a difference as we build toward positive comps.

Mimi Eckel Vaughn: Number one drive product leadership and create marketplace differentiation.

Mimi Eckel Vaughn: I've already talked about the most impactful progress our new Chief Merchant, Chris Santella, and his team have made to drive near-term improvement. They've quickly secured significantly more allocation of in-demand product to drive our back-to-school and holiday business, including leaning into both athletic and casual styles across a number of brands.

Mimi Eckel Vaughn: I've already talked about the most impactful progress our new chief merchant, Chris <unk> and his team have made to drive near term improvement.

Mimi Eckel Vaughn: They've quickly secured significantly more allocation of in demand product to drive our back to school and holiday business.

Mimi Eckel Vaughn: This includes leaning into both athletic and casual styles across a number of brands.

Mimi Eckel Vaughn: As part of these efforts, they completed an extensive round of top-to-top meetings with our key vendor partners. These partners are aligned with Journey's unique teen customer proposition and are excited about and supportive of our strategic direction to better serve this customer through elevated assortments and depth. We will build on this footwear leadership position with our key brands and work to add new brands beyond those we're traditionally known for going forward. In conjunction with these efforts, we are deploying an in-store digital and social refresh at the end of the second quarter to build awareness about the enhanced assortment and access. Number two, build a journeys brand and enhance the Omni experience.

Mimi Eckel Vaughn: As part of these efforts they completed an extensive round of top to top meetings with our key vendor partners.

Mimi Eckel Vaughn: These partners are aligned with journeys unique teen customer proposition and are excited about and supportive of our strategic direction to better service customer through elevated assortments and depth.

Mimi Eckel Vaughn: We will build on this footwear leadership position with our key brands and work to add new brands beyond those were traditionally known for going forward.

Mimi Eckel Vaughn: In conjunction with these efforts, we are deploying and in store digital and social refresh at the end of the second quarter to build awareness about the enhanced assortment and access.

Mimi Eckel Vaughn: Number two build the journeys brand and enhance the omni experience.

Mimi Eckel Vaughn: This initiative centers around reinforcing Journeys as the destination for teen fashion footwear and Journeys as a leading retail brand. And to begin, we've updated our consumer segmentation to better market to our customers and help sharpen our Journeys brand purpose and market position. We've also onboarded a new creative agency, which is developing a new brand communication strategy. Digital acceleration is an important part of these efforts, including an enhanced web experience and personalized marketing to a specific audience with new segment segmentation.

Mimi Eckel Vaughn: This initiative centers around reinforcing journeys as the destination for teen fashion footwear, and journeys as a leading retail brand and.

Mimi Eckel Vaughn: And to begin we've updated our consumer segmentation to better market to our customers and help sharpen our journeys brand purpose and market position.

Mimi Eckel Vaughn: We are also on boarded a new creative agency, which is developing a new brand communication strategy.

Digital acceleration is an important part of these efforts, including an enhanced web experience and personalized marketing to specific audience with the new segment segmentation.

Mimi Eckel Vaughn: Layering in new functionality and benefits of our all-access loyalty program will allow us to further differentiate journeys and incentivize customers to consolidate their purchases with us. And finally, we're developing an updated store concept and next-generation design to better showcase our brands and enhance brand storytelling. Our plans are to roll it out and begin testing in the latter part of the year. Number three, leverage the power of our people.

Mimi Eckel Vaughn: Layering in new functionality and benefits of our all access loyalty program will allow us to further differentiate journeys and incentivize customers to consolidate their purchases with us.

Mimi Eckel Vaughn: Finally, we are developing an updated store concept and next generation design to better showcase our brands and enhance brand storytelling.

Mimi Eckel Vaughn: Our plans are to rollout and begin testing in the back part of the year.

Mimi Eckel Vaughn: We have an incredible group of store employees that sets us apart by providing excellent service as a differentiator. Putting our employees at the center of our brand is key to boosting conversion and driving success in stores. To do this, we're improving our employee training, raising the bar on our service standards, and increasing customer engagement through convenience capabilities such as mobile point-of-sale and data-driven suggestive selling. Number four, optimize to drive operational and cost efficiencies.

Mimi Eckel Vaughn: Number three leverage the power of our people.

Mimi Eckel Vaughn: We have an incredible group of store employees that sets us apart by providing excellent service as a differentiator.

Mimi Eckel Vaughn: Putting our employees at the center of our brand is key to boosting conversion and driving success in stores.

To do this we're improving our employee training raising the bar on our service standards and increasing customer engagement through convenience capabilities, such as mobile point of sale and data driven suggestive selling.

Mimi Eckel Vaughn: These are ongoing initiatives aimed toward lowering the leverage point on our fixed cost base. They include continuing to close unproductive stores while using our customer data to drive higher sales recapture rates online or through nearby stores, and optimization projects focused on major expense items and inventory. Finally, across our company, we're going deeper in CRM and customer data analytics. Accelerating these Consumer Insight efforts is helping us build on the early success of our Loyalty and Affinity programs, where we now have over 2.5 million members in the SHU club in its first two years, over 2.5 million members in Journeys All Access in under a year, and nearly 900,000 members in J&M Insiders.

Mimi Eckel Vaughn: Number four optimized to drive operational and cost efficiencies. These are ongoing initiatives aimed toward lowering the leverage point on our fixed cost base. They include continuing to close unproductive stores, while using our customer data to drive higher sales.

Mimi Eckel Vaughn: Recapture rates online or through nearby stores and optimization projects focused on major expense items in inventory.

Mimi Eckel Vaughn: Finally across our company, we're going deeper on CRM and customer data analytics accelerating these consumer insight efforts is helping us build on the early success of our loyalty and affinity programs, where we now have over $2 5 million members in the shoe club in its first two years over $2 5 million.

Mimi Eckel Vaughn: <unk> and journeys all access in under a year and nearly 900000 members in JM insiders in all cases members are driving higher engagement and repeat purchase rates, which is motive motivating us to grow these programs further.

Mimi Eckel Vaughn: In all cases, members are driving higher engagement and repeat purchase rates, which is motivating us to grow these programs further. Turning to our outlook, we continue to navigate volatile consumer behavior and are not assuming any significant change in the near term, especially as we continue to cycle strong compares for SHU and J&M. As such, we expect our top line to remain under pressure in Q2.

Mimi Eckel Vaughn: Turning to our outlook, we continue to navigate volatile consumer behavior and are not assuming any significant change in the near term, especially as we continue to cycle strong compares for shoe and Jane M.

Mimi Eckel Vaughn: As such we expect our topline to remain under pressure in Q2.

Mimi Eckel Vaughn: We continue to expect the back half to be stronger as fresh receipts begin to hit Journey stores later this quarter and our product repositioning is more thoroughly reflected. Thinking about the cadence of the year, keep in mind the first half consists of our two lowest volume quarters, where sales de-leverage and our fixed expense base tends to be magnified. Once sales growth returns, this works to our advantage, providing significant leverage and earnings upside.

Mimi Eckel Vaughn: We continue to expect the back half to be stronger as fresh receipts begin to hit journeys stores later this quarter and our product repositioning is more thoroughly reflected.

Mimi Eckel Vaughn: Thinking about the cadence of the year keep in mind. The first half consists of our two lowest volume quarters, where sales deleverage on our fixed expense base tends to be magnified when sales growth returns. This works to our advantage, providing significant leverage and earnings upside.

Mimi Eckel Vaughn: In the meantime, we're maintaining our full-year guidance, and as Journey's product advances and our other strategic initiatives across the business take hold, we expect momentum to build from there into fiscal 26. Before handing the call over to Tom, I'd like to thank all our people for your incredible dedication and for the tremendous efforts I know you will put forth in the balance of the year. I could not be more excited about the results we will achieve with our footwear-focused strategy and the future prospects for our company. And with that, I'll pass it on.

Mimi Eckel Vaughn: In the meantime, we're maintaining our full year guidance as journeys product advances and our other strategic initiatives across the business take hold we expect momentum to build from there into fiscal 'twenty six.

Speaker Change: Before handing the call over to Tom I'd like to thank all our people for your incredible dedication and for the tremendous efforts I know you will put forth in the balance of the year.

Speaker Change: Could not be more excited about the results, we will achieve with our footwear focused strategy and the future prospects for our company.

Speaker Change: And with that I'll pass it over to Tom.

Thomas Allen George: Thanks, Mimi. We are pleased we kicked off the year with progress on our initiatives and delivered better financial results for the quarter than we anticipated. Journeys and Genesco Brands Group outperformed our expectations in sales, gross margins, and expenses, offsetting a profit impact from sales pressure in our shoe and J&M business. Looking ahead, the efforts we are making to return to growth while better controlling expenses will position us for healthier productivity. Turning to results, consolidated revenue for the quarter was $458 million, better than our expectations and down approximately 5% compared to last year.

Thomas Allen George: Thanks Mimi.

Thomas Allen George: Please we kicked off the year with progress on our initiatives and deliver better financial results for the quarter.

Thomas Allen George: We anticipated.

Thomas Allen George: Journeys and Genesco brands group outperformed our expectations sales gross margins and expenses.

Speaker Change: Offsetting the profit impact from sales pressure in our shoe and Janet and businesses. Looking ahead. The efforts, we're making to return to growth, while better containing expenses will position us for healthier productivity and profitability.

Thomas Allen George: Stores we closed last year had a negative 1% net impact on total sales, most of it from journeys. However, positively, these closures resulted in improved overall fleet productivity. In addition, the progress we've made in our digital business helped offset some of the top-line pressure on our stores. Finally, Genesco Brands Group sales were down as expected and accounted for about a third of the overall sales decrease as we streamline and reposition this business. Total company comps were down 5%.

Speaker Change: Turning to results.

Thomas Allen George: By channel total, store comps were down 7%, while direct comps were up 3%, with digital sales accounting for 23% of total retail sales, up from 21% last year. Overall, adjusted gross margin was up 30 basis points compared to last year, with disciplined inventory management driving lower markdowns and a greater mix of direct-to-consumer sales offsetting some product mix pressure. By division, Journey's gross margin was up 40 basis points versus last year, due primarily to lower markdown. Hughes gross margin was down 180 basis points, driven mainly by brand sales mixed shifts.

Speaker Change: <unk> revenue for the quarter was $458 million better than our expectations and down approximately 5% compared to last year.

The stores, we closed last year had a negative 1% net impact on total sales most of it from journeys.

Speaker Change: Positively these closures resulted in improved overall fleet productivity.

Speaker Change: In addition to progress we've made in our digital business helped helped offset some of the topline pressure on our stores.

Speaker Change: Finally, genesco brands group sales were down as expected and accounted for about a third of the overall sales decrease as we streamline and reposition this business.

Thomas Allen George: J&M's gross margin was up 70 basis points, driven largely by lower warehouse costs. Lastly, Genesco's adjusted gross margin was up 150 basis points, due primarily to brand sales mix. Moving down the P&L, SG&A expense was 54.2% of sales.

Speaker Change: Total company comps were down 5% channel total store comps were down 7%, while direct comps were up 3% with digital sales accounted for 23% of total retail sales up from 21% last year.

Speaker Change: Overall, adjusted gross margin was up 30 basis points compared to last year with disciplined inventory management, driving lower markdowns and a greater mix of direct to consumer sales offsetting some product mix pressures.

Speaker Change: By Division journeys gross margin was up 40 basis points versus last year due primarily to lower markdowns shoes gross margin was down 180 basis points, driven mainly by brand sales mix shift.

Speaker Change: <unk> gross margin was up 70 basis points, driven largely by lower warehouse costs Lastly, genesco brands adjusted gross margin was up 150 basis points.

Speaker Change: Due primarily to brand sales mix shift.

Speaker Change: Moving down the P&L SG&A expense was 54, 2% of sales.

Thomas Allen George: 220 basis points above last year. Our cost savings initiatives and closure of unproductive stores reduced the impact of sales de-leverage, offsetting additional variable expenses associated with our direct sales growth, as well as increased appreciation from our technology investors. In dollars, SG&A expenses came in better than expected, down 1.5% relative to last year.

Speaker Change: 220 basis points above last year, our cost savings initiatives and closure of unproductive stores reduce the impact of sales deleverage offsetting additional variable expenses associated with our direct sales growth as well as increased depreciation from our technology investments.

Speaker Change: SG&A expenses came in better than expected down one 5% relative to last year. Despite across the board cost pressure as a reminder, the first quarter is one of our low lower volume quarters with expenses at minimum levels and largely fixed which results in significant.

Thomas Allen George: Despite across-the-board cost pressure, as a reminder, the first quarter is one of our lower volume quarters with expenses at minimum levels and largely fixed, which results in significant de-leverage on sales declines. To that end, we remain squarely focused on reducing occupancy costs and the overall level of fixed expense in the store channel. In Q1, we achieved a 9% reduction in straight-line rent expense on 119 lease renewals across the company with an average term of approximately four years.

Speaker Change: Average on sales declines.

Speaker Change: To that end, we remain squarely focused on reducing occupancy costs over and overall level of fixed expense in the store channel in Q1, we achieved a 9% reduction straight line rent expense on 119 lease renewals across the company with an average term of approximately four years. This is.

Thomas Allen George: This is on top of 202 renewals in fiscal 24 with a 15% reduction in straight-line rent expansion. Moreover, we continue to have a lot of daylight ahead of us to generate additional rent savings as over 50% of our fleet comes up for renewal in the next couple of years. Despite making progress in reducing rent expenses and optimizing selling salaries to drive increased productivity, the impact of minimum wage requirements and competitive hourly wages remains a challenge we continue to actively address.

Speaker Change: On top of 202 renewals in fiscal 'twenty, four with a 15% reduction in straight line rent expense.

Speaker Change: Moreover, we continue to have a lot of daylight ahead of us to generate additional rent savings is over 50% of our fleet.

Speaker Change: Comes up for renewal in the next couple of years.

Speaker Change: Despite making progress in reducing rent expenses and optimizing selling salaries.

Speaker Change: Drive increased productivity the impact of minimum wage requirements in competitive hourly wages remains a challenge we continue to actively address.

Thomas Allen George: In summary, for the first quarter, we incurred an adjusted operating loss of $30 million compared to an adjusted operating loss of $22.7 million for Q1 last year. This all resulted in an adjusted diluted loss per share of $2.10 for the quarter, versus a loss per share of $1.59 last year.

Speaker Change: In summary for the first quarter, we incurred an adjusted operating loss of $30 million compared to an adjusted operating loss of $22 7 million for Q1 last year. This all resulted in adjusted diluted loss per share of $2 10 for the quarter.

Speaker Change: Versus the loss per share of $1 59 West <unk>.

Thomas Allen George: Turning now to capital allocation and the balance sheet, we ended the quarter in a net debt position of approximately 40 million with clean inventories, down 17% from last year, as we're well-positioned to add newness and freshness to the assortment. Financially, our robust cash flow, solid balance sheet, and liquidity available through our revolving line of credit position us well to pursue all our strategic initiatives. Capital expenditures in Q1 were $6 million, with investments primarily directed to retail stores and our digital and omni-channel initiatives. Lastly, we didn't repurchase any shares during the quarter.

Speaker Change: Turning now to capital allocation and the balance sheet. We ended the quarter in a net debt position of approximately $40 million with clean inventories down 17% from last year as we are well positioned to add newness and freshness to the assortment financially our robust cash flow solid balance sheet and liquidity available through our revolving line of.

Speaker Change: Credit position us well to pursue all of our strategic initiatives.

Speaker Change: Capital expenditures in Q1 were $6 million with investments primarily directed to retail stores.

Speaker Change: Our digital and omni channel initiatives.

