Q2 2025 Genesco Inc Earnings Call

September 6, 2024

Good day everyone and welcome to the Janesco second quarter fiscal 2025 conference call. Just your reminder today's call is being recorded. I'll now turn the call over to Darryl Macquarrie, Senior Director of FPNA. Please go ahead sir.

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

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

Darryl MacQuarrie: Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal 25 results. Participants on the call expect to make four 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. 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.

Speaker Change: Good morning everyone and thank you for joining us to discuss our second quarter fiscal 25 results.

Speaker Change: Our tispens on the call expect to make forward-looking statements reflecting our expectations as of today. But actual results could be different.

Speaker Change: Janesco refers to this morning's earnings release and the company's SEC filings, including its most recent 10K and 10K 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-gap financial measures are reconciled to their gap 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.

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

Darryl MacQuarrie: With me on the call today is Mimi Vaughn, Board Chair, President and Chief Executive Officer, and Tom George, Chief Financial Officer.

Speaker Change: With me on the call today is Mimi Vaughn, who we're chair, resident and chief executive officer.

Mimi Vaughn: Now I'd like to turn the call over to me. Thanks, Darryl. Good morning, everyone, and thank you for joining us. I'll start today with a review of the key drivers of our second quarter performance and provide an update on the strategic initiatives to drive growth at Journeys and elsewhere in our company. Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions. We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations. Sales exceeded the levels we anticipated, led by journeys, more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multiyear comparisons.

Speaker Change: and Tom George, Chief Financial Officer.

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

Mimi Vaughn: Thanks Darryl, good morning everyone, and thank you for joining us.

Mimi Vaughn: I'll start today with a review of the key drivers of our second quarter performance and provide an update on the Strategic Initiatives to drive growth at journeys and elsewhere in our company.

Toml: Toml review the financials and more detail and walk through our current outlook and then we'll be happy to take questions.

Toml: We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations.

Toml: Sales exceeded the levels we anticipated led by journeys, more than offsetting some pressure as shoe and Johnston and Murphy, which continue to face robust multi-year comparisons.

Mimi Vaughn: Our digital business was a standout of high single digits, and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expenses in what is one of our lower volume quarters. Our number one priority is and has been to improve performance at journeys. Step one of our plans centered around efforts to inject our product assortment with more newness, excitement, and storytelling to drive an inflection in journeys comps and deliver that to our consumers through enhanced store, digital, and social experiences. And as we anticipated, our Q2 results demonstrated solid progress against that plan.

Toml: Our digital business was a standout of high single digits and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expensive in what is one of our lower volume quarters.

Toml: Our number one priority is and has been to improve performance at journeys.

Toml: Step one of our plans centered around efforts to inject our product assortment with more newness, excitement and storytelling to drive an inflection in journey's comps and deliver that to our consumers through enhanced, stored digital and social experiences.

Toml: and as we anticipated, our Q2 results demonstrated solid progress against that plan.

Mimi Vaughn: Journeys assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July before the onset of back to school and accelerating into August. We saw a notable pick up in attention to footwear, marked by growth in traffic by our North American youth consumer as a quarter progressed. The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into Journey's proposition as the consummate curator of styles across both casual and fashion athletic brands. New Journey's leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back-to-school results.

Toml: Journey's assortment resonated well, driving strong sequential sales improvement with Comsturning Positive in July, before the onset of back to school, and accelerating into August.

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

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

Darryl MacQuarrie: I'll now turn the call over to Darryl MacQuarrie, Senior Director of FPNA. Please go ahead, sir. Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal 25 results.

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

Toml: We saw a notable pickup in attention to footwear marked by growth in traffic by our North American youth consumer as a quarter progressed.

Mimi Vaughn: Good morning, everyone, and thank you for joining us to discuss our second quarter fiscal 25 results. Participants on the call expect to make four 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. 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: Participants on the call expect to make four 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 10K and 10Q filings, for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today. Participants also expect to refer to certain adjusted financial measures during the call.

Toml: The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the files they're wearing.

Toml: This shift plays well into journey's proposition as the consummate curator of styles across both casual and fashion athletic brands.

Speaker Change: New Journey's leadership accomplished a lot in a short time to see the opportunity to meet these changing footwear preferences and deliver positive back to school results.

Darryl MacQuarrie: All non-GAP financial measures are reconciled to their GAP counterparts in the attachments to this morning's press release, and in schedules available on the company's website in the quarterly results section. We have also posted a presentation summarizing our results here as well.

Mimi Vaughn: With greater depth on brand and styles teens want, we expect to be well-positioned to similarly draw a demand for the important holiday season. We have more work to do to unlock Journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal. Nevertheless, we continue to navigate a choppy environment. Faced with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must-have product in Q2 and passing on others.

Speaker Change: With greater depth on brand and styles teens want, we expect to be well positioned to similarly drive demand for the important holiday season.

Mimi Vaughn: We have also posted a presentation summarizing our results here as well.

Speaker Change: We have more work to do to unlock journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal.

Darryl MacQuarrie: 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 me. Thanks, Darryl.

Darryl MacQuarrie: With me on the call today is Mimi Vaughn, Board Chair, President and Chief Executive Officer, and Tom George, Chief Financial Officer.

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

Mimi Vaughn: Thanks, Darryl.

Speaker Change: Nevertheless, we continue to navigate a choppy environment, faced with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must have producting Q2 and passing on others.

Mimi Vaughn: Good morning, everyone, and thank you for joining us. I'll start today with a review of the key drivers of our second quarter performance and provide an update on the strategic initiatives to drive growth at journeys and elsewhere in our company. Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions. We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations.

Mimi Vaughn: They again showed willingness to shop when there's a reason, like during 4th of July and back to school, and retreat when there's not. We expect these behaviors to carry on, particularly during non-peak shopping periods. As we demonstrated with the shoe and J&M coming through the pandemic, we have a solid record of managing well through adverse economic and fashion cycles, evolving with a customer to meet and exceed their changing footwear preferences and emerging stronger. We're committed and excited to do the same with journeys as we execute strategies to elevate the journey's product brand and consumer experience.

Mimi Vaughn: Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions. We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations. Sales exceeded the levels we anticipated, led by journeys, more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multiyear comparisons. Our digital business was a standout of high single digits, and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expenses in what is one of our lower volume quarters.

Speaker Change: They again showed willingness to shop when there's a reason, like during 4th of July and back to school and retreat when there's not. We expect these behaviors to carry on, particularly during non-peak shopping periods.

Speaker Change: As we demonstrated the shoe and J&M coming through the pandemic, we have a solid record of managing well through adverse economic and fashion cycles, evolving with a customer to meet and exceed their changing footwear preferences and emerging stronger.

Mimi Vaughn: Sales exceeded the levels we anticipated led by journeys more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multiyear comparisons. Our digital business was a standout of high single digits and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expenses in what is one of our lower volume quarters. Our number one priority is and has been to improve performance at journeys.

Speaker Change: We're committed and excited to do the same with journeys as we execute strategies to elevate the journey's product brand and consumer experience.

Mimi Vaughn: Driving positive journey's comps gives us considerable EPS upside, with the leverage in our model enhanced by our recent cost reduction and share repurchase actions.

Speaker Change: Driving positive journey's comps gives us considerable EPS upside with the leverage in our model, enhanced by our recent cost reduction and share repurchase actions.

Mimi Vaughn: Our number one priority is and has been to improve performance at journeys. Step one of our plans centered around efforts to inject our product assortment with more newness, excitement, and storytelling to drive an inflection in journeys comps and deliver that to our consumers through enhanced store, digital, and social experiences. And as we anticipated, our Q2 results demonstrated solid progress against that plan. Journeys assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July before the onset of back to school and accelerating into August. We saw a notable pick up in attention to footwear, marked by growth in traffic by our North American youth consumer as a quarter progressed.

Mimi Vaughn: Now for color on individual businesses, starting with journeys. During holiday at the end of last year, we faced increased pressure on journey's core assortment, including vulcanized product and boots. With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half of this year despite easier compares until we could deliver enough product to meaningfully impact the mix. Knowing our young customers' preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands.

Mimi Vaughn: Step one of our plans centered around efforts to inject our product assortment with more newness, excitement and storytelling to drive an inflection in journeys comps and deliver that to our consumers through enhanced store, digital and social experiences. And as we anticipated, our Q2 results demonstrated solid progress against that plan. Journeys assortment resonated well driving strong sequential sales improvement with comps turning positive in July before the onset of back to school and accelerating into August.

Speaker Change: Now for color on individual businesses starting with journeys.

Speaker Change: During holiday, at the end of last year, we faced increased pressure on Darryl's core assortment, including vulcanized product and boots.

Speaker Change: With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half this year despite easier compares until we could deliver enough product to meaningfully impact the mix.

Speaker Change: Knowing our young customers' preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took a aggressive and quick action and successfully added significant newness and freshness across several major brands.

Mimi Vaughn: We saw a notable pick up in attention to footwear marked by growth in traffic by our North American youth consumer as a quarter progressed. The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into Journey's proposition as the consummate curator of styles across both casual and fashion athletic brands. New Journey's leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back-to-school results.

Mimi Vaughn: Our key brand partners, very enthusiastic about journey's unique customer proposition, stepped up with tremendous support of our strategic direction to better serve this cohort through elevated assortments and depth. Following a more challenging May and June, receipt of this product in time to kick off a strong back to school drove positive comps in July and higher ASPs with solid results in early back to school markets and over tax-free holidays. The comp trend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back to school week. weeks.

Speaker Change: Our key brand partners, very enthusiastic about journey's unique customer proposition, stepped up with tremendous support of our strategic direction to better serve this cohort through elevated assortments and depth.

Mimi Vaughn: The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into Journey's proposition as the consummate curator of styles across both casual and fashion athletic brands. New Journey's leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back-to-school results. With greater depth on brand and styles teens want, we expect to be well-positioned to similarly draw a demand for the important holiday season. We have more work to do to unlock Journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal.

Speaker Change: Following a more challenging Mayan June, receipt of this product in time to kick off a strong back-to-school, drove positive, comcent July, and higher ASPs, with solid results in early back-to-school markets and over tax-free holidays.

Speaker Change: The Comptrend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back to school weeks.

Mimi Vaughn: Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that Journeys remains a key footwear destination. Journeys' digital business remains very healthy, posting another quarter of double-digit growth as our performance marketing, all-access loyalty incentives, CRM campaigns, and OmniChannel delivery options in tight shoppers to purchase online. Finally, Journeys' inventories remain very clean, enabling us to drive full-price selling and keep markdowns below last year's levels. This positions us well to pull forward receipts to build inventory and maximize the demand in the back half. Moving to shoe, up against a strong two-year stacked comp of 26%, it proved to be a tough summer season and quarter for shoe.

Speaker Change: Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that journey remains a key footwear destination.

Speaker Change: Journey's digital business remained very healthy, posting another quarter of double-digit growth, as our performance marketing, all access loyalty incentives, CRM campaigns, and omnichannel delivery options in ticed shoppers to purchase online.

Mimi Vaughn: Nevertheless, we continue to navigate a choppy environment. Faced with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must-have product in Q2 and passing on others. They again showed willingness to shop when there's a reason, like during 4th of July and back to school, and retreat when there's not. We expect these behaviors to carry on, particularly during non-peak shopping periods. As we demonstrated with the shoe and J&M coming through the pandemic, we have a solid record of managing well through adverse economic and fashion cycles, evolving with a customer to meet and exceed their changing footwear preferences and emerging stronger.

Speaker Change: Finally, journey's inventories remain very clean, enabling us to drive full-price selling and keep marked down below last year's levels. This positions us well to pull forward receipts to build inventory and maximize the demand in the back-of.

Speaker Change: Moving to shoe, up against a strong two-year stacked comp of 26%, it proved to be a tough summer season and quarter for shoe.

Mimi Vaughn: Q2 started off on a good note with pent-up demand from a late start to spring selling, but as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwear category, and shoes' seasonal assortment did not resonate to the level we expected. Like Journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower-moving product and match activity in the marketplace. While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter.

Speaker Change: Q2 started off on a good note with pent-up demand from a late start to spring-selling. But as summer kicked in with a higher cost of living, consumers were generally not motivated to make purchases in the footwork category, and shoes seasonal assortment did not resonate to the level we expected.

Mimi Vaughn: We're committed and excited to do the same with journeys as we execute strategies to elevate the journey's product brand and consumer experience. Driving positive journey's comps gives us considerable EPS upside with the leverage in our model enhanced by our recent cost reduction and share repurchase actions. Now for color on individual businesses starting with journeys. During holiday at the end of last year, we faced increased pressure on journey's core assortment, including vulcanized product and boots.

Shuth: Like journeys, Shuth customers have also been shifting away from Vulcanized Footwear. These pressures prompted Shuth to increase promotional activity to clear slower moving product and match activity in the marketplace.

Mimi Vaughn: Now for color on individual businesses, starting with journeys. During holiday at the end of last year, we faced increased pressure on journey's core assortment, including vulcanized product and boots. With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half of this year, despite easier compares, until we could deliver enough product to meaningfully impact the mix. Knowing our young customers' preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands.

Shuth: While this helps drive as sequential improvement in comps and kept inventories in good shape, it took a toll on gross margin in the quarter.

Mimi Vaughn: E-Com growth helped offset the weaknesses and stores, and shoes digital business, a meaningful channel at almost 40% of sales remains a key avenue for driving growth and engagement. Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the UK footwear market versus last year, remaining a key destination for the youth shopper. Many of the brands and styles working at Journeys are resonating at shoe for back to school, and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory. The kids business remains the highlight, outperforming the business as a whole for the quarter and during back to school to date.

Mimi Vaughn: With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half this year despite easier compares until we could deliver enough product to meaningfully impact the mix. Knowing our young customers preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands.

Shuth: E. Comgros helped offset the weaknesses stores and choose digital business, a meaningful channel at almost 40% of sales remains a key avenue for driving growth and engagement.

Speaker Change: Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the UK footwear market versus last year, remaining a key destination for the youth shopper.

Speaker Change: Many of the brands and styles working at journeys are resonating at shoe for back-to-school and while demand remains muted we expect less pressure on gross margin in this period given the cleaner inventory.

Speaker Change: The Kids Business remains the highlight outperforming the business as a whole for the quarter and during back to school to date.

Mimi Vaughn: Looking ahead, the team is implementing several initiatives to improve the trend and sharpen its customer focus. These include efforts to gain even stronger access to the best brands and the in-demand product, putting in play its new customer segmentation based on its latest market research, revamping shoes, creative marketing content, accelerating finance for the shoe club loyalty program, which now represents nearly 35% of total sales, and deploying new campaigns to drive higher loyalty point redemptions and sales.

Speaker Change: Looking ahead, the team is implementing several initiatives to improve the trend and sharpen its customer focus. These include efforts to gain even stronger access to the best brands and the in-demand product.

Speaker Change: Putting in play, it's new customer segmentation based on its latest market research.

Speaker Change: Re-vamping shoes, creative marketing content, accelerating finance for the shoe club loyalty program which now represents nearly 35% of total sales and deploying new campaigns to drive higher loyalty point redemptions and sales.

Mimi Vaughn: Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that Journeys remains a key footwear destination. Journeys' digital business remain very healthy, posting another quarter of double digit growth as our performance marketing, all-access loyalty incentives, CRM campaigns, and OmniChannel delivery options in tight shoppers to purchase online. Finally, Journeys' inventories remain very clean, enabling us to drive full-price selling and keep markdowns below last year's levels. This positions us well to pull forward receipts to build inventory and maximize the demand in the back half.

Mimi Vaughn: Now turning to our branded business, starting with Johnston and Murphy. Efforts to evolve and reimagine J&M as a more comfortable, more casual, multi-category lifestyle brand led to years of solid growth and success coming out of the pandemic. During this time, J&M drove footwear market share gains by growing both its physical and digital direct-to-consumer channels. However, the combination of robust 29% two-year stack comps and considerable softening in the men's premium, non-athletic footwear market pressured sales and calls deleveraging Q2. On a positive note, new products and new footwear franchises like the Amherst 2.0 are resonating well, showing the great appetite for freshness and reinforcing beyond-going desire for innovation and distinctive product.

Speaker Change: Now turning to our branded business, starting with Johnston and Murphy.

Speaker Change: Efforts to evolve and reimagine J&M as a more comfortable, more casual, multi-category lifestyle brand led to years of solid growth and success coming out of the pandemic.