Speaker Change: Lastly, we didn't repurchase any shares during the quarter. However, we have purchased a total of 7700 shares at an average price of $24 90 since ended the quarter. The remaining amount available on our current authorization is $51 9 million.

Thomas Allen George: However, we purchased a total of 7,700 shares at an average price of $24.90 since the end of the quarter. The remaining amount available on our current authorization is $51.9 million. Over the past five years, we have repurchased nearly 40% of our outstanding shares. We are gaining meaningful traction on our cost plan and continue to target a reduction in the annualized run rate of $45 to $50 million by the end of fiscal year 25 before reinvestment. The plan is broad-based across the organization, with all divisions contributing.

The past five years, we have repurchased nearly 40% of our outstanding shares.

We are gaining meaningful traction on our cost plan and continue to target a reduction in the <unk>.

Annualized run rate of $45 million to $50 million by the end of fiscal year 'twenty five before reinvestment.

Speaker Change: Plan is broad based across the organization with all divisions contributing may.

Thomas Allen George: Major elements include improving store profitability through occupancy cost reduction, selling salary, productivity, and other store cost savings. We are also executing initiatives to optimize our inventory, our marketing spend, warehouse, freight, and logistics costs, and other procurement efficiencies. We opened one store and closed 21, ending the quarter with 1,321 total stores.

Speaker Change: The major elements include improving store profitability through occupancy cost reductions selling seller productivity and other store cost savings.

Speaker Change: We are also executing initiatives to optimize our inventory, our marketing spend warehouse freight and logistics costs and other procurement efficiencies.

Speaker Change: We opened one store and closed 21, ending the quarter with 1321 total stores.

Thomas Allen George: With respect to journey store closures, we closed 17 stores in the first quarter, primarily mall-based locations. We've continued to evaluate up to 50 potential Journeys closures in total this year. The savings from these closures will eliminate approximately $14 million of annualized costs from SG&A Expense, which is in addition to the roughly $25 million of annualized savings from the stores we closed in fiscal 24 and the 45 to 50 million of run rate savings we are targeting for this year.

Speaker Change: With respect to journeys store closures, we closed 17 stores in the first quarter, primarily mall based locations. We've continued to evaluate up to 50 potential journeys closures in total this year.

The savings from these closures will eliminate approximately $14 million of annualized costs from SG&A expense, which is which is in addition to the roughly $25 million of annualized savings from the stores. We closed in fiscal 'twenty, four and a $45 million to $50 million of run rate savings we are targeting for this year.

Speaker Change: Sure.

Thomas Allen George: Our objective with these cost-saving measures and strategic store closures is to optimize our financial performance and achieve greater profitability even on more moderate sales growth. Now, turning to guidance. Although we exceeded our bottom line expectations for Q1, the operating environment remains uncertain. As such, we are reiterating our full year earnings per share guidance of $0.60 to $1 per share. To give you more color, let me start with some specifics around Q2.

Speaker Change: Our objective with these cost savings measures and strategic store closures is to optimize our financial performance.

Speaker Change: <unk> greater profitability, even on more moderate <unk>.

Speaker Change: Sales growth.

Speaker Change: Now turning to guidance.

Speaker Change: Although we exceeded our bottom line expectations for Q1, the operating environment remains uncertain and as such we are reiterating our full year earnings per share guidance of 60 to a $1 per share.

Speaker Change: To give you more color, let me start with some specifics around Q2.

Thomas Allen George: While we are optimistic about the new product receipts that will hit Journey stores towards the end of the quarter, ongoing declines in the vulcanized category continue to pressure our top line in Q2. Additionally, we are maintaining a more conservative view on SHU and J&M as they both continue their robust multi-year comparisons and expect lower Genesco brand sales. In all, we expect a low single-digit sales decline versus last year, with comps similar to Q1, but total sales benefiting from a week of back-to-school that shifts into Q2.

Speaker Change: While we are optimistic about the new product receipts that will hit journeys stores towards the end of the quarter ongoing declines in the Vulcanize category continue to pressure our top line in Q2.

Speaker Change: Additionally, we are maintaining a more conservative view on Hu and Jane M. As they both continue to anniversary robust multi year compares and expect lower Genesco brand sales in all we expect a low single digit sales decline versus last year with comps similar.

For Q1 with total sales benefiting from a week of back to school that shifts into Q2.

Thomas Allen George: Regarding Q2 gross margins, we expect an overall gross margin decrease of approximately 20 to 30 basis points, mostly due to product makeshifts that ensue. In addition, the sales decline in our largely fixed cost base will result in SG&A de-leverage of roughly 80 to 100 basis points, leading to an EPS loss in the neighborhood of $0.30 more than we lost in Q2 last year.

Speaker Change: Regarding Q2 gross margins, we expect an overall gross margin decrease.

Speaker Change: Approximately 20 to 30 basis points.

Speaker Change: Mostly due to product mix shift at journeys and Schuh. In addition sales decline in our largely fixed cost base will result in SG&A deleverage of roughly 80 to 100 basis points.

Speaker Change: Leading to an EPS loss in the neighborhood of 30 <unk> more than we lost in Q2 last year.

Thomas Allen George: Looking to the full year, we remain confident that our turnaround strategy at Journeys can begin to drive meaningful improvements in the back half, as the peak back-to-school and holiday selling periods enable us to generate profitability and positive earnings. That said, given the ongoing uncertainty in the consumer and macro environments, particularly during the lulls between peak shopping periods. We believe it's prudent to maintain a conservative view throughout Fiscal 25, with improvements in the latter part of the year setting the stage for more significant growth in fiscal 26.

Speaker Change: Looking to the full year, we remain confident that our turnaround strategy at journeys can begin to drive meaningful improvements in the back half.

Speaker Change: As the peak back to school and holiday selling periods.

Speaker Change: Enable us to generate profitability and positive earnings that said given the ongoing uncertainty.

Speaker Change: In the consumer and macro environments, particularly during the walls between peak shopping periods.

Speaker Change: We believe it's prudent to maintain a conservative view throughout fiscal 'twenty five.

Speaker Change: With improvements in the latter part of the year setting the stage for more significant growth in fiscal 'twenty six.

Thomas Allen George: Taking this all into account, we continue to expect fiscal 25 total sales to decrease 2% to 3% or down 1% to 2% when excluding the 53rd week last year. The variance between the high and low end of the range is primarily due to uncertainty in the consumer and macro environments.

Speaker Change: Taking this all into account we continue to expect fiscal 'twenty five total sales.

Speaker Change: <unk> decreased 2% to 3% were down 1% to 2% when excluding the 50 <unk> week last year the variance between the high and low end of the range is primarily due to uncertainty in the consumer and macro environments. We continue to expect gross margin rates to be flat.

Thomas Allen George: We continue to expect gross margin rates to be flat to up 10 basis points for the year, with improvement at SHU mitigating some product and channel mix pressure at Journey. As a percentage of sales, we now expect adjusted SG&A in the range of flat to deleverage of 20 basis points, versus a range of flat 2D leverage at 30 basis points prior, with the cost reduction efforts I described earlier and the other actions working to partially offset the leverage on Fixed Expenses.

To up 10 basis points for the year with improvement at shoe mitigating some product and channel mix pressure.

Speaker Change: At journeys.

Speaker Change: As a percentage of sales we now expect adjusted SG&A in the range of flat to deleverage of 20 basis points versus the range of flat to deleverage of 30 basis points prior.

Speaker Change: With the cost reduction efforts I described earlier and the other actions working to partially offset deleverage.

Speaker Change: On fixed expenses.

Thomas Allen George: All of these inputs result in an operating margin that is in the range of Fiscal 24's operating margin. Our guidance assumes no additional share repurchases, which results in fiscal 25 average shares outstanding of approximately $11.2 million, and we expect the tax rate to be approximately 26%.

Speaker Change: All of these inputs result in an operating margin that is in the range of fiscal 'twenty four is operating margin.

Speaker Change: Our guidance assumes no additional share repurchases.

Speaker Change: This results in fiscal 'twenty, five average shares outstanding of approximately $11 2 million and we expect the tax rate to be approximately 26%.

Operator: In summary, we are encouraged by the progress we have made to improve Journeys and optimistic that the additional steps we are now taking will position the business for stronger growth and success. Furthermore, we are confident that the initiatives we're taking across all our businesses will help us more fully unlock our longer-term earnings potential. Operator, please open the call for questions. Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press Star 1 on your telephone.

Speaker Change: Summary, we are encouraged by the progress we have made to improve journeys and optimistic that the additional steps. We are now taking will position the business for stronger growth and success. Further we are confident that the initiatives, we're taking across all our businesses will help us more fully unlock our longer term.

Speaker Change: <unk> earnings potential.

Speaker Change: Operator, please open the call for questions.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

Operator: A confirmation tone will indicate your line is in the question. You may press star 2 if you'd like to remove your question from the... For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Speaker Change: You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: Our first question comes from Mitch... with Seaport Research. Please proceed with your, Yes. Thanks for taking my questions. I've got about a handful. I want to start with a couple questions around the guidance and then maybe work my way up to a little bit bigger picture on the strategy. I am curious...

Speaker Change: Our first question comes from the line of Mitch <unk> with Seaport Research. Please proceed with your question.

Mitchel John Kummetz: So for 2Q, Tom, you said comp, similar to OneCue, and I'm specifically thinking about the journeys business. The comp was down 5 and 1 q, so basically down 5 and 2 q. I know the guy... for the full year on sales, it's a mid-single-digit decline. You're closing stores. Can you talk a little bit about, given the progress that you expect to make in the back half with journeys, how you expect journeys to comp in the back half? Do you think you can get to a positive comp by maybe the fourth quarter? Can you maybe speak to that a little bit? Yeah, good, good question, Mitch.

Mitch <unk>: Yes, thanks for taking my questions.

Speaker Change: Talking about a handful I want to start with a couple of questions around the guidance of entity.

Speaker Change: My worry a little bit bigger picture on the strategy.

Im curious FERC.

Speaker Change: So for QQ, Tom you said comps.

Speaker Change: Similar to one Q and Im specifically thinking about the journeys business.

The comp was down five and the <unk>.

Speaker Change: We've got five in Q2 I know the guide.

Speaker Change: For journeys for the full year on sale is a mid single digit decline Youre closing stores can you talk a little bit about.

Speaker Change: Given the progress that you expect to make in the back half with journeys, how you expect Germany to call in the back half do you think you can get to a positive comp by maybe the fourth quarter can you could you maybe speak to that a little bit.

Thomas Allen George: On the second quarter, I want to comment a little bit on that, you know, we think it's appropriate to be more cautious in the second quarter, given the pressures we're seeing with the vulcanized business on journeys and some of the pressures we're seeing in the shoe business. And hoping to get to a positive comp in the third quarter, but that could be challenging. But for the fourth quarter, we do feel that we're gonna have a positive comp, albeit small, in the fourth quarter. Okay, that's very helpful.

Speaker Change: Yes, good good question Mitch.

Speaker Change: On the second quarter, I want to comment a little bit little bit on that as well.

Speaker Change: We think it's appropriate to be more cautious with the second quarter given the pressures, we're seeing with the <unk> business on journeys and some of the pressures we're seeing in the shoe business and the Johnston <unk> Murphy business. So we think it's appropriate to take a more cautious view in the back half with journeys we do.

Speaker Change: Steel.

Speaker Change: The third quarter, there still could be some challenges there again, it's a little bit of the leaky bucket kind of concept.

Speaker Change: Balkanized will be under pressure, but we feel we've got a substantial amount of new relevant product coming in to be able to mitigate that but we are taking a cautious view on the comp.

Speaker Change: There and hoping to get to a positive comp in the third quarter, but there could be challenging but the fourth quarter. We do feel that we're going to have a positive, albeit small in the fourth quarter.

Speaker Change: Okay, that's very helpful.

Mitchel John Kummetz: And then on the Marg, you guys definitely beat plan on margins in the first quarter. I think you made a slight change to your SG&A assumption for the full year. But I guess I'm a little surprised maybe you're not being more optimistic on margins in terms of the full year guidance based on kind of the outperformance in the first quarter. Can you maybe speak to why that is?

Speaker Change: And therefore margin.

Speaker Change: You guys.

Speaker Change: Definitely plan on margins in the first quarter.

Speaker Change: You made a slight change to your SG&A assumption for the full year.

Speaker Change: Im a little surprised maybe you're not being more optimistic on margins in terms of the full year guidance based on kind of the outperformance.

Speaker Change: In the first quarter can you maybe speak to why that is I don't know if there were any maybe SG&A shifts.

Mimi Eckel Vaughn: I don't know if there were any maybe SG&A shifts out of 1Q into 2Q, but you talked about some of the conservatism around relative to the 1Q outperformance. Mitch, thanks for your question. It's Mimi.

Speaker Change: <unk> into Q2, but maybe.

Speaker Change: You talked about some of the conservatism around margin relative.

Speaker Change: Relative to the <unk> outperformance.

Mimi Eckel Vaughn: And I'll hand it over to Tom in a minute. But what we saw in the first quarter, which was very positive for our business, was a lower amount of markdowns than we believed we needed to take. And I think that's a real testament to how clean our inventory is and how well we have been managing inventory. We are looking at some mixed shifts where we are seeing a shift in mix of overall product that will put some pressure on gross margin. And so that's what we are looking at.

Speaker Change: Mitch Thanks for your question, It's me and I'll hand, it over to Tom in a minute, but what we saw in the first quarter and we were.

Speaker Change: That was very positive for our business is a.

Thomas Allen George: Lower a lower amount of markdowns than than we believed we needed to take and I think thats, a real testament to the how clean our inventory is and how well we have been managed managing inventory. We are looking at some mix shift where we are seeing.

Thomas Allen George: A shift in <unk>.

Thomas Allen George: Mixed of overall.

Thomas Allen George: Product.

That will put some pressure on gross margin and so that's what where we are looking at however, it is a real positive story with higher average selling prices and so as we see a shift out of balkanized product into.

Mimi Eckel Vaughn: However, it is a real positive story with higher average selling prices. And so as we see a shift out of vulcanized product into the assortment and diversified ranges of products and brands that we've been talking about, then we see a pickup in ASPs. And so it's a positive, positive gross margin story for the year. And then for SG&A expense, I think there are a few puts and takes that put us more in the neighborhood of where we'd end up being.

Thomas Allen George: And to the assortment and diversified ranges of products and brands that we've been talking about then we see a pick up in Asps and so it's a positive positive gross margin story.

Thomas Allen George: For the year and then for SG&A expense I think there are a few puts and takes that.

Thomas Allen George: Put us more in the neighborhood of where where we'd end up being and with the traction we're getting with the cost savings programs.

Thomas Allen George: Yeah, in the end, with the traction we're getting with the cost savings programs and continuing to with the store closures, we actually improved the SG&A due to leverage guidance. And then back to the... Mimi's comments on the margin were dead on, and that shift from Vulcanize to other products had an impact on the shoe business as well. So that's the Journeys and Shoe Impact. So we thought we, that first quarter was, but generally speaking, for the entire industry. So they just sort of wait and see how the next few months go. Then they'll be in a better position to evaluate their reorder rate.

Thomas Allen George: Continuing with the store closures, we actually improve the SG&A deleverage guidance, some and then back to the <unk>.

Thomas Allen George: Jamie's comments on the margin they were dead on that shift from Vulcanize to other product.

Thomas Allen George: There is an impact on the shoe business as well.

Thomas Allen George: So thats the journeys and schuh impacts so we thought that.

Thomas Allen George: That first quarter was.

Thomas Allen George: While we outperformed there were lower margins again, a testament to our inventory management and but that said, we think it's best to be more cautious there going forward.

Thomas Allen George: And then generally speaking the wholesale business, which Johnston <unk> Murphy has a wholesale business and our Genesco brands group, we wanted to take a more cautious view.

Thomas Allen George: Excuse me on that going forward as well.

Because the wholesale accounts.

Thomas Allen George: Getting feedback is not just for us, but generally speaking for the entire industry is sort of wait and see how the next few months ago, then there'll be.

Thomas Allen George: In a better position to evaluate there.

Thomas Allen George: Reorder rates.

Mitchel John Kummetz: And then, um... On the assortment pivot at Journey, it sounds like you're making progress already. And I can appreciate that there are long lead times for these things and that it takes a while for the new leadership to really have an impact. But is there any way to sort of quantify how much turnover you're seeing in the assortment? Like, you know, by the time that you get to the back half.

Thomas Allen George: And then.

Thomas Allen George: On the assortment.

Speaker Change: Germany sounds like Youre, making progress already and I can appreciate that there are long lead times to these things and then it takes a while for the noodle leadership, we're really have an impact but is there any way to.

Sort of quantify.

How much turnover, you're seeing in the assortment right.

Speaker Change: By the time do you get to the back half.

Mimi Eckel Vaughn: Is it going to be, you know, 50% different than what it was a year ago? And like, once you sort of achieve the full pivot, is there any way to, again, kind of quantify how much has changed through that process? I don't know if that's a fair question, but I'm just trying to better understand kind of how that moves along and how different things are going to be when you're at the point where you know you're happy with the changes you've made.

Speaker Change: Is it going to be.

50% different than what it was a year ago.

Speaker Change: And once you've sort of achieved the full pivot is there any way again.

Speaker Change: Quantifying how much has changed.

Speaker Change: That process I don't know if thats, a fair question, but I'm, just trying to better understand kind of how that moves along and how different things are going to be when you're at the point, where you're happy with the changes you've made.

Mimi Eckel Vaughn: Mitch, you've got your perspective exactly right on what's going on and some of the lead times that we need. We are very excited to have Andy Gray on board, and his perspective as a merchant and his commercial perspective and brand relationships are just great additions to our strong team here. And so we see fashion broadening, and we see teens embracing more wearing occasions, and this is in both fashion, athletic, and casual, so we can serve both sides of the market.

Speaker Change: <unk> got a year perspective is exactly right on what's going on in some of the lead times that we need we are very excited to have Andy Gray on board and his perspective, as a merchant and as commercial perspective and brand relationships are.

Speaker Change: Just great additions to our our strong team here.

Speaker Change: And so we see fashion broadening and we see teens embracing more wearing occasions and this is in both fashion athletic and casual which we can serve both sides of the market and it's an opportunity to fill our customers' closets with things they didn't have before and so on.

Mimi Eckel Vaughn: And it's an opportunity to fill our customers' closets with things they didn't have before. And so our team has been pretty narrow, focused on vulcanized product on a couple of major brands. And so we're well-positioned to take advantage of this move. And you know us from the years, we just continue to evolve our fashion to where the teen is going.

Speaker Change: Our team has been pretty narrow focus on vulcanize product on a couple of major brands and so we are well positioned to take advantage of this move and Union you know us over the years that we just continue to evolve our fashion to where the team is going there is also an interested in interest in apparel, which is really positive.

Mimi Eckel Vaughn: There's also an interest in apparel, which is really positive to see in teen apparel. And there's a greater appetite for newness and freshness. And so you will see that there is a pretty significant change in our assortment. And it's lots of brands that we're building into. It's not just one or two that we are excited about.

Speaker Change: Good to see and teen apparel, and Theres, a greater appetite for newness and freshness and a lot of times footwear follows into into apparel and so we have been moving into the assortment that we know will drive our business. We got some good reads in in the first.

Speaker Change: Quarter by pulling forward some of our product and really.

Speaker Change: Being able to amplify the assortments during our peak periods and that bodes well for the back half and so you will see that there is a pretty significant change in our assortment and its lots of brands that we are building into it's not just one or two that we are excited about and so there should be some pretty significant change in our assortment Chris.

Mitchel John Kummetz: And so there should be some pretty significant changes in our assortment. Chris Santella, our new chief merchant at Journeys, and the team have seriously hustled to make major improvements in the back half. And again, we've been encouraged by the consumer reaction to those product changes so far. And then maybe just as a quick follow-up to that, before I get into some bigger picture stuff, you mentioned vulcanized rubber a number of times, and you're sort of overexposed to vulcanized rubber historically.

Speaker Change: Ann Taylor, our new Chief merchant at journeys and the team have seriously hustle to make major improvements in the back half and again, we've been encouraged by the consumer reaction to those product changes so far.

Mimi Eckel Vaughn: Again, is there any way to kind of quantify how that's shifting? Like, is it bulk, you know, I don't know, 30, 40% of your business today, and once you get to the back half, it's, you know, 20%, and then once all this is kind of completed, it's down to 10. Is there any sort of thing that we can be looking at there? Just to get some perspective, just to get some perspective on that, Mitch, we have been known as a destination for some of that vulcanized product.

Speaker Change: And then maybe just as a quick follow up to that target into some bigger picture stuff you mentioned balkanized a number of times.

Speaker Change: And youre sort of overexposure to Vulcanize. Historically again is there any way to kind of quantify how is that shifting.

Is the bulk.

Speaker Change: I don't know, 30%, 40% of your business today, and once we get to the back half, but 20% and then once all of this is kind of completed its down to town like is there any any sort of thing that we can be looking out there.

Speaker Change: Yes, just again some perspective just to give some perspective on that Mitch. We we have been known as a destination for some of that <unk> product and the consumer has really gravitated toward that over the past several years. It was a mix of of lower price point product and just real.

Mimi Eckel Vaughn: And the consumer has really gravitated toward that over the past several years. It was a mix of lower price point products and just really, really versatile. And so we typically go through these fashion shifts where the consumer finds something new, and we provide something new to them. And so you will see that vulcanized will be a materially smaller part of our mix, but it's not going away.

Speaker Change: Really versus at all and so we have we typically go through these fashion shifts where the consumer find something new and we provide something new to them and so you will see that vulcanize will be materially smaller part of our mix, but it's not going away. There is certainly still interest in <unk>.

Mitchel John Kummetz: There's certainly still interest in vulcanized products, but lots of other brands, lots of other brands that offer sandals, lots of other brands on the athletic side of the world are gaining lots of interest and lots of traction. This is positive because, for a while, our consumer was just really not motivated to buy anything. I think some of the innovation that didn't take place during the pandemic is now being caught up with, and we're excited about what we're seeing. And then Mimi, in your prepared remarks talking about some of the strategies and journeys, you mentioned the importance of segmentation and differentiation.

Speaker Change: Product, but lots of other brands lots of other brands that offer sandals lots of other brands in the athletic side of the world are gaining lots of interest and lots of lots of traction. This is a positive because for a while our consumer was just really not not motivated to buy.

Speaker Change: Anything I think some of the innovation that that didn't take place during the pandemic. Our brands are catching up on and we're excited about what we're seeing.

Speaker Change: And then in your prepared remarks talking about some of the strategies at journeys.

Speaker Change: You mentioned the importance of segmentation and differentiation can you talk a little bit about more.

Mimi Eckel Vaughn: Can you talk a little bit more about what that means for that business? I don't know if you're referring to exclusives or can you just sort of give the big picture, you know, where do you see journeys going in terms of the segmentation sort of differentiating itself from some of the competition? Mitch, thanks for that question.

Speaker Change: More about what that means for them.

Speaker Change: That business I don't know, if youre, referring to exclusives or or can you just sort of big picture.

Speaker Change: Where do you see journeys going in terms of in terms of the segmentation sort of different differentiating itself from some of the competition.

Mimi Eckel Vaughn: So reinvigorating the product in the near term is the near-term goal to start building the momentum that we need. But at the same time, we are taking a look at, you know, more specifically who our consumer is. And what's been distinctive about Journeys is that we provide a place that the team can go for both their fashion athletic and their casual assortment.

Mitch Thanks for that question, so reinvigorating the product in the near term is the near term goal to start building the momentum that we need but at the same time, we are taking a look at more specifically at who our consumer is and what's been been distinctive about journeys.

Speaker Change: Is that we provide a place that the team can go by both their fashion athletic and their casual assortment. So we're so much more lifestyle positioned and we'd carved out an important place.

Mimi Eckel Vaughn: So we're so much more lifestyle oriented, and we've carved out an important place in the competitive set that is focused more on girls, focused more on that teen girl, which is a really important consumer that our brands want to serve. And also, you know, focused not just on the athletic part of the market, which many of our competition does quite well. And so we've got a unique place within the environment and a unique place within the mall.

Speaker Change: In the competitive set that is focus more on girls focus more on that teen girl, which is a really important consumer that they are brands want to serve and also.

Speaker Change: Focused not just on the athletic part of the market, which many of our competition does quite well and so we've got a unique place within the within the environment any unique place within the mall.

Speaker Change: This unique value proposition positions us as a fashion authority to come back into serve our consumers and so when we think about our different consumer segments, all teens arent alike.

Mimi Eckel Vaughn: This unique value proposition positions us as a fashion authority to come back and serve our consumers. And so when we think about our different consumer segments, all teens aren't alike. Some tend to wear a more diversified assortment. Some tend to like athletic more.

Speaker Change: And two we're a more diversified assortment some tend to like athletic more some are fashion leaders that are ahead of the game and some are fashion followers and so by being able to work all of the.

Mimi Eckel Vaughn: Some are fashion leaders that are ahead of the game, and some are fashion followers. And so, by being able to work all of the great investments that we have made in CRM and data, and understanding our consumer, we're able to leverage that into more specific marketing around the diversification that we provide in our product line. And so we are excited about that end-to-end strategy of thinking about our consumer segments, providing products that are relevant for the different segments, and then marketing to those specific segments. And that's what's underway right now.

Great investments that we have made against CRM and against data and against understanding our consumer we're able to leverage that into more specific marketing around the diversification that we provide in our product line and so we are excited about that end to end strategy.

GE of thinking about our consumer segments, providing product that is relevant for the different segments, and then marketing to those specific segments and that that's what's underway right now.

Mitchel John Kummetz: You started to answer my last question because my last question has to do with loyalty and the analytics. So I think you said there are two and a half million members in the Journeys Loyalty Program. Can you talk about how that's building? And because it's a relatively new program for Journeys, and again, if there are any sort of takeaways from SHU that you think could be applied to Journeys, and when will the analytics really kick in? Where you can do better, you know, targeted marketing and all of those fun things at Journeys. So Mitch, the All Access program, which is the Journeys program, you can go ahead and sign up online.

Speaker Change: You started to answer my last question. My last question has to do with loyalty.

Speaker Change: Analytics. So I think you said $2 5 million members in the in the journey is loyalty program can you talk about how that's building.

Because it's a relatively new program for journeys and again, if there are any sort of takeaways from shoe that you think could be applied to journeys and when will the analytics really kicking in it to where you can do better.

Speaker Change: Targeted marketing and all of those fun things at journeys.

Mimi Eckel Vaughn: If you haven't already, we fully launched it in our stores last July. So it hasn't even been a year, and we have had two and a half million members sign up. And the success we've had with SHU has been because that program has been a couple of years in the running. The journeys customers trust us a lot. They're excited to hear from us, and so that's a real measure of how quickly we've been able to sign people up. You can get a welcome gift.

Mitch <unk>: So Mitch the all access program, which is the journeys program. You can go ahead and sign up online. If you haven't already we fully launched that in our stores last July so it hasnt, even been a year and we have had two 5 million members sign up.

Mitch <unk>: And the success, we've had with Schuh has been because that program has been a couple of years in the running the journeys customer trusts us a lot theyre excited to hear from us and so that's a real measure of how quickly we've been able to sign people up you can get a welcome gift you can get nice perks like free shipping.

Mimi Eckel Vaughn: You can get nice perks like free shipping. You can earn points. But what is most compelling is that we are seeing that the spend is greater with and because the frequency is greater with people who have joined our loyalty program, and that really is the biggest benefit. And so our loyalty program is hooked to our CRM program, and we've built a data analytics capability that goes along with this. And so understanding our customers as well in the digital world as we have traditionally done in the physical world will give us a chance to engage with our customers more frequently to drive higher customer lifetime value.

Mitch <unk>: Earn points, but what is most compelling is that we are seeing that the spend.

Mitch <unk>: <unk>.

Mitch <unk>: Is is greater with and because the frequency is greater with people who have joined our loyalty program and that really is the biggest benefit and so our loyalty program is hub to our CRM program and we built a data analytics capability that goes along with this.

Mitch <unk>: So understanding our customers as well in the digital world as we have traditionally done in the physical world will give us a chance to engage with our customers more frequently to dry drive higher customer lifetime value. We're already seeing some of those benefits at schuh, where we are a bit ahead of this and so it's an.

Mimi Eckel Vaughn: We're already seeing some of those benefits at SHU where we are a bit ahead of this. And so it's an important part of how we'll be able to conserve, how we'll be able to serve our customers better going forward and also engage with our customers. Great. Thanks, guys, and good luck. Thanks for your questions, Mitch.

Mitch <unk>: <unk> Park.

Mitch <unk>: We will be able to conserve.

Mitch <unk>: We will be able to serve our consumer better going forward and also engage with our customers.

Speaker Change: Great. Thanks, guys and good luck.

Speaker Change: Thanks for your questions.

Operator: Thank you. Our next question comes from the line of Montero Moreno-Cheek with Jeffreys. Hello, and thank you for taking my call. I guess my first question would be about your new Johnson & Murphy marketing campaign; can you talk about any of the early reads there? And is the program like helping attract some younger customers? I'm glad you've seen that new campaign. We're pleased with that new campaign, and it is centered around leveraging the great heritage of the Johnston Murphy brand. There are not a lot of 175-year-old brands out there, but with a really modern twist.

Thank you. Our next question comes from the line of Montero Marino tick with Jefferies. Please proceed with your question.

Speaker Change: Hello, and thank you for taking my call.

Montero Marino: Yes, My first question would be.

Montero Marino: On your new Johnston <unk> Murphy marketing campaign can you talk about any of the early read there.

If the program like helping attracting some younger customers.

Speaker Change: I'm glad you're seeing that the new campaign, we're pleased with that that new campaign and it is centered around.

Leveraging the great heritage of the Johnston <unk> Murphy brand.

Speaker Change: A lot of 175 year old brands out there, but with a really modern twist and so we have gotten good feedback that that.

Montero Moreno-Cheek: And so we have gotten good feedback that all of that campaign has been in the market for a little over a month, and it speaks to both of those things, how much evolution we've made over time. And we are pleased with the results in Johnston Murphy since the pandemic. It's one of the most exciting areas and opportunities of growth for us. The pandemic gave us a chance to pivot harder into casual and comfortable products. It's a really terrific product that has great styling but has a lot of proprietary technology.

Speaker Change: All of that campaign has been in the market for a little over a month and.

Speaker Change: It speaks to both of those things how much evolution. We've made over time and we are pleased with the results in Johnston <unk> Murphy since the pandemic. It's one of the most exciting areas and opportunities of growth for us the pandemic gave us a chance to pivot harder into casual and comfortable product, it's really terrific.

Speaker Change: <unk>.

Speaker Change: That has great styling, but has a lot of proprietary technology and the technology is what's been revolutionizing, our offering and so we've been investing in product, it's a chance to sell consumers more hybrid product we've been known for dress product, but this is a this.