Speaker Change: During this time, Jay and M.Drow's footwear market share gains by growing both its physical and digital direct-to-consumer channels.

Speaker Change: However, the combination of robust 29% two-year sack comps and considerable softening in the men's premium, non-athletic footwork market, pressured sales, and caused the leveraging Q2.

Mimi Vaughn: Moving to shoe, up against a strong two-year stacked comp of 26%, it proved to be a tough summer season and quarter for shoe. Q2 started off on a good note with pent-up demand from a late start to spring selling, but as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwear category, and shoes' seasonal assortment did not resonate to the level we expected. Like Journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower-moving product and match activity in the marketplace.

Speaker Change: On a positive note, new products and new footwear franchises, like the Amherst 2.0, are resonating well, showing the great appetite for freshness and reinforcing the ongoing desire for innovation and distinctive product.

Mimi Vaughn: J&M has responded by pulling forward new product launches like the Anders Sneaker program, fast tracking programs like the Upton Dreschew program, and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment. Another major opportunity is to build on the success of apparel and accessories, which now represent almost half of its direct-to-consumer business. Woven shirts, blazers, bags, and wallets have all been standouts this year in our mission to step up J&M affluence customers' wardrobes, increase apparel purchase frequency, and outfit them with confidence from head to toe.

Speaker Change: JNM has responded by pulling forward new product launches like the Anders Snickers program.

Speaker Change: Fast tracking programs like the Upton Dress shoe program and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment.

Mimi Vaughn: Like Journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower-moving product and match activity in the marketplace. While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter. E-Com growth helped offset the weaknesses and stores, and shoes digital business, a meaningful channel at almost 40% of sales remains a key avenue for driving growth and engagement.

Speaker Change: Another major opportunity is to build on the success of a peril and accessories which now represent almost half of its direct consumer business.

Mimi Vaughn: While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter. E-Com growth helped offset the weaknesses and stores, and shoes digital business, a meaningful channel at almost 40% of sales remains a key avenue for driving growth and engagement. Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the UK footwear market versus last year, remaining a key destination for the youth shopper. Many of the brands and styles working at Journeys are resonating at shoe for back to school, and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory.

Speaker Change: Loving shirts, blazers, bags and wallets have all been standouts this year in our mission to step up J&M of Fluent's Customers Wardrobes, increase apparel purchase frequency and outfit them with confidence from head to toe.

Mimi Vaughn: To accelerate progress for the rest of the year, we're looking forward to the arrival of more new fall product and franchise launches, which will pair with product story marketing and J&M's new brand campaign. We'll be increasing engagement with J&M's most valuable customers by leveraging its insider's Affinity program, which now consists of roughly 900,000 members. The program is driving higher average transaction size and more purchases, while at the same time nearly two-thirds of new customers are joining as well. Finishing the branded discussion, we continue to achieve success with the repositioning of Genesco brand group efforts to simplify the license portfolio to emphasize key brands and channels. This means lower sales in the short term but more profit, which was evident once again in Q2 results, and we expect will be for the future.

Speaker Change: To accelerate progress for the rest of the year, we're looking forward to the arrival of more new fall product and franchise launches, which will pair with product story marketing and J&M's new brand campaign.

Mimi Vaughn: Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the UK footwear market versus last year, remaining a key destination for the youth shopper. Many of the brands and styles working at Journeys are resonating at shoe for back to school, and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory. The kids business remains the highlight outperforming the business as a whole for the quarter and during back to school to date.

Speaker Change: will be increasing engagement with JNM's most valuable customers by leveraging its insider's affinity program, which now consists of roughly 900,000 members.

Speaker Change: The program is driving higher average transaction size and more purchases while at the same time, nearly two-thirds of new customers are joining as well.

Mimi Vaughn: The kids business remains the highlight, outperforming the business as a whole for the quarter and during back to school to date.

Speaker Change: Finishing the branded discussion, we continue to achieve success with the repositioning of Nesco Brands Group.

Speaker Change: Efforts to simplify the license portfolio to emphasize key brands and channels means lower sales in the short term but more profit which was evident once again in Q2 results and we expect will be for the future.

Mimi Vaughn: Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term. Product advantages are at the forefront of this effort initially, but ultimately it's about elevating our product brand and experience and putting the customer at the center of everything we do. A critical component has been strengthening the leadership team, which began with the addition of Andy, then a new chief merchant and a new leadership role for the SVP of Strategy and Transformation. Most recently, we strengthened the team further with the addition of Stacey Doran as Journey's new chief marketing officer.

Andy Gray: Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term.

Speaker Change: Product advantages are at the forefront of this effort initially, but ultimately it's about elevating our product brand and experience and putting the customer at the center of everything we do.

Speaker Change: A critical component has been strengthening the leadership team which began with the addition of Andy, then a new chief merchant and a new leadership role for the SVP of strategy and transformation.

Mimi Vaughn: However, the combination of robust 29% two-year stack comps and considerable softening in the men's premium, non-athletic footwear market, pressured sales, and calls deleveraging Q2. On a positive note, new products and new footwear franchises like the Amherst 2.0 are resonating well, showing the great appetite for freshness and reinforcing beyond-going desire for innovation and distinctive product. J&M has responded by pulling forward new product launches like the Anders Sneaker program, fast tracking programs like the Upton Dreschew program, and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment.

Speaker Change: Most recently, we strengthened the team further with the addition of Stacey Doran as journey's new chief marketing officer.

Mimi Vaughn: An exceptional marketing leader, Stacey joins the team following an accomplished career at Levi's. We're excited for what her expertise and many achievements in consumer brand building will bring to Journeys often.

Speaker Change: and exceptional marketing leader, Stacey joins the team following an accomplished career at Levi's. We're excited for what her expertise and many achievements in consumer brand building will bring to journey's offense.

Mimi Vaughn: I'll take a moment now to share with you updates on other key initiatives. Number one, drive product leadership and create marketplace differentiation. Beyond successfully broadening our assortment and re-merchandizing our stores to put an even sharper focus on footwear, we've also completed extensive customer research and updated our segmentation. The outcome of that work has revealed significant upside to build on our unique proposition being the leading destination for the young fashion team and, in particular, the teen girl. This is an underserved consumer in the footwear space. While many retailers in the mall cater to young females with fashion apparel, Journeys is the only destination in footwear for her with an authentically inclusive environment and strong presence across categories and premium brands.

Speaker Change: I'll take a moment now to share with you updates on other key initiatives.

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

Speaker Change: Beyond successfully broadening our assortment and remerchantizing our stores to put an even sharper focus on footwear, we've also completed extensive customer research and updated our segmentation.

Mimi Vaughn: Another major opportunity is to build on the success of apparel and accessories which now represent almost half of its direct-to-consumer business. Woven shirts, blazers, bags, and wallets have all been standouts this year in our mission to step up J&M affluence customers' wardrobes, increase apparel purchase frequency, and outfit them with confidence from head to toe. To accelerate progress for the rest of the year, we're looking forward to the arrival of more new fall product and franchise launches, which will pair with product story marketing and J&M's new brand campaign.

Speaker Change: The outcome of that work has revealed significant upside to build on our unique proposition being the leading destination for the young fashion team and in particular the team girl.

Speaker Change: This is an underserved consumer in the footwear space.

Speaker Change: While many retailers in the mall cater to young females with fashion apparel, journeys is the only destination in but where for her with an authentically inclusive environment and strong presence across categories and premium brands.

Mimi Vaughn: The diversity of our footwear offering, which is led by style versus any one category, is our leadership position. Number two, build the journey's brand and enhance the omnie experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand. Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores and second, roll out in a small group of test stores an updated store concept with a modern aesthetic that embodies Journey's useful useful attitude and energy. The fleet-wide refresh gets underway in mid-Q3, highlighting journeys, footwear leadership, and enhancing the in-store shopping experience with stronger visuals and storytelling.

Speaker Change: The diversity of our footwear offering, which is led by style versus any one category, is our leadership position.

Speaker Change: 2. Bill the journey's brand and enhance the Omni experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand.

Speaker Change: Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores.

Mimi Vaughn: Finishing the branded discussion, we continue to achieve success with the repositioning of Genesco brand group efforts to simplify the license portfolio to emphasize key brands and channels, means lower sales in a short term but more profit, which was evident once again in Q2 results, and we expect will be for the future. Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term.