Mimi Eckel Vaughn: And the technology is what's revolutionizing our offering, and so we've been investing in product. It's a chance to sell consumers more hybrid product. We've been known for dress shoes, but this is dressier uppers on very comfortable bottoms.

Speaker Change: This is dressier uppers on very comfortable bottoms.

Mimi Eckel Vaughn: The reality is that our brand awareness for Johnston and Murphy is on the lower side versus peers, and so it's product first to get the product to be a really special product. And then this marketing campaign that we have been wrapping around the product is to build awareness in the repositioning that we've done for the brand. We are getting younger.

Speaker Change: Reality is that our brand awareness for Johnston <unk> Murphy is on the lower side versus peers and so it's product first to get the product to be really special product and then this marketing campaign that we have been wrapping around the product is to build awareness in the repositioning that we've done.

For the brand.

Mimi Eckel Vaughn: We are attracting younger customers into the brand, and we see a lot of opportunity. We've added a number of different categories to Johnston and Murphy, such as apparel and accessories, and have been growing those. And so it's a real lifestyle brand that our consumers have been telling us that they like buying us across lots of categories. And so we're going to reach a wider audience to tell J&M's story and educate the consumer and appeal to a younger cohort at the same time that we are retaining the customers that we've been able to traditionally serve. Thank you.

Speaker Change: We are getting younger we are attracting younger customers into the brand and we see a lot of opportunity. We've added in a number of different categories to Johnston <unk> Murphy against apparel and accessories and had been growing those and so it's a real lifestyle brand that our consumers have been telling us that they like buying us across.

<unk> lots of categories and so we're going to reach a wider audience to tell Jane M story, and educate the consumer and appeal to a younger.

Speaker Change: Cohort at the same time that we are retaining the customers that we've been able just traditionally served.

Speaker Change: Okay.

Mimi Eckel Vaughn: And then on, I know it was touched on, but is there anything else to add on the strategic initiative that journeys and just how it positions the brand in the longer term? Sure. So, you know, I've talked about the product initiatives quite a bit and talked about some of the customer segmentation. But there are a number of other elements around the Journeys plan. And importantly, it's building and promoting Journeys as a leading retail brand.

Speaker Change: Thank you and then on I know, we've touched on but.

Speaker Change: To add on the.

Speaker Change: Strategic initiative the journey, then <unk> Hao.

Speaker Change: <unk>.

Speaker Change: Brands in the longer term.

Speaker Change: Sure so.

Speaker Change: <unk> talked about the product initiatives quite a bit and.

Speaker Change: <unk>.

Speaker Change: Talked about some of the customer segmentation there are a number of other elements around that journeys plan and importantly, it's building and promoting journeys as a leading retail brand and we are.

Mimi Eckel Vaughn: We are improving our brand presence in our stores and online and on social. And digital is an important part of this as well, and we've had great success growing our digital business. There's a real opportunity here. SHU is at 40%.

Speaker Change: We are improving our brand presence in our stores and online and on social and.

Speaker Change: And digital is an important part of this as well and we've had great success growing our digital business. There's a real opportunity here shoe is at 40% journeys is at less than half of that and so there is a a visual theres a visual refresh at the website that we have lined up.

Mimi Eckel Vaughn: Journeys is at less than half of that, and so there's a visual refresh of the website that we have lined up and our all-access program as well. And so when we think about building the Journeys brand, it is about just calling attention to Journeys as a great retail brand in addition to the brands that we sell. We've got a creative agency on board that is crafting that story that we will reveal later this year.

Speaker Change: And our all access program as well and so when we think about building the journeys brand and it is about just calling attention to journeys as a great retail brand. In addition to the brands that we sell we've got a creative agency onboard that is crafting that story that we will reveal later this year.

Mimi Eckel Vaughn: As I said, it's improving our brand presence. It's really using all of the aspects of digital and all of the great work that we've done with CRM and data analytics. In addition to that, I talked about just leveraging our people.

Speaker Change: As I said, it's improving our brand presence, it's really using all of the aspects of digital and all of the great work that we've done with CRM and data analytics. In addition to that.

Speaker Change: <unk> talked about just leveraging our people stores are an important part of our customer journey and in today's retail World service can be a real differentiator and so our people and our stores are great ambassadors for our brand they are very into fashion. They love, telling the fashion stories and so we are thinking of ways that we.

Mimi Eckel Vaughn: Stores are an important part of our customer journey, and in today's retail world, service can be a real differentiator. And so our people in our stores are great ambassadors for our brand. They are very into fashion.

Mimi Eckel Vaughn: They love telling fashion stories, and so we are thinking of ways that we can engage them around the great changes that we're making on the product side and also on the storytelling side. And then, I guess the last one for me: anything worth noting on add-on purchases? Sure.

Speaker Change: Can engage them around the great changes that were made making on the product side and also on the storytelling side.

Speaker Change: And then I guess last one for me anything worth noting on add on purchases.

Mimi Eckel Vaughn: So, you know, I think the biggest thing to call out is that what we have been seeing is higher average selling prices, and higher average selling prices are a really positive thing. And so that is translating into higher ticket prices, and higher ticket averages. And that's been a positive thing. It's an opportunity to make some add-on sales there. And as the customer is trying on their shoes, what we have found is that we're quite successful at being able to sell them another pair of shoes. And so that's been an area of attention. Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Ms. Watt for any final questions. Thank you for joining us.

Speaker Change: Sure so.

Speaker Change: I think the biggest thing to call out is that what we have been seeing as we have been seeing.

Speaker Change: Higher average selling prices and the higher average selling prices are a really positive thing and so that is translating into higher ticket prices higher ticket averages and that's been a positive thing where we have put a lot of focus on add on sales is that we launched.

Speaker Change: Buy online pickup in store last year, and it's a good opportunity, we're seeing a 10 plus percent rate.

Speaker Change: Of our online sales moving to <unk> and we're focusing a lot on attachment when the customer comes into the store, it's an opportunity to to put some add on sales there and as the customers trying on their shoes at what we have found is they were quite successful at being able to sell them. Another pair of shoes and so that that's been an area.

Speaker Change: Attention.

Speaker Change: Thank you.

Speaker Change: Thank you.

Speaker Change: Ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. <unk> for any final comments.

Mimi Eckel Vaughn: We are looking forward to you joining us for our second quarter earnings call. Thank you. This concludes today's conference call. You may disconnect your lines at this time.

Speaker Change: Thank you for joining us for we are looking forward to you joining us for our second quarter earnings call.

Speaker Change: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Speaker Change: [music].

Operator: Thank you for your participation. Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music Music, ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day, everyone, and welcome to the Genesco First Quarter Fiscal 2025 Conference. Just a reminder, today's call is being recorded. I'll now turn the call over to Darryl MacQuarrie, Senior Director of FP&A. Please go ahead.

Darryl MacQuarrie: Good morning, everyone, and thank you for joining us to discuss our first quarter Fiscal 25 results. Participants on the call expect to make forward-looking statements reflecting our expectations as of today, but actual results could be different. Genesco refers you to this morning's earnings release and the company's SEC filings, including its most recent 10-K and 10-Q filings, for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today.

Speaker Change: Fiscal 2025 conference call.

Speaker Change: Just a reminder, today's call is being recorded I'll now turn the call over to Darryl Macquarie Senior director of S. P. N. A please go ahead sir.

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

Darryl MacQuarrie: Good morning, everyone and thank you for joining us to discuss our first quarter fiscal 'twenty five results.

Darryl MacQuarrie: Our disciplines on the call expect to make forward looking statements, reflecting our expectations as of today, but actual results could be different.

Speaker Change: <unk> refers you to this morning's earnings release, and the Companys SEC filings, including its most recent 10-K and 10-Q filings for some of the factors that could cause differences from the expectations reflected in the forward looking statements made today.

Speaker Change: Participants also expect to refer to certain adjusted financial measures during the call. All non-GAAP financial measures are reconciled to the GAAP counterparts in the attachments to this morning's press release and in schedules available on the company's website in the quarterly results section.

Darryl MacQuarrie: We have also posted a presentation summarizing our results here as well. With me on the call today is Mimi Vaughn, Board Chair, President, and Chief Executive Officer, and Tom George, Chief Financial Officer. Now, I'd like to turn the call over to Mimi. Thank you, Darryl. Good morning, everyone.

Speaker Change: We have also posted a presentation summarizing our results here as well.

Speaker Change: With me on the call today is Mimi Vaughn Board Chair, President and Chief Executive Officer.

Speaker Change: And Tom George Chief Financial Officer.

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

Mimi Eckel Vaughn: Thanks for joining us. While the year is unfolding largely as we expected, we were pleased to deliver first quarter top and bottom line results that were ahead of our most recent guidance. Sales at Journeys came in a bit ahead of expectations, paving the way for the more significant progress we're working with urgency to achieve for back to school and holiday. Clean inventories and the benefits of our cost reduction and store optimization efforts contributed to the beat as well.

Mimi Eckel Vaughn: Thank you Daryl and good morning, everyone. Thanks for joining us.

While the year is unfolding largely as we expected we were pleased to deliver first quarter top and bottom line results that were ahead of our most recent guidance.

Mimi Eckel Vaughn: Sales at journeys came in a bit ahead of expectations paving the way for the more significant progress we're working with urgency to achieve for back to school and holiday.

Mimi Eckel Vaughn: Clean inventories and the benefits of our cost reduction and store optimization efforts contributed to the beat as well.

Mimi Eckel Vaughn: Journey's results more than offset some pressure at Shue and Johnston and Murphy, which were both up against robust multi-year comparisons and both affected by a delayed start to the spring selling season. Overall, the consumer environment remains choppy. Consumers continue to show a willingness to shop when there's a reason, like we saw at Easter, and to retreat when there's not. In addition, faced with ongoing inflationary pressure, they remain quite selective, shopping almost exclusively for key footwear items and brands.

Mimi Eckel Vaughn: Journeys results more than offset some pressure at schuh and Johnston <unk> Murphy, which were both up against robust multiyear comparisons and both affected by a delayed start to the spring selling season.

Mimi Eckel Vaughn: Overall, the consumer environment remains choppy.

Mimi Eckel Vaughn: Consumers continue to show a willingness to shop when Theres a reason like we saw at Easter and retreat when Theres not.

Mimi Eckel Vaughn: In addition faced with ongoing inflationary pressure they remain quite selective shopping almost exclusively for key footwear items and brands.

Mimi Eckel Vaughn: When the product is exactly what they want, they buy it, and when it's not, they move on. Since the pandemic, we've taken major actions to evolve in response to the substantial change in our consumer shopping behavior. We've also demonstrated a strong track record over time of successfully evolving our businesses, emerging even stronger when confronted with economic and consumer disruption. Two recent examples are we reimagined J&M's product assortment and branding in response to the shift to casual accelerated by the pandemic, and we sharpened our focus on the shoe consumer with elevated product and marketing to achieve market share gains and record sales. We're taking many of the same actions with Journeys, and I'm confident we will achieve the same success. Turning around Journeys' business remains our number one priority.

Mimi Eckel Vaughn: When the product is exactly what they want they are buying and when its not theyre moving on.

Mimi Eckel Vaughn: Since the pandemic, we have taken major actions to evolve in response to the substantial change in our consumer shopping behavior.

Mimi Eckel Vaughn: We've also demonstrated a strong track record over time of successfully evolving our businesses and margin even stronger when confronted with economic and consumer disruption.

Mimi Eckel Vaughn: Two recent examples are we re imagine <unk> product assortment and branding in response to the shift to casual accelerated by the pandemic and we sharpened our focus on the shoe consumer with elevated product and marketing to achieve market share gains and record sales.

Mimi Eckel Vaughn: We're taking many of the same actions with journeys and I am confident we will achieve the same success.

Mimi Eckel Vaughn: Turning around journeys business remains our number one priority.

Mimi Eckel Vaughn: With new leadership in place since the beginning of the year, we're diligently executing on our new strategic plan and working to dramatically accelerate the pace of improvement. I'm very encouraged by the traction we're achieving and optimistic that the changes we're making to our assortment, along with other strategic initiatives around building our brand and elevating our consumer experience, will unlock the meaningful potential we know exists in the journeys business. With what we anticipated would be our most challenging quarter now behind us, I look forward to continuing to execute and building momentum through the balance of Fiscal 25 and into Fiscal 26.

Mimi Eckel Vaughn: With new leadership in place since the beginning of the year, we're diligently executing to our new strategic plan and working to dramatically accelerate the pace of improvement.

Mimi Eckel Vaughn: I am very encouraged by the traction, we're achieving and optimistic that the changes, we're making to our assortment along with other strategic initiatives around building, our brand and elevating our consumer experience will unlock the meaningful potential we know exists in the journeys business.

Mimi Eckel Vaughn: With what we anticipated would be our most challenging quarter now behind us I look forward to continuing to execute and building momentum through the balance of fiscal 'twenty five and into fiscal 'twenty six.

Mimi Eckel Vaughn: Now for color on our individual businesses, starting with journeys. We were pleased that sales, gross margin, and expenses all exceeded our expectations in Q1. After a slow start in February, we saw a nice improvement driven by the Easter holiday, the later timing of tax refunds, and the key items in our assortment that we were able to pull forward to maximize demand during this peak period. We continue to prudently manage Journey's inventory, which was down 20% from last year.

Mimi Eckel Vaughn: Now for color on our individual businesses starting with journeys.

Mimi Eckel Vaughn: We were pleased that sales gross margin and expenses all exceeded our expectations in Q1.

After a slow start in February we saw a nice improvement driven by the Easter holiday. The later timing of tax refunds and the key items in our assortment that we were able to pull forward to maximize the demand during this peak period.

Mimi Eckel Vaughn: We continue to prudently manage journeys inventory, which was down 20% to last year.

Mimi Eckel Vaughn: This enabled us to keep markdowns in check and deliver gross margins that were ahead of our expectations. The savings we captured from our ongoing cost program also helped Journeys achieve an operating income close to last year's level, despite lower sales.

Mimi Eckel Vaughn: This enabled us to keep markdowns in check and deliver gross margins that were ahead of our expectations.

Mimi Eckel Vaughn: The savings we captured from our ongoing cost program also helped journeys achieve an operating income close to last year's level, Despite lower sales.

Mimi Eckel Vaughn: Journey's digital business was also a highlight, posting double-digit growth. Consumers responded well to our recent initiatives and enhanced online assortment, improved digital marketing, loyalty perks for all Access members, and the opportunity to buy online and pick up in store. In Q4 last year, we experienced increased pressure on Journey's core product assortment, including boots and vulcanized products. With limited ability to adjust right away, given footwear product lead times, we expected this dynamic to continue into the front half of this year, despite facing easier comparisons.

Mimi Eckel Vaughn: Journeys digital business was also a highlight posting double digit growth.

Mimi Eckel Vaughn: Consumers responded well to our recent initiatives and enhanced online assortment improved digital marketing loyalty parks for all access members and the opportunity to buy online and pickup in store.

Mimi Eckel Vaughn: In Q4 of last year, we experienced increased pressure on journeys core product assortment, including boots, and vulcanize product with limited ability to adjust right away given.

Mimi Eckel Vaughn: Footwear product lead times, we expected this dynamic to continue into the front half of this year despite facing easier compares.

Mimi Eckel Vaughn: A diversified assortment across casual and fashion athletic categories that serves multiple wearing occasions is what's responding to the Journey's customer right now, and we're responding to it. We're excited about the opportunity to deliver newness across a number of brands, which should also drive higher ASPs. This has not only helped our results in Q1, but also instills us with greater confidence for the product changes we've made for the second half, as we have secured significantly more allocation of product to drive our back-to-school and holiday business.