Speaker Change: and second, roll out in a small group of test stores and update its store concept with a modern aesthetic that embodies journey's useful attitude and energy.

Speaker Change: The fleet-wide refresh gets underway in mid-Q3, highlighting journeys but where leadership and enhancing the and store shopping experience with stronger visuals and storytelling.

Mimi Vaughn: We plan to begin rolling out the updated store concept and next generation design in October. Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear-wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys, updated brand positioning and tone of voice. A number three, leverage the power of our people. Here we're doubling down on our amazing group of store employees.

Speaker Change: We plan to begin rolling out the updated store concept and next generation design in October.

Speaker Change: Next through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear wearing occasions.

Speaker Change: We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles.

Speaker Change: The next several months will enhance how we market today's consumer segments through digital and social channels delivering journeys updated brand positioning and tone of voice.

Mimi Vaughn: Most recently we strengthened the team further with the addition of Stacey Doran as journeys new chief marketing officer. An exceptional marketing leader, Stacey joins the team following an accomplished career at Levi's. We're excited for what her expertise and many achievements in consumer brand building will bring to journeys often.

Speaker Change: and number three, leverage the power of our people.

Speaker Change: Here, we're doubling down on our amazing group of store employees, providing excellent service is the key to differentiating journeys from competition and ensuring our stores are fun and engaging places to shop.

Mimi Vaughn: Providing excellent service is the key to differentiating journeys from competition and ensuring our stores are fun and engaging places to shop. To do this, we're investing in our people, improving employee training to help drive more efficiency and stronger conversion on the sales floor, and we're increasing customer engagement through store technology like mobile checkout and browsing. Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. To that end, we continue to optimize the store footprint, closing on productive stores and investing to meaningfully drive profitability in better locations.

Speaker Change: To do this we're investing in our people, improving employee training to help drive more efficiency and stronger conversion on the sales floor, and we're increasing customer engagement through store technology like mobile checkout and browsing.

Speaker Change: 4. Optimize to drive operational and cost efficiency.

Speaker Change: These efforts aim to lower the leverage point on our fixed expense base. And to that end, we continue to optimize the store footprint, closing on productive stores, and investing to meaningfully drive profitability in better locations.

Speaker Change: Failed recapture rates from these doors continued to exceed the level required to achieve break even.

Mimi Vaughn: This is an underserved consumer in the footwear space. While many retailers in the mall cater to young females with fashion apparel, journeys is the only destination in footwear for her with an authentically inclusive environment and strong presence across categories and premium brands. The diversity of our footwear offering which is led by style versus any one category is our leadership position.

Speaker Change: Turning now to our outlook, we're very encouraged by the positive reaction to journey's improved back to school assortment, an optimistic will be positioned to drive similar results for holiday, but in addition, we're taking a more cautious view for shoe and J&M over the remainder of the year.

Mimi Vaughn: But in addition, we're taking a more cautious view for SHU and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full-year guidance. We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

Speaker Change: While we now expect higher sales in total, we're maintaining our full year guidance.

Speaker Change: We look forward to building on journey's momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

Mimi Vaughn: Number two, build the journey's brand and enhance the omnie experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand. Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores and second, roll out in a small group of test stores and updated store concept with a modern aesthetic that embodies journey's useful useful attitude and energy. The fleet-wide refresh gets underway in mid-Q3, highlighting journeys, footwear leadership and enhancing the in-store shopping experience with stronger visuals and storytelling.

Mimi Vaughn: Before passing the call, I'd like to give an extra special thank you to our incredible people. Our unmatched ability to reinvent ourselves, evolve, and grow over the years with a keen understanding of what our customer wants is our true competitive advantage. There's no better reminder of this than the celebration of our company's 100th anniversary this summer. Congratulations and thank you for your tremendous efforts to drive our business for the balance of the year.

Speaker Change: Before passing the call, I'd like to give an extra special thank you to our incredible people.

Speaker Change: Our unmatched ability to reinvent ourselves, evolve and grow over the years with a keen understanding of what our customer wants is our true competitive advantage.

Speaker Change: There's no better reminder of this than the celebration of our company's 100th anniversary this summer.

Speaker Change: Congratulations, and thank you for your tremendous efforts to drive our business for the balance of the year. With that, I'll hand it over to Tom.

Tom George: With that, I'll hand it over to Tom. Thanks, Mimi. We were pleased results for the quarter exceeded expectations, improved profitability in journeys in Genesco brands, more than offset pressures in JNM and SHU. Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside, given the cost reductions and sharey purchases we have made and overall leverage in our model. Turning to results and consolidated revenue for the quarter was 525 million, which was better than we anticipated and flowed through to better leverage. In addition, the journey stores we closed over the last year, which drove a roughly 4% reduction in the size of our total fleet, resulted in improved overall productivity and had only a 1% net impact on total sales.

Mimi Vaughn: We plan to begin rolling out the updated store concept and next generation design in October. Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys updated brand positioning and tone of voice.

Mimi Vaughn: We plan to begin rolling out the updated store concept and next generation design in October. Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys, updated brand positioning and tone of voice.

Tom George: Thanks Mimi, we were pleased results for the quarter exceeded expectations.

Tom George: Improve Profitability in Journeys in Genesco Brands, more than offset pressures in JNM and Sue. Looking ahead, getting back to positive concert journeys provides us with meaningful opportunity.

Tom George: To drive burning's pressure upside, given the cost reductions and share repurchases.

Tom George: We have made an overall leverage in our model.

Tom George: Turning to results.

Tom George: and Solivated Revenue for the Quarter was 525 million.

Tom George: which was better than we anticipated and flowed through to better leverage.

Mimi Vaughn: A number three, leverage the power of our people. Here we're doubling down on our amazing group of store employees. Providing excellent service is the key to differentiating journeys from competition and ensuring our stores are fun and engaging places to shop. To do this, we're investing in our people, improving employee training to help drive more efficiency and stronger conversion on the sales floor, and we're increasing customer engagement through store technology like mobile checkout and browsing.

Tom George: In addition, the journey stores we closed over the last year, which drove a roughly 4% reduction in the size of our total fleet resulted in improved overall productivity and had only a 1% net impact on total sales.

Tom George: The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business. Total company comps were down 2%, which was a healthy sequential acceleration. By channel, total store comps were down 4%, while direct comps were up 8%, with digital sales accounting for 22% of total retail sales. Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journey's gross margin was down 90 basis points due primarily to product mix and a higher mix of comp sales. She's gross margin decreased 210 basis points driven mainly by increased promotional activity.

Tom George: The progress we've made in our digital business helped overcome the top-line pressure on our stores and wholesale business.

Speaker Change: The fellow company cops were down to percent, which was a healthy sequential acceleration.

Mimi Vaughn: Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. To that end, we continue to optimize the store footprint, closing on productive stores, and investing to meaningfully drive profitability in better locations. Sales recapture rates from these stores continue to exceed the level required to achieve break even.

Mimi Vaughn: Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. To that end, we continue to optimize the store footprint, closing on productive stores and investing to meaningfully drive profitability in better locations. Sales recapture rates from these stores continue to exceed the level required to achieve break even.

Speaker Change: By channel, total store cops were down 4% while direct cops were up 8%.

Speaker Change: with digital sales accounting for 22% of total retail sales.

Speaker Change: Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journey's gross margin was down 90 basis points. You primarily do product mix in a higher mix of e-con sales.

Mimi Vaughn: Turning now to our outlook, we're very encouraged by the positive reaction to journeys improved back to school assortment, and optimistic will be positioned to drive similar results for holiday. But in addition, we're taking a more cautious view for SHU and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full-year guidance.

Mimi Vaughn: Turning now to our outlook, we're very encouraged by the positive reaction to journeys' improved back to school assortment, and optimistic we'll be positioned to drive similar results for holiday. But in addition, we're taking a more cautious view for SHU and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full-year guidance. We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

Speaker Change: She has grossed more than D.C. to 110 basis points driven mainly by increased promotional activity.

Tom George: Jane Ames gross margin was up 40 basis points due largely to a comparison against increased inventory reserves last year, partially offset by increased retail markdowns and a lower mix. of DTC volume. Lastly, Genesco brand's adjusted gross margin was down 20 basis points to primarily the brand sales mix shift. Moving down the PNL, S-GNA expense was 48.6% of sales, leveraging 100 basis points over last year. The combination of our cost savings initiatives, closure of unproductive stores, and some improvement in the other expenses offset the increased variable expenses to support our direct sales growth, as well as additional selling salaries.

James: James Grossmargin was up 40 basis points.

James: Do largely to a comparison against increased inventory reserves last year. Arsley offset by increased retail markdowns and a lower mix.

James: of DTC volume. Lastly, Janesco Brands, a just-a-gross margin, was down 20 basis points to primarily the brand signals mixed shift.

Mimi Vaughn: We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

James: Moving down the P&L, SG&A expense was 48.6% of sales.

Mimi Vaughn: Before passing the call, I'd like to give an extra special thank you to our incredible people. Our unmatched ability to reinvent ourselves evolve and grow over the years with a keen understanding of what our customer wants is our true competitive advantage. There's no better reminder of this than the celebration of our company's 100th anniversary this summer.

James: Leveraging 100 basis points over last year.

James: The combination of our cost savings initiatives, closure of unproductive stores and some improvement in other expenses offset the increased variable expenses to support our direct sales growth as well as additional selling salaries.

Tom George: In addition, expenses benefited from some one-time items, including a royalty reversal and a favorable pickup in certain non-income taxes. Finally, we experienced increased appreciation from our technology investments. Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164, with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple of years, we will continue to be opportunistic to capture rent reductions as appropriate.

Mimi Vaughn: Congratulations and thank you for your tremendous efforts to drive our business for the balance of the year.

James: In addition, expenses benefited from some one-time items, including a royalty reversal and a favorable pickup in certain non-income taxes.

Tom George: With that, I'll hand it over to Tom. Thanks Mimi. We were pleased results for the quarter exceeded expectations, improved profitability in journeys in Genesco brands, more than offset pressures in JNM and SHU.

Tom George: With that, I'll hand it over to Tom.

Tom George: Thanks, Mimi. We were pleased results for the quarter exceeded expectations, improved profitability in journeys in Genesco brands, more than offset pressures in JNM and SHU. Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside, given the cost reductions and sharey purchases we have made and overall leverage in our model.

James: Finally, we experienced increased appreciation from our technology investments.

James: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives.

Tom George: Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside given the cost reductions and sharey purchases we have made and overall leverage in our model. Turning to results and solidated revenue for the quarter was 525 million which was better than we anticipated and flowed through to better leverage. In addition, the journey stores we closed over the last year which drove a roughly 4% reduction in the size of our total fleet resulted in improved overall productivity and had only a 1% net impact on total sales.

James: and Q2, we achieved a 9% reduction in straight line-run expense on 45 lease renewals across the company with an average term of approximately 4 years.

Tom George: Turning to results and consolidated revenue for the quarter was 525 million, which was better than we anticipated and flowed through to better leverage. In addition, the journey stores we closed over the last year, which drove a roughly 4% reduction in the size of our total fleet, resulted in improved overall productivity and had only a 1% net impact on total sales. The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business. Total company comps were down 2%, which was a healthy sequential acceleration. By channel, total store comps were down 4%, while direct comps were up 8%, with digital sales accounting for 22% of total retail sales.

James: This brings our year-to-date renewals to 164 with a 9% reduction in straight line reanxpants.

James: With over 50% of our fleet coming up for renewal in the next couple years, we will continue to be opportunistic to capture ramp reductions as appropriate.

Tom George: In summary, for the second quarter, we incurred a better-than-expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year. This all resulted in an adjusted diluted loss per share of 83 cents for the quarter versus an adjusted diluted loss per share of 85 cents last year. The year-over-year improvement was driven by the shift of a key week of back to school in a Q2 from Q3, which added approximately 20 to 25 million dollars to the top line in roughly 40 cents to earnings per share. Turning now to capital allocation and the balance sheet, we ended the quarter in a net debt position of approximately 32 million dollars, with clean inventories down 8% from last year.

James: In summary, for the second quarter we incurred a better than expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year.

Tom George: The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business. Total company comps were down 2%, which was a healthy sequential acceleration. By channel total store comps were down 4% while direct comps were up 8% with digital sales accounting for 22% of total retail sales. Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journey's gross margin was down 90 basis points due primarily to product mix and a higher mix of comp sales.

James: It's all resulted in an adjusted diluted loss per share of 83 cents for the quarter, versus an adjusted diluted loss per share of 85 cents last year.

James: The year-over-year improvement was driven by the shift of a key week of back-to-school and a Q2 from Q3, which added approximately $20 to $25 million to the top line in roughly 40 cents to earnings per share.

Tom George: Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journey's gross margin was down 90 basis points due primarily to product mix and a higher mix of comp sales. She's gross margin decreased 210 basis points driven mainly by increased promotional activity. Jane Ames gross margin was up 40 basis points due largely to a comparison against increased inventory reserves last year, partially offset by increased retail markdowns and a lower mix. of DTC volume. Lastly, Genesco brand's adjusted gross margin was down 20 basis points to primarily the brand sales mix shift. Moving down the P&L, S-G&A expense was 48.6% of sales, leveraging 100 basis points over last year.

Speaker Change: Turning now to capital allocation in the balance sheet.

Speaker Change: We ended the quarter in a net debt position of approximately $32 million with clean inventories.

Tom George: She's gross margin decreased 210 basis points driven mainly by increased promotional activity. Jane Ames gross margin was up 40 basis points due largely to a comparison against increased inventory reserves last year, partially offset by increased retail markdowns and a lower mix, of DTC volume. Lastly, Genesco brand's adjusted gross margin was down 20 basis points to primarily the brand sales mix shift. Moving down the PNL, S-GNA expense was 48.6% of sales, leveraging 100 basis points over last year.

Tom George: Journey's inventory was down 9%, leaving us well positioned for the fresh overseas we are bringing in through the back half. Overall, we plan to start building up our inventory level to drive sales. Looking at our financial flexibility, our strong balance sheet, and free cash flow generation, combined with our revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives. Capital expenditures in Q2 were $8 million, with investments primarily directed to retail stores and our digital and omnichannel initiatives. After a cycle of investment and digital and omnichannel, where we are currently getting the benefits, we are shifting emphasis to refreshing our store base.

Jerry: Down 8% from last year. Jerry's inventory was down 9%.

Jerry: Leave an us well positioned for the fresh neighborhoods seats we're bringing in through the back half.

Jerry: Over all we plan to start building up our inventory, level to drive sales.

Jerry: Looking at our financial flexibility, our strong balance sheet, and free cash flow generation, combined with a revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives.

Jerry: Capital expenditures in Q2 were 8 million with investments primarily directed to retail stores and our digital and on-the-channel initiatives.

Tom George: The combination of our cost savings initiatives, closure of unproductive stores, and some improvement in the other expenses offset the increased variable expenses to support our direct sales growth, as well as additional selling salaries. In addition, expenses benefited from some one-time items, including a royalty reversal and a favorable pickup in certain non-income taxes. Finally, we experienced increased appreciation from our technology investments.

Jerry: After a cycle of investment in digital or on-me channel, where we are currently getting the benefits. We are shifting emphasis to refreshing our store-base.

Tom George: Lastly, during the quarter, we were purchased almost 382,000 shares for $9.3 million, for an average cost of $24.49 per share. We have $42.8 million remaining on our current authorization. Over the past six years, we have repurchased nearly 50% of our outstanding shares. Looking at expense savings, we continue to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25 before reinvestment, with savings from all divisions and across the entire organization. The initiatives include lowering occupancy cost and increasing selling salary productivity to improve store profitability.

Speaker Change: Lastly, during the quarter we were purchased almost $382,000 for $9.3 million.

Speaker Change: for an average cost of $24.49 per share.

Speaker Change: We have 42.8 million dollars remaining on our current authorization.

Speaker Change: Over the past six years, we have repurchased nearly 50% of our outstanding shares.

Tom George: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164 with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple years, we will continue to be opportunistic to capture rent reductions as appropriate.

Tom George: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164, with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple of years, we will continue to be opportunistic to capture rent reductions as appropriate.

Speaker Change: Looking at expense savings, we continued to gain traction on our plan to reduce cost.

Speaker Change: by $45 to $50 million on an annualized basis by the end of fiscal $25. Before reinvestment was saving from all divisions and across the entire organization.