Mimi Eckel Vaughn: A diversified assortment across casual and fashion athletic categories that serves multiple wearing occasions is what's resonating with the journeys customer right now and we're responding to it.

Mimi Eckel Vaughn: We're excited about the opportunity to deliver newness across a number of brands, which should also drive higher asps.

Mimi Eckel Vaughn: This not only helped our results in Q1, but also instills us with greater confidence for the product changes we've made for the second half as we have secured significantly more allocation of product to drive our back to school and holiday business.

Mimi Eckel Vaughn: No other retailer serves the teen customer, especially the teen girl, quite the same as Journey's with its unique proposition as the destination for teen fashion footwear across casual and athletic brands. With this strong strategic positioning, we have the backing of our consumers, who drove positive store traffic once again in Q1, and the incredible support of our brand partners as we work together to drive Journey's growth. Moving now to SHU.

Mimi Eckel Vaughn: No other retailer serves the teen customer, especially the teen girl quite the same as journeys with its unique proposition as the destination for teen fashion footwear across casual and athletic brands.

Mimi Eckel Vaughn: With this strong strategic positioning we have the backing of our consumer who drove positive store traffic once again in Q1 and the incredible support of our brand partners as we work together to drive journeys growth.

Mimi Eckel Vaughn: Moving now to schuh.

Mimi Eckel Vaughn: In Q1, the business continued to contend with a tough UK macro environment made more difficult by robust stack compares and extremely unseasonable weather that delayed the start of spring selling. Similar to journeys in the U.S., the UK consumer has become more discriminating and key item focused in their purchases, putting pressure on the footwear category and frequency of purchases in the market overall during the quarter. That said, for shoe, very strong Easter selling helped to partially offset softer periods with the mixed shift away from vulcanized products driving a higher footwear average selling price.

Mimi Eckel Vaughn: In Q1, the business continued to contend with a tough UK macro environment made more difficult by robust stack compares and extremely unseasonable weather that delayed the start to spring selling.

Mimi Eckel Vaughn: Similar to journeys in the U S. The U K consumer has become more discriminating and key item focused in their purchases putting pressure on the footwear category and frequency of purchases in the market overall during the quarter.

Mimi Eckel Vaughn: That said for schuh very strong Easter selling helped to partially offset softer periods with the mix shift away from vulcanize product driving higher footwear average selling prices.

Mimi Eckel Vaughn: The same brands driving Journey's business are also responding at SHU. At roughly 40% of sales, SHU's advanced digital capabilities and highly penetrated e-com business remain a key channel for consumer engagement with relatively stronger performance during the quarter. Additionally, the kids' business continued to shine in Q1, with most of our key brands up year over year, driving strong sales growth of 9%. On a further positive note, SHU's comps have improved in the second quarter so far as more sunny weather has spurred sales of spring and summer merchandise.

Mimi Eckel Vaughn: The same brands driving journeys business are also resonating at schuh.

Mimi Eckel Vaughn: At roughly 40% of sales shoes advanced digital capabilities and highly penetrated E. Comm business remains a key channel for consumer engagement with relatively stronger performance during the quarter.

Mimi Eckel Vaughn: Additionally, the kids business continued to shine in Q1 with most of our key brands up year over year, driving strong sales growth of 9%.

On a further positive note shoes comps have improved in the second quarter to date as more sunny weather has spurred sales of spring and summer merchandise.

Mimi Eckel Vaughn: The marketplace remains difficult, but looking ahead, the team is focused on several initiatives to improve the trend and drive growth. Bolstered by the recent additions of new marketing and e-commerce heads to senior leadership, the team is building on the progress made to sharply differentiate its customer proposition, selling fashion footwear to youth, with a focus on the female consumer. These initiatives include gaining even stronger access to the best brands and hottest products, revamping SHU's creative approach to marketing, employing new digital tools to drive traffic to the website, and deploying more campaigns within the SHU Club Loyalty Program, which now represents 35% of total sales.

Mimi Eckel Vaughn: The marketplace remains difficult, but looking ahead. The team is focused on several initiatives to improve the trend and drive growth bolstered by the recent additions of new marketing and ecommerce heads to senior leadership. The team is building on the progress made to sharply differentiate shoes customer proposition selling fashion footwear to you.

Mimi Eckel Vaughn: <unk> with a focus on the female consumer.

Mimi Eckel Vaughn: These initiatives include gaining even stronger access to the best brands and hottest product.

Mimi Eckel Vaughn: Revamping shoes creative approach to marketing employing new digital tools to drive traffic to the website and deploying more campaigns within the shoe club loyalty program, which now represents 35% of total sales.

Mimi Eckel Vaughn: Turning to Johnston & Murphy, against strong multi-year comparisons and back-to-back record sales years, Q1 proved more challenging than anticipated. From a category perspective, apparel and accessories were a highlight, driven by strength in blazers and woven shirts.

Speaker Change: Turning to Johnston <unk> Murphy against strong multi year compares in back to back record sales years Q1 proved more challenging than anticipated.

From a category perspective apparel and accessories were a highlight driven by strength in blazers and woven shirts.

Mimi Eckel Vaughn: Apparel and accessories represented nearly half of J&M's direct-to-consumer business, underscoring the great success the team has had in building a True Lifestyle Brand. Store conversion increased in the quarter, showing high purchase intent and interest in the assortment, although traffic was the challenge, particularly in April, with a slower start to spring selling.

Speaker Change: Carol and accessories represented nearly half of <unk> direct to consumer business underscoring the great success. The team has had.

Speaker Change: Building a true lifestyle brand.

Speaker Change: Store conversion increased in the quarter showing high purchase intent and interest in the assortment. Although traffic was the challenge, particularly in April with a slower start to spring selling.

Mimi Eckel Vaughn: However, in May, traffic and seasonal sales have since picked up. We remain extremely positive on J&M's growth outlook as the cornerstone of our branded business and have now begun to tell the story to consumers in a much bigger way. Last month, J&M launched its much-anticipated new marketing campaign, Not Your Dad's Shoe Company, which showcases the team's accomplishments repositioning the business into a more casual, modern lifestyle brand. The campaign is part of a strategic effort to celebrate J&M's rich heritage while reshaping how customers view the almost 175-year-old brand and building awareness with a broader and younger audience about its The ads are reaching consumers across broadcast TV, digital placements, J&M's own website, and social media channels, including TikTok, which is a new channel for J&M that's quickly garnered a very positive reaction.

Speaker Change: However in may traffic and seasonal sales has since picked up.

Speaker Change: We remain extremely positive on Gms growth outlook as the cornerstone of our branded business and have now begun to tell the story to consumers in a much bigger way.

Last month <unk> launched its much anticipated new marketing campaign, not your dad's shoe company, which showcases the team's accomplishments repositioning the business into a more casual modern lifestyle brand.

Speaker Change: The campaign is part of our strategic effort to celebrate <unk> rich heritage, while reshaping how customers view, the almost 175 year old brand and building awareness with a broader and younger audience on its ongoing evolution.

Speaker Change: The ads are reaching consumers across broadcast television digital placements <unk> own website, and social media channels, including Tictoc, which is a new channel for Jane M. That's quickly garnered a very positive reaction.

Mimi Eckel Vaughn: While it's early days, the brand is already seeing a lift in organic search, and feedback overall has been strong. Rounding out the branding discussion, we've made good progress repositioning the Genesco Brands Group business. We've simplified our portfolio of licenses to emphasize key brands and channels. This means lower sales in the short term but more profit, which was evident in the results this quarter and should continue going forward. Now, moving back to Journeys.

Speaker Change: While it's early days the brand is already seeing a lift in organic search and feedback overall has been strong.

Speaker Change: Rounding out the branded discussion we've made good progress repositioning the genesco brands group business, we've simplified our portfolio of licenses to emphasize key brands and channels and this means lower sales in the short term, but more profit which was evident in the results this quarter and should be going forward.

Mimi Eckel Vaughn: Although product advantages won't be fully evident until the back half, Andy Gray, Journeys' new president, and the team have been hard at work to rapidly accelerate the pace of Journeys' improvement. Part of that process has been strengthening the leadership team. We have already brought in a new chief merchant, are in the process of bringing in a new chief marketing officer, and have established a new strategy and transformation role to oversee the creation and execution of our ongoing plan.

Speaker Change: Now moving back to journeys, although product advantages wont be fully evident until the back half Andy Gray journeys, new president and the team has been hard at work to rapidly accelerate the pace of journeys improvement.

Speaker Change: Part of that process has been strengthening the leadership team we have already brought in a new chief merchant are in the process of bringing in a new chief marketing officer and have established a new strategy and transformation role to oversee the creation and execution of our ongoing plan.

Mimi Eckel Vaughn: And as I said, I'm very pleased with the traction we're achieving in this plan that will impact the customer across product, brand, and experience. I'll take a moment to update you on the key initiatives, which are a mix of both strategic acceleration and disciplined expense management, which is making a difference as we build toward positive comp. Number one, drive product leadership and create marketplace differentiation.

Speaker Change: And as I said I'm very pleased with the traction we're achieving in this plan that will impact the customer across product brand and experience.

Speaker Change: I'll take a moment to update you on the key initiatives, which are a mix of both strategic acceleration and disciplined expense management, which is making a difference as we build toward positive comps.

Speaker Change: Number one drive product leadership and create marketplace differentiation.

Mimi Eckel Vaughn: I've already talked about the most impactful progress our new Chief Merchant, Chris Santella, and his team have made to drive near-term improvement. They've quickly secured significantly more allocation of in-demand product to drive our back-to-school and holiday business, including leaning into both athletic and casual styles across a number of brands.

Speaker Change: I've already talked about the most impactful progress our new chief merchant, Chris <unk> and his team have made to drive near term improvement.

Speaker Change: <unk> quickly secured significantly more allocation of in demand product to drive our back to school and holiday business.

This includes leaning into both athletic and casual styles across a number of brands.

Mimi Eckel Vaughn: As part of these efforts, they completed an extensive round of top-to-top meetings with our key vendor partners. These partners are aligned with Journey's unique teen customer proposition and are excited about and supportive of our strategic direction to better serve this customer through elevated assortments and depth. We will build on this footwear leadership position with our key brands and work to add new brands beyond those we're traditionally known for going forward. In conjunction with these efforts, we are deploying an in-store digital and social refresh at the end of the second quarter to build awareness about the enhanced assortment and access. Number two, build a journeys brand and enhance the Omni experience.

Speaker Change: As part of these efforts they completed an extensive round of top to top meetings with our key vendor partners.

These partners are aligned with journeys unique teen customer proposition and are excited about and supportive of our strategic direction to better service customer through elevated assortments and depth.

Speaker Change: We will build on this footwear leadership position with our key brands and work to add new brands beyond those were traditionally known for going forward.

Speaker Change: In conjunction with these efforts, we are deploying and in store digital and social refresh at the end of the second quarter to build awareness about the enhanced assortment and access.

Speaker Change: Number two build the journeys brand and enhance the omni experience.

Mimi Eckel Vaughn: This initiative centers around reinforcing Journeys as the destination for teen fashion footwear and Journeys as a leading retail brand. And to begin, we've updated our consumer segmentation to better market to our customers and help sharpen our Journeys brand purpose and market position. We've also onboarded a new creative agency, which is developing a new brand communication strategy. Digital acceleration is an important part of these efforts, including an enhanced web experience and personalized marketing to a specific audience with new segment segmentation.

Speaker Change: This initiative centers around reinforcing journeys as the destination for teen fashion footwear, and journeys as a leading retail brand and.

Speaker Change: And to begin we've updated our consumer segmentation to better market to our customers and help sharpen our journeys brand purpose and market position we.

Speaker Change: We are also on boarded a new creative agency, which is developing a new brand communication strategy.

Speaker Change: Digital acceleration is an important part of these efforts, including an enhanced web experience and personalized marketing to specific audience with the new segment segmentation.

Mimi Eckel Vaughn: Layering in new functionality and benefits of our all access loyalty program will allow us to further differentiate journeys and incentivize customers to consolidate their purchases with us. Finally, we're developing an updated store concept and next generation design to better showcase our brands and enhance brand storytelling. Our plans are to roll out and begin testing in the latter part of the year. Number three, leverage the power of our people.

Layering in new functionality and benefits of our all access loyalty program will allow us to further differentiate journeys and incentivize customers to consolidate their purchases with us.

Finally, we are developing an updated store concept in next generation design to better showcase our brands and enhance brand storytelling.

Speaker Change: Our plans are to rollout and begin testing in the back part of the year.

Speaker Change: Number three leveraged the power of our people.

Mimi Eckel Vaughn: We have an incredible group of store employees that sets us apart by providing excellent service as a differentiator. Putting our employees at the center of our brand is key to boosting conversion and driving success in stores. To do this, we're improving our employee training, raising the bar on our service standards, and increasing customer engagement through convenience capabilities such as mobile point of sale and data-driven suggestive selling. Number four, optimize to drive operational and cost efficiencies.

Speaker Change: We have an incredible group of store employees that sets us apart by providing excellent service as a differentiator.

Speaker Change: Putting our employees at the center of our brand is key to boosting conversion and driving success in stores.

Speaker Change: To do this we're improving our employee training raising the bar on our service standards and increasing customer engagement through convenience capabilities, such as mobile point of sale and data driven suggestive selling.

Mimi Eckel Vaughn: These are ongoing initiatives aimed toward lowering the leverage point on our fixed cost base. They include continuing to close unproductive stores while using our customer data to drive higher sales, recapture rates online or through nearby stores, and optimization projects focused on major expense items and inventory. Finally, across our company, we're going deeper in CRM and customer data analytics. Accelerating these consumer insight efforts is helping us build on the early success of our Loyalty and Affinity programs, where we now have over two and a half million members in the SHU club in its first two years, over two and a half million members in Journeys All Access in under a year, and nearly 900,000 members in J&M Insider

Speaker Change: Number four optimized to drive operational and cost efficiencies. These are ongoing initiatives aimed toward lowering the leverage point on our fixed cost base. They include continuing to close unproductive stores, while using our customer data to drive higher sales.

Speaker Change: Recapture rates online or through nearby stores and optimization projects focused on major expense items in inventory.

Speaker Change: Finally across our company, we're going deeper on CRM and customer data analytics accelerating these consumer insight efforts is helping us build on the early success of our loyalty and affinity programs, where we now have over two 5 million members in the shoe club in its first two years over $2 5 million men.

Speaker Change: <unk> and journeys all access in under a year and nearly 900000 members and JM insiders in all cases members are driving higher engagement and repeat purchase rates, which is motive motivating us to grow these programs further.

Mimi Eckel Vaughn: In all cases, members are driving higher engagement and repeat purchase rates, which is motivating us to grow these programs further. Turning to our outlook, we continue to navigate volatile consumer behavior and are not assuming any significant change in the near term, especially as we continue to cycle strong compares for SHU and J&M. As such, we expect our top line to remain under pressure in Q2.

Speaker Change: Turning to our outlook, we continue to navigate volatile consumer behavior and are not assuming any significant change in the near term, especially as we continue to cycle strong compares for shoe and Jane M.

Speaker Change: As such we expect our topline to remain under pressure in Q2.

Mimi Eckel Vaughn: We continue to expect the back half to be stronger as fresh receipts begin to hit Journey stores later this quarter and our product repositioning is more thoroughly reflected. Thinking about the cadence of the year, keep in mind that the first half consists of our two lowest volume quarters, where sales de-leverage and our fixed expense base tends to be magnified. Once sales growth returns, this works to our advantage, providing significant leverage and earnings upside.