Speaker Change: The initiatives include lowering occupancy costs and increasing selling salary productivity to improve store profitability.

Tom George: In addition, we are working on optimizing our inventory marketing spend, warehouse, freight logistics cost, and other procurement efficiencies. These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology. We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here today, we've closed 29 Journey stores, primarily mall-based locations. We continue to evaluate up to 50 potential journey closures in total this year. We expect these closures to eliminate approximately $14 million of annualized STA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores we closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Speaker Change: In addition, we're working on optimizing our inventory marketing spend.

Speaker Change: Warehouse, Freight Logistics Cost.

Speaker Change: and other procurement efficiencies.

Speaker Change: These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing.

Tom George: In summary, for the second quarter, we incurred a better than expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year. This all resulted in an adjusted deluded loss per share of 83 cents for the quarter versus an adjusted deluded loss per share of 85 cents last year. The year-over-year improvement was driven by the shift of a key week of back to school in a Q2 from Q3 which added approximately 20 to 25 million dollars to the top line in roughly 40 cents to earnings per share.

Speaker Change: and Technology.

Speaker Change: We open five stores

Speaker Change: and closed 12 journey stores and in the quarter with 1,314 total stores.

Speaker Change: You're today with close 29 journey stores, primarily in well-based locations.

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

Speaker Change: We expect these closures to eliminate approximately $14 million of annualized FGNA cost.

Speaker Change: which is incremental to the roughly $25 million of annualized savings we realized from the stores we closed last year. And the $45 to $50 million of run rate savings we are targeting for this year.

Tom George: Turning now to capital allocation and the balance sheet, we ended the quarter in a net debt position of approximately 32 million dollars with clean inventories down 8% from last year. Journey's inventory was down 9%, leaving us well positioned for the fresh overseas we are bringing in through the back half. Overall, we plan to start building up our inventory level to drive sales. Looking at our financial flexibility, our strong balance sheet, and free cash flow generation, combined with our revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives.

Tom George: Turning now to capital allocation and the balance sheet, we ended the quarter in a net debt position of approximately 32 million dollars, with clean inventories down 8% from last year. Journey's inventory was down 9%, leaving us well positioned for the fresh overseas we are bringing in through the back half. Overall, we plan to start building up our inventory level to drive sales. Looking at our financial flexibility, our strong balance sheet, and free cash flow generation, combined with our revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives. Capital expenditures in Q2 were $8 million, with investments primarily directed to retail stores and our digital and omnichannel initiatives.

Tom George: Now turning to guidance, although Q2 results are better than we expected, we continue to retain a cautious view and, as such, reiterate our most recent full-year ETS outlook of 60 cents to $1. Before I walk through our assumptions, I'd like to quickly recap that, despite a challenging first half, our comp sales trends showed nice sequential improvement from Q1 to Q2, led by journeys, with overall comps turning positive in July. This momentum accelerated in August, driving comps further into positive territory Q3 to date. Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journeys positioned to deliver a solid holiday season, as Mimi said.

Speaker Change: Now turning to guidance, although Q2 results for better than we expected, we continue to retain a cautious view and a such reiterate our most recent full year EPS outlook of $0.60 to $1.

Speaker Change: Before I walk through our assumptions, I'd like to quickly recap that despite a challenging first half.

Speaker Change: or Comp Sales Trends.

Speaker Change: So nice sequential improvement from Q1 to Q2. Let by journeys.

Tom George: Capital expenditures in Q2 were 8 million with investments primarily directed to retail stores and our digital and omnichannel initiatives. After a cycle of investment and digital and omnichannel where we are currently getting the benefits, we are shifting emphasis to refreshing our store base. Lastly, during the quarter, we were purchased almost 382,000 shares for $9.3 million for an average cost of $24.49 per share. We have $42.8 million remaining on our current authorization. Over the past six years, we have repurchased nearly 50% of our outstanding shares.

Speaker Change: with overall comps turning positive in July.

Speaker Change: This moment of accelerated in August, driving combs further into positive territory.

Tom George: After a cycle of investment and digital and omnichannel where we are currently getting the benefits, we are shifting emphasis to refreshing our store base. Lastly, during the quarter, we were purchased almost 382,000 shares for $9.3 million, for an average cost of $24.49 per share. We have $42.8 million remaining on our current authorization. Over the past six years, we have repurchased nearly 50% of our outstanding shares. Looking at expense savings, we continue to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25 before reinvestment, with savings from all divisions and across the entire organization.

Speaker Change: Q3 today.

Speaker Change: Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journey's position to deliver a solid holiday season, as Mimi said.

Tom George: However, as we've seen over the past couple of years, the peaks and valleys of consumer shopping patterns have gotten more pronounced, marked by higher peaks and deeper troughs. As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for JNM and SHU, given their current trends and the uncertain operating environment, and expect that to offset the current strength at Journey. In all, we expect key three comps to be up, low single digits versus last year, with sales down slightly due to the 53rd week shift. For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in key three, mostly due to IMO pressure from product mixed shift at journeys and shoe, and some increased levels of promotional activity at shoe.

Mimi Vaughn: However, as we've seen over the past couple years

Mimi Vaughn: the peaks and valleys of consumer shopping patterns have gotten more pronounced.

Mark: Mark by higher peaks and deeper troughs.

Mark: As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for JNM and Sue, given their current trends and the uncertain operating environment.

Tom George: Looking at expense savings, we continue to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25 before reinvestment with savings from all divisions and across the entire organization. The initiatives include lowering occupancy cost and increasing selling salary productivity to improve store profitability. In addition, we are working on optimizing our inventory marketing spend, warehouse, freight logistics cost, and other procurement efficiencies. These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology.

Mark: and expect that to offset the current strength at journeys. In all we expect key three cops to be up low single digits versus last year.

Tom George: The initiatives include lowering occupancy cost and increasing selling salary productivity to improve store profitability. In addition, we are working on optimizing our inventory marketing spend, warehouse, freight logistics cost, and other procurement efficiencies. These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology. We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here today, we've closed 29 Journey stores, primarily mall-based locations. We continue to evaluate up to 50 potential journey closures in total this year.

Mark: with sales down slightly due to the 53rd week shift.

Mark: For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in Q3.

Mark: Mostly due to IMO pressure from product mixtures that journeys and shoe and some increased levels of promotional activity at shoe.

Tom George: In addition, the sales decline on our largely fixed cost base will result in SGNA delinerage of roughly 10 to 40 basis points, leading to earnings per share approximately 35 cents lower than key three last year. As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of key three and into key two. Looking to key four, we are assuming comps at a similar level to key three. However, given the higher sales volumes in key four, we are able to generate much more operating leverage on our expense structure to drive earnings.

Mark: In addition,

Mark: The sales decline on our largely fixed cost base will result in SGAD leverage of roughly 10 to 40 basis points.

Tom George: We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here today, we've closed 29 journey stores, primarily mall-based locations. We continue to evaluate up to 50 potential journey closures in total this year. We expect these closures to eliminate approximately $14 million of annualized STA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores we closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Mark: Leading to earnings per share approximately 35 cents lower than C3 last year.

Mark: As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of Q3 and into Q2.

Tom George: We expect these closures to eliminate approximately $14 million of annualized STA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores we closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Mark: Looking at Q4, we are assuming cops at a similar level, the Q3.

Mark: However, given the higher sales volumes in Q4, we are able to generate much more operating leverage on our expense structure to drive earnings.

Tom George: Taking this all into account for the year, we now expect higher sales and higher leverage, but more pressure and gross margin. Therefore, we now expect fiscal 25 total sales to decrease 1 percent to 2 percent, or flat to down 1 percent when excluding the 53rd week last year, versus our prior guidance for a total sales decrease of 2 percent to 3 percent. We now expect adjusted gross margin rates to be down 10 to 20 basis points for the year versus flat to up 10 basis points prior. Primarily due to product mix and the higher expected promotional activity at Shoe along with some product and channel mix pressure at Journeys.

Mark: Taking this all into account for the year we now expect higher sales and higher leverage but more pressure and gross margin.

Tom George: Now turning to guidance, although Q2 results are better than we expected, we continue to retain a cautious view and as such, reiterate our most recent full-year ETS outlook of 60 cents to $1. Before I walk through our assumptions, I'd like to quickly recap that despite a challenging first half, our comp sales trends showed nice sequential improvement from Q1 to Q2, led by journeys with overall comps turning positive in July. This momentum accelerated in August driving comps further into positive territory Q3 to date.

Mark: Therefore, we now expect fiscal 25 total sales to decrease 1% to 2% or flat to down 1% when excluding the 53rd week last year versus our prior guidance.

Mark: for a total sales decrease.

Mark: of 2% the 3%

Mark: We now expect a gestigorous margin rates to be down 10 to 20 basis points for the year versus flat up 10 basis points prior.

Mark: Primarily due to product mix and the higher expected promotional activity, it's due, along with some product and channel mix pressure at journeys.

Tom George: Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journeys positioned to deliver a solid holiday season, as Mimi said. However, as we've seen over the past couple years, the peaks and valleys of consumer shopping patterns have gotten more pronounced, marked by higher peaks and deeper troughs. As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for JNM and SHU, given their current trends and the uncertain operating environment, and expect that to offset the current strength at journey, in all we expect key three comps to be up, low single digits versus last year, with sales down slightly due to the 53rd week shift.

Tom George: As our percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points versus a range of flat to D leverage of 20 basis points prior. Our guidance assumes no additional sharey purchases, which results in fiscal 25 average shares outstanding of approximately 11 million, and we expect the tax rate to be approximately 27 percent.

Mark: As a percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points.

Mark: versus a range of flat to de-leverage of 20 basis points prior.

Mark: Our guidance assumes no additional cherry purchases, which results in fiscal 25 average shares outstanding of approximately 11 million and we expect the tax rate to be approximately 27%.

Tom George: To sum up, we're pleased with our progress at Journeys and confident that the measures we're implementing will position the business for even stronger long-term growth. Supporting that are the many other initiatives across our businesses that will collectively enable us to unlock considerable earnings potential, return to growth, and create meaningful shareholder value.

Mark: To sum up, we're pleased with our progress at journeys and confident that the measures we're implementing will position the business for even stronger long-term growth.

Mark: Supporting that are the many other initiatives across our businesses that will collectively enable us to unlock considerable earnings potential, return to growth and create meaningful shareholder value.

Operator: Operator, please open the call for questions. Thank you. Well, now we are conducting a question and answer session. If you'd like to ask a question of this time, please press star one from your telephone keypad and a confirmation tone to indicate your line's in the question. Thank you. You may press star two if you'd like to withdraw your question from the queue. From distance, they're using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

Tom George: For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in key three, mostly due to IMO pressure from product mixed shift at journeys and shoe and some increased levels of promotional activity at shoe. In addition, the sales decline on our largely fixed cost base will result in SGNA delinerage of roughly 10 to 40 basis points leading to earnings per share approximately 35 cents lower than key three last year.

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

Speaker Change: Thank you. Well now we can document a question and answer session. If you'd like to ask a question of this time, please press star 1 from your telephone keypad and a confirmation tone indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue.

Speaker Change: For distance or using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

Speaker Change: Thank you now. First question comes in the line of Mitch Cummins with C-port research. Please use your questions.

Mitch Cummins: Yes, thanks for taking my questions.

Tom George: As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of key three and into key two. Looking to key four, we are assuming comps at a similar level to key three. However, given the higher sales volumes in key four, we are able to generate much more operating leverage on our expense structure to drive earnings. Taking this all into account for the year we now expect higher sales and higher leverage but more pressure and gross margin.

Mitch Kummetz: I want to start with the third quarter guide. Tom, if I heard you correctly, I think you said you're expecting a low single-digit comp. Was that a consolidated comp? And it's so, what kind of a journey comp is embedded in that? Yeah, yeah, Mitch, that is a consolidated comp and relative to journeys. Journeys is low single digits as well. And then how are you thinking about September and October? It sounds like August has been a very good month for journeys. I mean, you talked about the pattern of shopping that consumers are shopping peaks and kind of disappearing in between.

Mitch Cummins: I'm going to start with the third quarter guy. Tom, if I heard you correctly.

Mitch Cummins: I think you said you're expecting a low single-digit cop, was that a consolidated cop and if so, what kind of a journey's cop is embedded in that?

Speaker Change: Yeah, Mitch, that is a consolidated comp and relative to journeys, journeys as low single digits as well.

Speaker Change: and I'll be back soon.

Speaker Change: And then, how are you thinking about September and October? Sounds like August has been a very good month.

Tom George: Therefore, we now expect fiscal 25 total sales to decrease 1 percent to 2 percent or flat to down 1 percent when excluding the 53rd week last year versus our prior guidance for a total sales decrease of 2 percent to 3 percent. We now expect adjusted gross margin rates to be down 10 to 20 basis points for the year versus flat to up 10 basis points prior. Primarily due to product mix and the higher expected promotional activity at shoe along with some product and channel mix pressure at journeys.

Mimi Vaughn: for journeys. Mimi, you talked about the pattern of shopping that consumers are shopping peaks and kind of disappearing in between. Are you assuming that, you know, stays positive in September and October or does that kind of a single digit journey is assumed that, um,

Mitch Kummetz: Are you assuming that you stay positive in September and October, or does that kind of low single digit journeys assume that you kind of go negative for the balance of the quarter?

Mimi Vaughn: Mitch, thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall, just in general in the category. And a lot of interest with our youth consumer. And, you know, they've been quite interested in buying a payroll. And typically when they're interested in buying a payroll there, then interested in buying footwear. And we couple that with journeys, much improved assortment. And we're going after a diversified assortment of brands and of styles and repositioning overall what we are offering.

Speaker Change: that you kind of go negative for the balance of the quarter.

Speaker Change: Thanks for joining us this morning. We are really excited about what we are seeing in journeys.

Speaker Change: What is different now is that there is more interest in footwear overall, just in general in the category, and a lot of interest with our youth consumer, and they've been...

Tom George: As our percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points versus a range of flat to D leverage of 20 basis points prior. Our guidance assumes no additional sharey purchases which results in fiscal 25 average shares outstanding of approximately 11 million and we expect the tax rate to be approximately 27 percent.

Tom George: As our percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points versus a range of flat to D leverage of 20 basis points prior.

Speaker Change: Quite interested in buying a payroll, and typically when they're interested in buying a payroll, they're then interested in buying footwear and we couple that.

Speaker Change: with Journey's Much Improved Disortment, and we're going after a diversified.

Tom George: Our guidance assumes no additional sharey purchases, which results in fiscal 25 average shares outstanding of approximately 11 million, and we expect the tax rate to be approximately 27 percent.

Speaker Change: and sort of in a brand and of styles and in repositioning overall what we are offering and that's been a good combination. And so as we said, we saw a nice pickup as we dropped new product that our merchant teams have been working hard to chase.

Mimi Vaughn: And that's been a good combination. And so, as we said, we saw a nice pick up as we dropped a new product that our merchant team has been working hard to chase in July. And then that accelerated into August with respect that we will continue to see positive comps because we do have that product that will drive and that that combination of consumer demand and having great product to serve the consumer will continue into September and October. But we also then think that consumer just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday.

Mimi Vaughn: To sum up, we're pleased with our progress at journeys and confident that the measures we're implementing will position the business for even stronger long-term growth. Supporting that are the many other initiatives across our businesses that will collectively enable us to unlock considerable earnings potential, return to growth and create meaningful shareholder value.

Speaker Change: and July, and then that accelerated into August, with respect that we will continue to see.

Speaker Change: Positive Comps, because we do have that product that will drive and that combination of consumer demand and having great product to serve the consumer will continue in this September and October, but we also then thank the consumer just pulls back and get interested in other things.

Operator: Operator, please open the call for questions. Thank you. Well now we conducting a question and answer session. If you'd like to ask a question of this time, please press star one from your telephone keypad and a confirmation tone to indicate your lines in the question. Thank you. You may press star two if you'd like to withdraw your question from the queue. From distance, they're using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

Speaker Change: We then think about holiday and being able to pursue demand during those peak weeks leading into holiday. So it continues to be positive to be pulling back and then strengthening again as we get to the holiday period.

Mimi Vaughn: And so it continues to be positive to be pulling back and then strengthen again as we get to the holiday period. And then meaning for holiday, I guess starting with back to school, it seems like you've had a lot of newness, particularly on the athletic side, which really feeds into kind of back to school demand. But going into holiday, then it kind of shifts more towards boots and things like that.