Speaker Change: We continue to expect the back half to be stronger as fresh receipts begin to hit journeys stores later this quarter and our product repositioning is more thoroughly reflected.

Speaker Change: Thinking about the cadence of the year keep in mind. The first half consists of our two lowest volume quarters, where sales deleverage on our fixed expense base tends to be magnified when sales growth returns. This works to our advantage, providing significant leverage and earnings upside.

Mimi Eckel Vaughn: In the meantime, we're maintaining our full-year guidance as Journey's product advances and our other strategic initiatives across the business take hold. We expect momentum to build from there into fiscal 26. Before handing the call over to Tom, I'd like to thank all our people for your incredible dedication and for the tremendous efforts I know you will put forth in the balance of the year. I could not be more excited about the results we will achieve with our footwear focus strategy and the future prospects for our company. And with that, I'll pass it over.

Speaker Change: In the meantime, we're maintaining our full year guidance as journeys product advances and our other strategic initiatives across the business take hold we expect momentum to build from there into fiscal 'twenty six.

Speaker Change: Before handing the call over to Tom I'd like to thank all our people for your incredible dedication and for the tremendous efforts I know you will put forth in the balance of the year.

Speaker Change: Could not be more excited about the results, we will achieve with our footwear focused strategy and the future prospects for our company.

Speaker Change: And with that I'll pass it over to Tom.

Thomas Allen George: Thanks, Mimi. We are pleased we kicked off the year with progress on our initiatives and delivered better financial results for the quarter than we anticipated. Journeys and Genesco Brands Group outperformed our expectations in sales, gross margins, and expenses, offsetting a profit impact from sales pressure in our Shu and Jane M business. Looking ahead, the efforts we are making to return to growth while better containing expenses will position us for healthier productivity. Turning to results, consolidated revenue for the quarter was $458 million, better than our expectations and down approximately 5% compared to last year.

Thomas Allen George: Thanks Mimi.

Thomas Allen George: We were pleased we kicked off the year with progress on our initiatives and deliver better financial results for the quarter.

Tom George: Painted.

Speaker Change: <unk> and <unk> brands group outperformed our expectations in sales gross margins and expenses.

Speaker Change: Offsetting the profit impact from sales pressure in our shoe and Jane and businesses. Looking ahead. The efforts, we're making to return to growth, while better controlling expenses will position us for healthier productivity and profitability.

Thomas Allen George: Stores we closed last year had a negative 1% net impact on total sales, most of it from journeys. However, positively, these closures resulted in improved overall fleet productivity. In addition, the progress we've made in our digital business helped offset some of the top line pressure on our stores. Finally, Genesco Brands Group sales were down as expected and accounted for about a third of the overall sales decrease as we streamline and reposition this business. Total company comps were down 5%.

Speaker Change: Turning to results.

Thomas Allen George: By channel, total store comps were down 7%, while direct comps were up 3%, with digital sales accounting for 23% of total retail sales, up from 21% last year. Overall, adjusted gross margin was up 30 basis points compared to last year, with disciplined inventory management driving lower markdowns and a greater mix of direct-to-consumer sales offsetting some product mix pressure. By division, Journey's gross margin was up 40 basis points versus last year, due primarily to lower markdown. Hugh's gross margin was down 180 basis points, driven mainly by brand sales mixed shifts.

Speaker Change: <unk> revenue for the quarter was $458 million better than our expectations and down approximately 5% compared to last year. The stores. We closed last year had a negative 1% net impact on total sales most of it from journeys.

Speaker Change: Positively these closures resulted in improved overall fleet productivity and.

Speaker Change: In addition to the progress we've made in our digital business helped helped offset.

Speaker Change: Some of the topline pressure on our stores.

Speaker Change: Finally, genesco brands group sales were down as expected and accounted for about a third of the overall sales decrease as we streamline and reposition this business.

Speaker Change: Total company comps were down 5% channel total store comps were down 7%.

Speaker Change: While direct comps were up 3% with digital sales accounting for 23% of total retail sales up from 21% last year.

Speaker Change: Overall, adjusted gross margin was up 30 basis points compared to last year with discipline.

Speaker Change: Inventory management, driving lower markdowns, and a greater mix of direct to consumer sales offsetting some product mix pressures.

Speaker Change: By Division journeys gross margin was up 40 basis points versus last year due primarily to lower markdowns shoes gross margin was down 180 basis points, driven mainly by brand sales mix shift.

Thomas Allen George: J&M's gross margin was up 70 basis points, driven largely by lower warehouse costs. Lastly, Genesco brand suggested gross margin was up 150 basis points, due primarily to the mixed ship. Moving down the P&L, SG&A expense was 54.2% of sales.

Speaker Change: <unk> gross margin was up 70 basis points, driven largely by lower warehouse costs Lastly, genesco brands adjusted gross margin was up 150 basis points.

Speaker Change: Due primarily to brand sales mix shift.

Speaker Change: Moving down the P&L SG&A expense was 54, 2% of sales.

Thomas Allen George: 220 basis points above last year. Our cost savings initiatives, including the enclosure of unproductive stores, reduced the impact of sales deleverage, offsetting additional variable expenses associated with our direct sales growth, as well as increased appreciation from our technology investors. In dollars, SG&A expenses came in better than expected, down 1.5% relative to last year.

Speaker Change: 220 basis points above last year, our cost savings initiatives and closure of unproductive stores reduce the impact of sales deleverage offsetting additional variable expenses associated with our direct sales growth as well as increased depreciation from our technology investments.

Speaker Change: SG&A expenses came in better than expected down one 5% relative to last year <unk>.

Thomas Allen George: Despite across-the-board cost pressure, as a reminder, the first quarter is one of our lower volume quarters with expenses at minimum levels and largely fixed, which results in significant de-leverage on sales declines. To that end, we remain squarely focused on reducing occupancy costs and the overall level of fixed expense in the store channel. In Q1, we achieved a 9% reduction in straight-line rent expense on 119 lease renewals across the company with an average term of approximately four years.

Speaker Change: Despite across the board cost pressure.

Speaker Change: As a reminder, the first quarter is one of our low lower volume quarters with expenses at minimum levels and largely fixed.

Speaker Change: Which results in significant deleverage on sales declines.

Speaker Change: To that end, we remain squarely focused on reducing occupancy costs over and overall level of fixed expense in the store channel.

Speaker Change: In Q1, we achieved a 9% reduction straight line rent expense on 119 lease renewals across the company with an average term of approximately four years. This.

Thomas Allen George: This is on top of 202 renewals in fiscal 24 with a 15% reduction in straight-line rent expansion. Moreover, we continue to have a lot of daylight ahead of us to generate additional rent savings as over 50% of our fleet comes up for renewal in the next couple of years. Despite making progress in reducing rent expenses and optimizing selling salaries, to drive increased productivity, the impact of minimum wage requirements and competitive hourly wages remains a challenge we continue to actively address.

Speaker Change: This is on top of 202 renewals in fiscal 'twenty, four with a 15% reduction in straight line rent expense.

Speaker Change: Moreover, we continue to have a lot of daylight ahead of us to generate additional rent savings is over 50% of our fleet comes up for renewal in the next couple of years.

Speaker Change: Despite making progress in reducing rent expenses and optimizing selling salaries to drive increased productivity.

Speaker Change: Packed a minimum wage requirements in competitive hourly wages remains a challenge we continue to actively address.

Thomas Allen George: In summary, for the first quarter, we incurred an adjusted operating loss of $30 million compared to an adjusted operating loss of $22.7 million for Q1 last year. This all resulted in an adjusted diluted loss per share of $2.10 for the quarter, versus a loss per share of $1.59 last year.

Speaker Change: In summary for the first quarter, we incurred an adjusted operating loss of $30 million compared to an adjusted operating loss of $22 7 million for Q1 last year.

Speaker Change: This all resulted in adjusted diluted loss per share of $2 10 for the quarter.

Speaker Change: Versus the loss per share of $1 59 last year.

Thomas Allen George: Turning now to capital allocation and the balance sheet, we ended the quarter in a net debt position of approximately $40 million with clean inventories, down 17% from last year, as we are well positioned to add newness and freshness to the assortment. Financially, our robust cash flow, solid balance sheet, and liquidity available through our revolving line of credit position us well to pursue all our strategic initiatives. Capital expenditures in Q1 were $6 million, with investments primarily directed to retail stores and our digital and omni-channel mission. Lastly, we didn't repurchase any shares during the quarter.

Speaker Change: Turning now to capital allocation and the balance sheet. We ended the quarter in a net debt position of approximately $40 million with clean inventories down 17% from last year as we are well positioned to add newness and freshness to the assortment financially our robust cash flow solid balance sheet and liquidity available through our revolving line of.

Speaker Change: Credit position us well to pursue all of our strategic initiatives.

Speaker Change: Capital expenditures in Q1 were $6 million with investments primarily directed to retail stores.

Speaker Change: And our digital and omni channel initiatives.

Lastly, we didn't repurchase any shares during the quarter. However, we have purchased a total of 7700 shares at an average price of $24 90.

Thomas Allen George: However, we purchased a total of 7,700 shares at an average price of $24.90 since the end of the quarter. The remaining amount available on our current authorization is $51.9 million. Over the past five years, we have repurchased nearly 40% of our outstanding shares. We are gaining meaningful traction on our cost plan and continue to target a reduction in the annualized run rate of $45 to $50 million by the end of fiscal year 25 before reinvestment. The plan is broad-based across the organization, with all divisions contributing.

Speaker Change: Ended the quarter the remaining amount available on our current authorization is $51 9 million.

Speaker Change: Over the past five years, we have repurchased nearly 40% of our outstanding shares.

Speaker Change: We are gaining meaningful traction on our cost plan and continue to target a reduction in that.

Speaker Change: Annualized run rate of $45 million to $50 million by the end of fiscal year 'twenty five before reinvestment.

Speaker Change: The plan is broad based across the organization with all divisions contributing.

Thomas Allen George: Major elements include improving store profitability through occupancy cost reduction, selling salary, productivity, and other store cost savings. We are also executing initiatives to optimize our inventory, our marketing spend, warehouse freight logistics costs, and other procurement efficiencies. We opened one store and closed 21, ending the quarter with 1,321 total stores. With respect to Journey Store closures, we closed 17 stores in the first quarter, primarily mall-based locations.

Speaker Change: Major elements include improving store profitability through occupancy cost reductions selling seller productivity and other store cost savings.

Speaker Change: We're also executing initiatives to optimize our inventory, our marketing spend warehouse freight and logistics costs and the other procurement efficiencies.

We opened one store and closed 21, ending the quarter with 1321 total stores with respect to journey store closures, we closed 17 stores in the first quarter.

Speaker Change: Primarily mall based locations.

Thomas Allen George: We continue to evaluate up to 50 potential store closures in total this year. The savings from these closures will eliminate approximately $14 million of annualized costs from SG&A Expense, which is in addition to the roughly $25 million of annualized savings from the stores we closed in fiscal 24 and the 45 to 50 million of run rate savings we are targeting for this year. Our objective with these cost-saving measures and strategic store closures is to optimize our financial performance and achieve greater profitability even on more moderate sales growth.

Speaker Change: We continue to evaluate up to 50 potential journeys closures in total this year.

Speaker Change: The savings from these closures will eliminate approximately $14 million of annualized costs from.

Speaker Change: From SG&A expense, which is which is in addition to the roughly $25 million of annualized savings from the stores we close.

Speaker Change: Fiscal 'twenty, four and a $45 million to $50 million of run rate savings we are targeting for this year.

Speaker Change: Our objective with these cost savings measures and strategic store closures is to optimize our financial performance and.

Speaker Change: And achieve greater profitability, even on more moderate sales growth.

Thomas Allen George: Now turning to guidance. Although we exceeded our bottom line expectations for Q1, the operating environment remains uncertain. As such, we are reiterating our full year earnings per share guidance of $0.60 to $1 per share. To give you more color, let me start with some specifics around Q2.

Speaker Change: Now turning to guidance.

Speaker Change: Although we exceeded our bottom line expectations for Q1, the operating environment remains uncertain.

Speaker Change: As such we are reiterating our full year earnings per share guidance of 60 to $1 per share.

Speaker Change: To give you more color, let me start with some specifics around Q2.

Thomas Allen George: While we are optimistic about the new product receipts that will hit Journey stores towards the end of the quarter, ongoing declines in the vulcanized category continue to pressure our top line in Q2. Additionally, we are maintaining a more conservative view on SHU and J&M, as they both continue their anniversary robust multi-year comparisons and expect lower Genesco brand sales. In all, we expect a low single-digit sales decline versus last year, with comps similar to Q1, but total sales benefiting from a week of back-to-school that shifts into Q2.

Speaker Change: While we are optimistic about the new product receipts that will hit journeys stores towards the end of the quarter ongoing declines in the Vulcanize category continue to pressure our top line in Q2.

Speaker Change: Additionally, we are maintaining a more conservative view on Hu and Jane M. As they both continue to anniversary robust multiyear compares and expect lower Genesco brand sales in all we expect a low single digit sales decline versus last year with comps similar to.

Speaker Change: Q1, with total sales benefiting from a week of back to school that shifts into Q2.

Thomas Allen George: Regarding Q2 gross margins, we expect an overall gross margin decrease of approximately 20 to 30 basis points, mostly due to product makeshifts that ensue. In addition, the sales decline in our largely fixed cost base will result in SG&AD leverage of roughly 80 to 100 basis points, leading to an EPS loss in the neighborhood of $0.30 more than we lost in Q2 last year.

Speaker Change: Regarding Q2 gross margins, we expect an overall gross margin decrease of approximately 20 to 30 basis points.

Speaker Change: Mostly due to product mix shift at journeys and Schuh. In addition sales decline in our largely fixed cost base will result in SG&A deleverage of roughly 80 to 100 basis points.

Speaker Change: Leading to an EPS loss in the neighborhood of 30 more than we lost in Q2 last year.

Thomas Allen George: Looking to the full year, we remain confident that our turnaround strategy at Journeys can begin to drive meaningful improvements in the back half, as the peak back-to-school and holiday selling periods enable us to generate profitability and positive earnings. That said, given the ongoing uncertainty in the consumer and macro environments, particularly during the lulls between peak shopping periods. We believe it's prudent to maintain a conservative view throughout Fiscal 25, with improvements in the latter part of the year setting the stage for more significant growth in fiscal 26. Taking this all into account, we continue to expect fiscal 25 total sales to decrease 2% to 3% or down 1% to 2% when excluding the 53rd week last year.

Speaker Change: Looking to the full year, we remain confident that our turnaround strategy at journeys can begin to drive meaningful improvements in the back half.

Speaker Change: As the peak back to school and holiday selling periods.

Speaker Change: Enable us to generate profitability and positive earnings.

Speaker Change: Given the ongoing uncertainty in.

Speaker Change: In the consumer and macro environments, particularly during the walls between peak shopping periods.

Speaker Change: We believe it's prudent to maintain a conservative view throughout fiscal 'twenty five.

Speaker Change: With improvements in the latter part of the year setting the stage for more significant growth in fiscal 'twenty six.

Speaker Change: Taking this all into account we continue to expect fiscal 'twenty five total sales.

Speaker Change: <unk> decreased 2% to 3% were down 1% to 2% when excluding the 50 <unk> week last year the variance between the high and low end of the range is primarily due to uncertainty in the consumer and macro environments. We continue to expect gross margin rates to be flat.

Thomas Allen George: The variance between the high and low end of the range is primarily due to uncertainty in the consumer and macro environment. We continue to expect gross margin rates to be flat to up 10 basis points for the year, with improvement at SHU mitigating some product and channel mix pressure at Journey. As a percentage of sales, we now expect adjusted SG&A in the range of flat to deleverage of 20 basis points, versus a range of flat 2D leverage of 30 basis points prior, with the cost reduction efforts I described earlier and the other actions working to partially offset the leverage on Fixed Expenses.

Speaker Change: To up 10 basis points for the year with improvement at shoe mitigating some product and channel mix pressure.

Speaker Change: At journeys.

Speaker Change: As a percentage of sales we now expect adjusted SG&A in the range of flat to deleverage of 20 basis points.

Speaker Change: Versus the range of flat to deleverage of 30 basis points prior.

Speaker Change: With the cost reduction efforts I described earlier and the other actions working to partially offset deleverage.

Speaker Change: On fixed expenses.

Thomas Allen George: All of these inputs result in an operating margin that is in the range of Fiscal 24's operating margin. Our guidance assumes no additional share repurchases, which results in fiscal 25 average shares outstanding of approximately $11.2 million, and we expect the tax rate to be approximately 26%.

Speaker Change: All of these inputs result in an operating margin that is in the range of fiscal 'twenty four is operating margin or.

Speaker Change: Our guidance assumes no additional share repurchases.

Speaker Change: This results in fiscal 'twenty, five average shares outstanding of approximately $11 2 million and we expect the tax rate to be approximately 26%.

Thomas Allen George: In summary, we are encouraged by the progress we have made to improve Journeys and optimistic that the additional steps we are now taking will position the business for stronger growth and success. Furthermore, we are confident that the initiatives we're taking across all our businesses will help us more fully unlock our longer-term earnings potential. Operator, please open the call for questions. Thank you. At this time, we will be conducting a question and answer session.

Speaker Change: Summary, we are encouraged by the progress we've made to improve journeys and optimistic that additional steps. We are now taking will position the business for stronger growth and success. Further we are confident that the initiatives, we're taking across all our businesses will help us more fully unlock our longer term.

Speaker Change: <unk> earnings potential.

Speaker Change: Operator, please open the call for questions.

Thomas Allen George: If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate your line is in the question. You may press star 2 if you'd like to remove your question from the... For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.

You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: Our first question comes from the line of... with Seaport Research, please proceed with your, Yes, thanks for taking my questions. I've got about a handful. I want to start with a couple questions around the guidance and then maybe work my way up to a little bit bigger picture on the strategy. I am curious... So for 2Q, Tom, you said comp, similar to OneCue, and I'm specifically thinking about the journeys business. The comp was down 5 and 1 q, so basically down 5 and 2 q.

Speaker Change: Our first question comes from the line of Mitch <unk> with Seaport Research. Please proceed with your question.

Mitch <unk>: Yes, thanks for taking my questions.

Mitch <unk>: Talking about a handful I want to start with a couple of questions around the guidance.

Mitch <unk>: My worry a little bit bigger picture on the strategy.

Speaker Change: Im curious.

Speaker Change: So for QQ, Tom you said comps.

Speaker Change: Similar to one.

Speaker Change: Specifically thinking about the journeys business.

Speaker Change: The comp was down five in <unk>. So we are down 5% in Q2 I know the guide.

Operator: I know the guy... for the full year on sales, it's a mid-single-digit decline. You're closing stores. Can you talk a little bit about, given the progress that you expect to make in the back half with Journeys, how you expect Journeys to comp in the back half? Do you think you can get to a positive comp by maybe the fourth quarter?

Speaker Change: Our journey for the full year on sales as a mid single digit decline Youre closing stores can you talk a little bit about.

Speaker Change: Given the progress that you expect to make in the back half with journeys, how you expect Germany to comp in the back half do you think you can get to a positive comp by maybe the fourth quarter can you just maybe speak to that a little bit.

Mitchel John Kummetz: Can you maybe speak to that a little bit? Yeah, good, good question, Mitch. On the second quarter, I want to comment a little bit on that, you know, we think it's appropriate to be more cautious in the second quarter, given the pressures we're seeing with the vulcanized business on journeys and some of the pressures we're seeing in the shoe business. And hoping to get to a positive comp in the third quarter, but that could be challenging. But for the fourth quarter, we do feel that we're gonna have a positive comp, albeit small, in the fourth quarter. Okay, that's very helpful.

Speaker Change: Yes, good good question Mitch.

Speaker Change: On the second quarter, I want to comment a little bit a little bit on that.

Speaker Change: Well.

Speaker Change: We think it's appropriate to be more cautious with the second quarter given the pressures, we're seeing with the balkanized business on journeys and some of the pressures we're seeing in the shoe business and the Johnston <unk> Murphy business. So we think it's appropriate to make a more cautious view in the back half with journeys we do.

Speaker Change: Deal that.

Speaker Change: The third quarter Theres still could be some challenges there again, it's a little bit of a leaky bucket kind of concept.

Volcanize will be under pressure, but we feel we've got a substantial amount of new relevant product coming in to be able to mitigate that but we are taking a cautious view on the comp there and hoping to get to a positive comp in the third quarter, but there could be challenging but the fourth quarter. We do feel that we're going to have a positive, albeit.

Speaker Change: It's small in the fourth quarter.

Speaker Change: Okay, that's very helpful.

Thomas Allen George: And then on the Marg, you guys definitely beat plan on margins in the first quarter. I think you made a slight change to your SG&A assumption for the full year. But I guess I'm a little surprised maybe you're not being more optimistic on margins in terms of the full year guidance based on kind of the outperformance in the first quarter. Can you maybe speak to why that is?

Speaker Change: And then on margin.

Speaker Change: You guys.

Speaker Change: Definitely plan on margins in the first quarter.

Speaker Change: You made a slight change to your SG&A assumption for the full year.

Speaker Change: Yes, I'm, a little surprised maybe you're not being more optimistic on margins in terms of the full year guidance based on kind of the outperformance in the first quarter can you maybe speak to why that is I don't know if there were any maybe SG&A shifts.

Mitchel John Kummetz: I don't know if there were any maybe SG&A shifts out of 1Q into 2Q, but you talked about some of the conservatism around relative to the 1Q outperformance. Mitch, thanks for your question. It's Mimi.

Speaker Change: <unk> into Q2, but maybe.

Speaker Change: Have you talked about some of the conservatism around margin relative to the <unk> outperformance.

Mimi Eckel Vaughn: And I'll hand it over to Tom in a minute. But what we saw in the first quarter, and this was very positive for our business, was a lower, a lower amount of markdowns than we believed we needed to take. And I think that's a real testament to how clean our inventory is and how well we have been managing inventory. We are looking at some mixed shifts where we are seeing a shift in mix of overall product that will put some pressure on gross margin.

Speaker Change: Mitch Thanks for your question, It's me and I'll hand, it over to Tom in a minute, but what we saw in the first quarter and we were.

Thomas Allen George: That was very positive for our business is a.

Thomas Allen George: Lower a lower amount of markdowns than than we believed we needed to take and I think thats, a real testament to the how clean our inventory is and how well we have been managed managing inventory. We are looking at some mix shift where we are.

Thomas Allen George: King.

Thomas Allen George: A shift in mix.

Thomas Allen George: Overall our product.

Thomas Allen George: That will put some pressure on gross margin and so that's what where we are looking at however, it is a real positive story with higher average selling prices and so as we see a shift out of balkanized product into into.

Mimi Eckel Vaughn: And so that's what we're looking at. However, it is a real positive story with higher average selling prices. And so as we see a shift out of vulcanized product into the assortment and diversified ranges of products and brands that we've been talking about, then we see a pickup in ASPs. And so it's a positive, positive gross margin story for the year. And then for SG&A expenses, I think there are a few puts and takes that put us more in the neighborhood of where we'd end up being.

Thomas Allen George: And to the assortment and diversified ranges of products and brands that we've been talking about then we see a pick up in Asps and so it's a positive positive gross margin story.

Thomas Allen George: For the year and then for SG&A expenses I think there are a few puts and takes that.

Thomas Allen George: Put us more in the neighborhood of where where we'd end up being the end with the traction we're getting with the cost savings programs and continuing with the store closures, we actually improve the SG&A deleverage guidance, some and then back to the mean.

Thomas Allen George: Yeah, in the end, with the traction we're getting with the cost savings programs and continuing to with the store closures, we actually improved the SG&A due to leverage guidance. And then back to the... Mimi's comments on the margin were dead on, and that shift from Vulcanize to other products had an impact on the shoe business as well. So that's the Journeys and Shoe Impact. So we thought we, that first quarter was, It's not just for us, but, generally speaking, for the entire industry. So I will just sort of wait and see how the next few months go.

Jamie: Jamie's comments on the margin they were dead on that shift from Balkanize to other product.

Jamie: There is an impact on the shoe business as well.

Jamie: So thats the journeys and schuh impacts so we thought that.

First quarter was.

While we outperformed there were lower margins again, a testament to our inventory management.

Jamie: But that said, we think it's best to be more cautious there going forward.

Jamie: And then generally speaking the wholesale business, which Johnston <unk> Murphy has a wholesale business and our Genesco brands group, we wanted to take a more cautious view.

Jamie: At Skus me on that going forward as well.

Jamie: Because the wholesale accounts.

Jamie: Getting feedback to us not just for us, but generally speaking for the entire industry is sort of wait and see how the next few months ago, then there'll be.

Mitchel John Kummetz: Then they'll be in a better position to evaluate their reorder rate. And then, um... On the assortment pivot at Journey, it sounds like you're making progress already, and I can appreciate that there are long lead times for these things and that it takes a while for the new leadership to really have an impact, but is there any way to sort of quantify that? How much turnover you're seeing in the assortment, like, you know, by the time that you get to the back half.

Jamie: In a better position to evaluate.

Jamie: Reorder rates.

Jamie: And then.

Jamie: On the assortment.

Speaker Change: Germany sounds like Youre, making progress already.

Speaker Change: And I can appreciate that there are long lead times to these things and that it takes a while for the new leadership, we're really have an impact but is there any way.

Speaker Change: Just sort of quantify how.

Speaker Change: How much turnover, you're seeing in the assortment right.

Speaker Change: By the time that you get to the back half.

Mitchel John Kummetz: Is it going to be, you know, 50% different than what it was a year ago? And like, once you sort of achieve the full pivot, is there any way to, again, kind of quantify how much has changed through that process?

Speaker Change: Is it going to be.

Speaker Change: 50% different than what it was a year ago.

Speaker Change: And once you've sort of achieved the full pivot is there any way again.

Speaker Change: Quantifying how much has changed.

Speaker Change: Through that process I don't know if thats, a fair question, but I'm, just trying to better understand kind of how that moves along.

Mimi Eckel Vaughn: I don't know if that's a fair question, but I'm just trying to better understand kind of how that moves along and how different things are going to be when you're at the point where you know you're happy with the changes you've made. Mitch, you have your perspective exactly right on what's going on and some of the lead times that we need. We are very excited to have Andy Gray on board, and his perspective as a merchant and his commercial perspective and brand relationships are just great additions to our strong team here.

Speaker Change: How different things are going to be when you're at the point, where you're happy with the changes you've made.

Speaker Change: <unk> got a year perspective is exactly right on what's going on in some of the lead times that we need we are very excited to have Andy Gray on board and his perspective, as a merchant and as commercial perspective and brand relationships are.

Speaker Change: Are just great additions to our <unk>, our strong team here and so we see fashion broadening and we see teams embracing more wearing occasions and this is in both fashion athletic and casual which we can serve both sides of the market and it's in.

Mimi Eckel Vaughn: And so we see fashion broadening, and we see teens embracing more wearing occasions, and this is in both fashion, athletic, and casual, which we can serve both sides of the market. And it's an opportunity to fill our customers' closets with things they didn't have before. And so our team has been pretty narrow, focused on vulcanized product on a couple of major brands.

Speaker Change: The opportunity to fill our customers' closets with things they didn't have before and so our team has been pretty narrow.

Speaker Change: Just on Vulcanize product on a couple of major brands and so we're well positioned to take advantage of this move and Union you know us over the years that we just continue to evolve our fashion to where the team is going there is also an interested in interest in apparel, which is really positive to see and teen apparel.

Mimi Eckel Vaughn: And so we're well positioned to take advantage of this move. And you know we have just continued to evolve our fashion to where the teen is going. There's also an interest in apparel, which is really positive to see in teen apparel. And there's a greater appetite for newness and freshness. And so you will see that there is a pretty significant change in our assortment, and there are lots of brands that we're building into.

Speaker Change: And there's a greater appetite for newness and freshness and a lot of times footwear follows into.

Speaker Change: Apparel and so we have been moving into the assortment that we know will drive our business. We got some good reads in in the first quarter by pulling forward some of our product and really.

Speaker Change: Being able to amplify the assortments during our peak periods and that bodes well for the back half and so you will see that there is a pretty significant change in our assortment and its lots of brands that we are building into it's not just one or two that we are excited about and so there should be some pretty significant change in our assortment Christina.

Mimi Eckel Vaughn: It's not just one or two that we are excited about, and so there should be some pretty significant changes in our assortment. Chris Santella, our new chief merchant at Journeys, and the team have seriously hustled to make major improvements in the back half. And again, we've been encouraged by the consumer reaction to those product changes so far. And then maybe just as a quick follow-up to that, before I get into some bigger picture stuff, you mentioned vulcanized rubber a number of times, and you're sort of overexposing yourself to vulcanized rubber historically. Again, is there any way to kind of quantify how that's shifting?

Speaker Change: Taylor our new.

Speaker Change: Chief merchant at journeys and the team have seriously hustle to make major improvements in the back half and again, we've been encouraged by the consumer reaction to those product changes so far.

Mitchel John Kummetz: Like, is it is, you know, bulk, you know, I don't know, 30, 40% of your business today, and one, get to the back half, it's, you know, 20% and then once all this is kind of completed, it's down to 10, like, is there any sort of thing that we can be looking at there? Just to get some perspective, just to get some perspective on that, Mitch, we have been known as a destination for some of that vulcanized product.

Speaker Change: And then maybe just as a quick follow up to that before I get into some bigger picture stuff you mentioned balkanized a number of times.

Speaker Change: And youre sort of overexposure to Balkanized. Historically again is there any way to kind of quantify how is that shifting.

Speaker Change: Bulk.

Speaker Change: I don't know, 30%, 40% of your business today, and once we get to the back half, but 20% and then once all of this is kind of completed its down to town like is there any any sort of thing that we can be looking out there.

Speaker Change: Yes, just again some perspective just to give some perspective on that Mitch.

Speaker Change #100: We have been known as a destination for some of that <unk> product.

Mitchel John Kummetz: And the consumer has really gravitated toward that over the past several years. It was a mix of lower price point products and just really, really versatile. And so we typically go through these fashion shifts where the consumer finds something new, and we provide something new to them. And so you will see that vulcanized will be a materially smaller part of our mix, but it's not going away.

Speaker Change #100: The consumer has really gravitated toward that over the past several years. It was a mix of of lower price point product and just really versatile and so we have we typically go through these fashion shifts where the consumer find something new and we provide something new to them.

Mimi Eckel Vaughn: There's certainly still interest in vulcanized products. Lots of other brands, lots of other brands that offer sandals, lots of other brands on the athletic side of the world are gaining lots of interest and lots of traction. This is positive because, for a while, our consumer was just really not motivated to buy anything. I think some of the innovation that didn't take place during the pandemic is now being caught up with, and we're excited about what we're seeing. And then Mimi, in your prepared remarks talking about some of the strategies and journeys, you mentioned the importance of segmentation and differentiation.

Speaker Change #100: So you will see that vulcanize will be a materially smaller part of our mix, but it's not going away. There is certainly still interest in balkanized products that lots of other.

Speaker Change #100: Brands lots of other brands that offer sandals lots of other brands in the athletic side of the world are gaining lots of interest and lots of lots of traction. This is a positive because for a while our consumer was just really not not motivated to buy anything I think some of the innovation.

Speaker Change #100: In that that didn't take place during the pandemic our brands are catching up on and we're excited about what we're seeing.

Speaker Change #101: And then in your prepared remarks talking about some of the strategies at journeys.

Speaker Change #102: You mentioned the importance of segmentation and differentiation can you talk a little bit about more little more about what that means for that business I don't know if youre, referring to exclusives or can you just sort of big picture.

Mitchel John Kummetz: Can you talk a little bit more about what that means for that business? I don't know if you're referring to exclusives or can you just sort of give the big picture, you know, where do you see journeys going in terms of the segmentation sort of differentiating itself from some of the competition? Mitch, thanks for that question.

Speaker Change #102: Where do you see journeys going in terms of in terms of the segmentation sort of different differentiating itself from some of the competition.

Mimi Eckel Vaughn: So reinvigorating the product in the near term is the near-term goal to start building the momentum that we need. But at the same time, we are taking a look at, you know, more specifically who our consumer is. And what's been distinctive about Journeys is that we provide a place that the team can go for both their fashion athletic and their casual assortment.

Mitch <unk>: Mitch Thanks for that question, so reinvigorating the product in the near term is the near term goal to start building the momentum that we need but at the same time, we are taking a look at more specifically at who our consumer is and what's been been distinctive about journey.

Speaker Change #102: Is is that we.

Speaker Change #102: We provide a place that the team can go by both their fashion athletic and their casual assortment. So we're so much more lifestyle positioned and we'd carved out an important place in.

Mimi Eckel Vaughn: So we're so much more lifestyle oriented, and we've carved out an important place in the competitive set that is focused more on girls, focused more on that teen girl, which is a really important consumer that our brands want to serve. And also, you know, focused not just on the athletic part of the market, which many of our competition does quite well. And so we've got a unique place within the environment and a unique place within the mall.

Speaker Change #102: In the competitive set that is focused more on girls focus more on that teen girl, which is a really important consumer that they are brands want to serve and also.

Speaker Change #102: Focused not just on the athletic part of the market, which many of our competition does quite well and so we've got a unique place within the within the environment any unique placed within the mall.

Speaker Change #102: This unique value proposition positions us as a fashion authority to come back into serve our consumers and so when we think about our different consumer segments, all teens arent alike.

Mimi Eckel Vaughn: This unique value proposition positions us as a fashion authority to come back and serve our consumers. And so when we think about our different consumer segments, all teens aren't alike. Some tend to wear a more diversified assortment. Some tend to like athletic more.

Speaker Change #102: Tend to wear and more diversified assortment some tend to like athletic more some are fashion leaders that are ahead of the game and some are fashion followers and so by being able to work all of the.

Mimi Eckel Vaughn: Some are fashion leaders. They're ahead of the game. And some are fashion followers.

Mimi Eckel Vaughn: And so by being able to work all of the great investments that we have made in CRM and data, and understanding our consumer, we're able to leverage that into more specific marketing around the diversification that we provide in our product line. And so we are excited about that end-to-end strategy of thinking about our consumer segments, providing products that are relevant for the different segments, and then marketing to those specific segments. And that's what's underway right now.

Speaker Change #102: Great investments that we have made against CRM and against data and against understanding our consumer we're able to leverage that into more specific marketing around the diversification that we provide in our product line and so we are excited about that end to end strategy.

Speaker Change #102: Thinking about our consumer segments, providing product that is relevant for the different segments, and then marketing to those specific segments and that's what's underway right now.

Mitchel John Kummetz: You started to answer my last question, because my last question has to do with loyalty and analytics. So I think you said there are two and a half million members in the Journey loyalty program. Can you talk about how that's building? And because it's a relatively new program for journeys? And again, if there are any sort of takeaways from SHU that you think could be applied to journeys and when will the analytics really kick in to where you can do better, you know, targeted marketing and all of those fun things at Journey. So Mitch, the All Access program, which is the Journey program, you can go ahead and sign up online.

Speaker Change #103: You started to answer my last question. My last question has to do with loyalty.

Speaker Change #104: Analytics. So I think you said $2 5 million members in the in the journeys loyalty program can you talk about how that's building.

Speaker Change #105: And because it's a relatively new program for journeys and again, if there are any sort of takeaways from shoe that you think could be applied to journeys and when will the analytics really kick in it to where you can do better.

Speaker Change #105: Targeted marketing and all of those things at journeys.

Mimi Eckel Vaughn: If you haven't already, we fully launched that in our stores last July. So it hasn't even been a year, and we have had two and a half million members sign up. And the success we've had with SHU has been because that program has been a couple of years in the running.

Mitch <unk>: So Mitch.

All access program, which is the journeys program you can go ahead and sign up online. If you haven't already we fully launched that in our stores last July so it hasnt, even been a year and we have had two 5 million members sign up.

Mitch <unk>: And the success, we've had with Schuh has been because that program has been a couple of years in the running the journeys customer trusts us a lot theyre excited to hear from us and so that's a real measure of how quickly we've been able to sign people up you can get a welcome gift you can get nice perks like free shipping.

Mimi Eckel Vaughn: The journeys customer trusts us a lot. They're excited to hear from us. And so that's a real measure of how quickly we've been able to sign people up. You can get a welcome gift. You can get nice perks like free shipping. You can earn points.

Mimi Eckel Vaughn: But what is most compelling is that we are seeing that the spend is greater because the frequency is greater with people who have joined our loyalty program. And that really is the biggest benefit. And so, our loyalty program is hooked to our CRM program, and we've built a data analytics capability that goes along with this. And so, understanding our customers as well in the digital world as we have traditionally done in the physical world will give us a chance to engage with our customers more frequently to drive higher customer lifetime value.

Mitch <unk>: Can earn points, but what is most compelling is that we are seeing that the spend is.

Mitch <unk>: Is is greater with and because the frequency is greater with people who have joined our loyalty program and that really is the biggest benefit and so our loyalty program is hub to our CRM program and we built a data analytics capability that goes along with this.

Mitch <unk>: So understanding our customers as well in the digital world as we have traditionally done in the physical world will give us a chance to engage with our customers more frequently to drive drive higher customer lifetime value. We're already seeing some of those benefits at schuh, where we are a bit ahead of this and so it's in <unk>.

Mimi Eckel Vaughn: We're already seeing some of those benefits at SHU, where we are a bit ahead of this. And so it's an important part of how we'll be able to serve our customers better going forward and also engage with our customers. Great. Thanks, guys, and good luck. Thanks for your questions, Mitch.

Mitch <unk>: <unk> Park.

Mitch <unk>: We will be able to conserve.

Mitch <unk>: We will be able to serve our consumer better going forward and also engage with our customers.

Speaker Change #106: Great. Thanks, guys and good luck.

Speaker Change #107: Thanks for your question.

Speaker Change #108: Thank you. Our next question comes from the line of Montero Marino cheek with Jefferies. Please proceed with your question.

Operator: Thank you. Our next question comes from the line of Montero Moreno-Cheek with Jeffreys. Hello, and thank you for taking my call. I guess my first question would be about your new Johnson & Murphy marketing campaign; can you talk about any of the early reads there? And then is the program like helping attract some younger customers? I'm glad you've seen that new campaign. We're pleased with that new campaign, and it is centered around leveraging the great heritage of the Johnson & Murphy brand. There are not a lot of 175-year-old brands out there, but with a really modern twist.

Hello, and thank you for taking my call.

This is my first question would be.

Speaker Change #109: On your new Johnston <unk> Murphy marketing campaign can you talk about any of the early read there.

Speaker Change #109: The program like helping attracting some younger customers.

Speaker Change #110: I'm glad you're seeing that the new campaign, we're pleased with that that new campaign and it is <unk>.

Speaker Change #110: Third around <unk>.

Speaker Change #110: Leveraging the great heritage of the Johnston <unk> Murphy brand, it's not a lot of 175 year old brands out there, but with a really modern twist and so we have gotten good feedback that that.

Montero Moreno-Cheek: And so we have gotten good feedback that all of that campaign has been in the market for a little over a month, and it speaks to both of those things, how much evolution we've made over time. And we are pleased with the results in Johnson & Murphy since the pandemic. It's one of the most exciting areas and opportunities of growth for us. The pandemic gave us a chance to pivot harder into casual and comfortable products. It's a really terrific product that has great styling but has a lot of proprietary technology.

Speaker Change #110: All of that campaign has been in the market for a little over a month and.

Speaker Change #110: It speaks to both of those things how much evolution. We've made over time and we are pleased with the results in Johnston <unk> Murphy since the pandemic hits one of the most exciting areas and opportunities of growth for us the pandemic gave us a chance to pivot harder into casual and comfortable product, it's really terrific product.

Speaker Change #110: And that has great styling, but has a lot of proprietary technology and the technology is what's been revolutionizing, our offering and so we've been investing in product, it's a chance to sell consumers more hybrid product we've been known for dress product, but this is this.

Mimi Eckel Vaughn: And the technology is what's revolutionizing our offering, and so we've been investing in product. It's a chance to sell consumers more hybrid product. We've been known for dress shoes, but this is dressier uppers on very comfortable bottoms.

Speaker Change #110: This is dressier uppers on very comfortable bottoms.

Mimi Eckel Vaughn: The reality is that our brand awareness for Johnson & Murphy is on the lower side versus peers, and so it's product first to get the product to be a really special product. And then this marketing campaign that we have been wrapping around the product is to build awareness in the repositioning that we've done for the brand. We are getting younger.

Speaker Change #110: Reality is that our brand awareness for Johnston <unk> Murphy is on the lower side versus peers and so it's product first to get the product to be really special product and then this marketing campaign that we have been wrapping around the product is to build awareness in the repositioning that we've done.

For the brand.

Mimi Eckel Vaughn: We are attracting younger customers into the brand, and we see a lot of opportunity. We've added a number of different categories to Johnson & Murphy, such as apparel and accessories, and have been growing those. And so it's a real lifestyle brand that our consumers have been telling us that they like buying us across lots of categories. And so we're going to reach a wider audience to tell J&M's story and educate the consumer and appeal to a younger cohort at the same time that we are retaining the customers that we've been able to traditionally serve.

Speaker Change #110: We are getting younger we are attracting younger customers into the brand and we see a lot of opportunity. We've added in a number of different categories to Johnston <unk> Murphy against apparel and accessories and had been growing those and so it's a real lifestyle brand that our consumers have been telling us that they like buying us across.

Speaker Change #110: <unk> lots of categories and so we're going to reach a wider audience to tell Jane M story, and educate the consumer and appeal to a younger.

Speaker Change #110: Cohort at the same time that we are retaining the customers that we've been able just traditionally served.

Okay.

Mimi Eckel Vaughn: Thank you. And then on, I know it was touched on, but is there anything else to add on the strategic initiatives and journeys and just how they position the brand in the longer term? Sure. So, you know, I've talked about the product initiatives quite a bit and talked about some of the customer segmentation. But there are a number of other elements around the Journeys plan.

Speaker Change #111: Thank you and then on I know, we've touched on but.

Speaker Change #112: To add on the.

Speaker Change #112: Strategic initiatives at journeys and <unk> Hao.

Speaker Change #112: <unk>.

Speaker Change #112: Brands in the longer term.

Speaker Change #113: Sure so.

Speaker Change #114: <unk> talked about the product initiatives quite a bit and.

Speaker Change #113: <unk>.

Speaker Change #113: Talked about some of the customer segmentation there are a number of other elements around that journeys plan and importantly, it's building and promoting journeys as a leading retail brand and we are we are improving our brand presence in our stores and online.

Mimi Eckel Vaughn: And importantly, it's building and promoting Journeys as a leading retail brand. We are improving our brand presence in our stores and online and on social. And digital is an important part of this as well, and we've had great success growing our digital business. There's a real opportunity here. Shoe is at 40 percent. Journeys is at less than half of that.

Speaker Change #113: And on social and.

Speaker Change #113: <unk> digital is an important part of this as well and we've had great success growing our digital business. There's a real opportunity here shoe is at 40% journeys is at less than half of that and so there is a visual theres a visual refresh at the website that we have lined up.

Mimi Eckel Vaughn: And so there's a visual refresh of the website that we have lined up and our all-access program as well. And so when we think about building the Journeys brand, it is about just calling attention to Journeys as a great retail brand in addition to the brands that we sell. We've got a creative agency on board that is crafting that story that we will reveal later this year.

Speaker Change #113: And our all access program as well and so when we think about building. The journeys brand. It is about just calling attention to journeys as a great retail brand. In addition to the brands that we sell we've got a creative agency onboard that is crafting that story that we will reveal later this year.

Mimi Eckel Vaughn: As I said, it's improving our brand presence. It's really using all of the aspects of digital and all of the great work that we've done with CRM and data analytics. In addition to that, I talked about just leveraging our people. Stores are an important part of our customer journey. And in today's retail world, service can be a real differentiator. And so our people in our stores are great ambassadors for our brand. They are very into fashion. They love telling fashion stories.

Speaker Change #113: As I said, it's improving our brand presence, it's really using all of the aspects of digital and all of the great work that we've done with CRM and data analytics. In addition to that.

Speaker Change #115: <unk> talked about just leveraging our people stores are an important part of our customer journey and in today's retail World service can be a real differentiator and so our people and our stores are great ambassadors for our brand they are very into fashion. They love, telling the fashion stories and so we are thinking of ways that we.

Mimi Eckel Vaughn: And so we are thinking of ways that we can engage them around the great changes that we're making on the product side and also on the storytelling side. And then, I guess the last one for me: anything worth noting on add-on purchases? Sure. So, you know, I think the biggest thing to call out is that what we have been seeing is higher average selling prices, and higher average selling prices are a really positive thing. And so that is translating into higher ticket prices and higher ticket averages.

Speaker Change #115: Engage them around the great changes that were made making on the product side and also on the storytelling side.

Speaker Change #116: And then I guess last one for me anything worth noting on add on purchases.

Speaker Change #117: Sure. So I think the biggest thing to call out is that what we have been seeing as we have been seeing.

Speaker Change #118: Higher average selling prices and the higher average selling prices are a really positive thing and so that is translating into higher ticket prices higher ticket averages and that's been a positive thing where we have put a lot of focus on add on sales is that we launched.

Speaker Change #118: Buy online pickup in store last year, and it's a good opportunity we're seeing at 10 plus percent rate.

Of our online sales moving to <unk> and we're focusing a lot on attachment when the customer comes into the store, it's an opportunity to to put some add on sales there and as the customers trying on their shoes. What we have found is that we are quite successful at being able to sell them. Another pair of shoes and so that's that's been an area of.

Mimi Eckel Vaughn: And that's been a positive thing. It's an opportunity to make some add-on sales there. And as the customer is trying on their shoes, what we have found is that we're quite successful at being able to sell them another pair of shoes. And so that's been an area of attention.

Mimi Eckel Vaughn: Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Ms. Vaughn for any final comments. Thank you for joining us. We are looking forward to you joining us for our second quarter earnings call. Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Speaker Change #118: Attention.

Speaker Change #119: Thank you.

Speaker Change #119: Thank you.

Speaker Change #120: Ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. <unk> for any final comments.

Speaker Change #121: Thank you for joining us where we are looking forward to you joining us for our second quarter earnings call.

Speaker Change #122: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.