Speaker Change: and then Mimi for a holiday, I guess starting with that school, it seems like you've had a lot of newness.

Mimi Vaughn: particularly on the athletic side, which really feeds into a back-to-school demand. But going into holidays, then it kind of shifts more towards...

Mitch Kummetz: Thank you, and our first question comes from the line of Mitch Cummets with C-Port Research. Please continue with your questions. Yes, thanks for taking my questions. I've got a handful. I want to start with the third quarter guide. Tom, if I heard you correctly, I think you said you're expecting a low single digit comp. Was that a consolidated comp? And it's so, what kind of a journey comp is embedded in that?

Mitchel Kummetz: Thank you, and our first question comes from the line of Mitch Cummets with C-Port Research. Please continue with your questions.

Mimi Vaughn: Do you feel like you've got enough newness on the boot side to maintain this more momentum, or do you just think that like what you're doing on the athletic piece really just sort of carries forward into holiday as well to drive the positive comp and for a few that Tom reference in the in the outlook. Sure. What's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side. And so it is not just one brand. It really is a variety of brands. And in fact, we saw strength and even more brands than we had anticipated for back to school.

Tom George: Yes, thanks for taking my questions. I've got a handful. I want to start with the third quarter guide. Tom, if I heard you correctly, I think you said you're expecting a low single-digit comp. Was that a consolidated comp? And it's so, what kind of a journey comp is embedded in that?

Mimi Vaughn: Good things like that. Do you feel like you've got enough mooness on the boot side to maintain it?

Mitch Kummetz: Yeah, yeah, Mitch, that is a consolidated comp and relative to journeys. Journeys is low single digits as well. And then how are you thinking about September and October? It sounds like August has been a very good month for journeys. I mean, you talked about the pattern of shopping that consumers are shopping peaks and kind of disappearing in between. Are you assuming that you stay positive in September and October, or does that kind of low single digit journeys assume that you kind of go negative for the balance of the quarter?

Speaker Change: This more momentum or do you just think that like the way you're doing on your athletic piece really just sort of carries forward into holiday as well to drive the positive comp and for a queue that Tom referenced in the in the outlet.

Speaker Change: Sure, what's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side.

Tom George: Yeah, yeah, Mitch, that is a consolidated comp and relative to journeys. Journeys is low single digits as well.

Speaker Change: and so it is not just one brand, it really is a variety of brands and in fact we saw strength in even more brands than we had anticipated for back to school.

Mitchel Kummetz: And then how are you thinking about September and October? It sounds like August has been a very good month for journeys. I mean, you talked about the pattern of shopping that consumers are shopping peaks and kind of disappearing in between.

Mimi Vaughn: So it's a few brands certainly on the athletic side. And athletic is where we have strength in the most. You're right about that. But also on what we call the casual side, we have seen some nice strengths. The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals in summer. You know, we're athletic year round, and then booths in the winter seems like there's more carried through a product. And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating.

Speaker Change: It's a few brands, certainly on the athletic side, and athletic is where we have strength in the most. You write about that, but also on what we call the casual side, we have seen some nice strength.

Mitchel Kummetz: Are you assuming that you stay positive in September and October, or does that kind of low single digit journeys assume that you kind of go negative for the balance of the quarter?

Speaker Change: The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals and summer.

Mitch Kummetz: Mitch, thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall, just in general in the category. And a lot of interest with our youth consumer. And, you know, they've been quite interested in buying a payroll. And typically when they're interested in buying a payroll there, then interested in buying footwear. And we couple that with journeys, much improved assortment.

Speaker Change: You know, we're athletic, you're round and then boots in the winter.

Speaker Change: Seems like there's more carry-through of product, and so we've read through all of that, and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating. And so, we've talked with you about how the boot category specifically has been declining over the past few years. We're not expecting boots to pick up, but we are seeing some green shoes.

Mimi Vaughn: And so, you know, we've talked with you about how the boot category specifically has, you know, been declining over the past few years. We're not expecting groups, say, to pick up, but we are seeing some green shoots across some boot brands. And so if that comes and gets some traction, then that'll be additive. To where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter. And we do believe that we have the product to back up the comps that we're expecting for holiday.

Mitch Kummetz: And we're going after a diversified assortment of brands and of styles and repositioning overall what we are offering. And that's been a good combination. And so as we said, we saw a nice pick up as we dropped a new product that our merchant teams been working hard to chase in July. And then that accelerated into August with respect that we will continue to see positive comps because we do have that product that will drive and that that that combination of consumer demand and having great product to serve the consumer will continue into September and October.

Speaker Change: Across some boot brands, and so if that comes and gets in traction, then that'll be added to where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter and we do believe that we have a product.

Mimi Vaughn: And that's been a good combination. And so, as we said, we saw a nice pick up as we dropped a new product that our merchant team has been working hard to chase in July. And then that accelerated into August with respect that we will continue to see positive comps because we do have that product that will drive and that that that combination of consumer demand and having great product to serve the consumer will continue into September and October. But we also then think that consumer just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday.

Speaker Change: to back up the comps that we're expecting for holiday.

Mimi Vaughn: And then maybe you mentioned in your prepared remarks, this opportunity to better serve the team, curl consumer. Can you just elaborate on that? How much of that is, is again, like further tweaking the assortment versus maybe doing a better job marketing to that consumer? And then from an assortment standpoint, obviously, there are lead times. So how quickly can you make, make adjustments in order to better serve that consumer? Sure. Mitch, so it's all of the above in terms of what you're talking about. If you think about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that, that male, that boy customer with athletic product.

Speaker Change: And then maybe you mentioned in your prepared remarks this opportunity to better serve the team, Coral.

Speaker Change: Consumer, can you just elaborate on that? How much of that is, again, like, further tweaking the assortment versus maybe doing a better job marketing to that consumer and that's from an assortment standpoint, obviously there will lead times.

Mitch Kummetz: But we also then think that consumer just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday. And so it continues to be positive to be pulling back and then strengthen again as we get to the holiday period. And then meaning for holiday, I guess starting with back to school, it seems like you've had a lot of newness, particularly on the athletic side, which really feeds into kind of back to school demand.

Speaker Change: So how quickly can you make a adjustments in order to better serve that consumer?

Mitch Kummetz: But going into holiday, then it kind of shifts more towards boots and things like that. Do you feel like you've got enough newness on the boot side to maintain this more momentum, or do you just think that like what you're doing on the athletic piece really just sort of carries forward into holiday as well to drive the positive comp and for a few that Tom reference in the in the outlook. Sure.

Mitch Cummins: Sure, Mitch, so it's all of the above in terms of what you're talking about. If you think about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that male, that boy customer with athletic product.

Mimi Vaughn: And our ability to serve that team across that diversified assortment of both athletic and of casual for whatever you're wearing occasions are. And girls are wearing athletic. They're slipping into sandals. They're wearing athletic across lots of brands. I mean, we've seen coming away from vulcanized that the concentration within a couple of brands has proliferated. And more options are better for us. More ability to serve the customer is better for us. We are more female than we are male today. We traditionally have been serving the female consumer well, but we are doubling down on that. We've done a battery of research that's allowed us to do even more refined segmentation around our customer group.

Speaker Change: and our ability to serve that team across that diversified assortment of low athletic.

Speaker Change: and of casual for whatever you're wearing occasions are in.

Speaker Change: and girls are wearing athletic, they're slipping into sandals, they're wearing athletic or frost lots of brands. I mean we've seen coming away from vulcanized that the concentration within a couple of brands has proliferated.

Mitch Kummetz: What's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side. And so it is not just one brand. It really is a variety of brands. And in fact, we saw strength and even more brands than we had anticipated for for back to school. So it's a few brands certainly on the athletic side. And athletic is where we have strength in the most.

Speaker Change: and more options is better for us, more ability to serve the customer is better for us.

Speaker Change: We are more female than we are male today. We traditionally have been serving the female consumer well.

Speaker Change: but we are doubling down on that. We've done a battery of research that's allowed us to...

Mitch Kummetz: You're right about that. But also on what we call the casual side, we have seen some nice strengths. The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals in summer. You know, we're athletic year round and then booths in the winter seems like there's more carried through a product. And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating.

Speaker Change: to do even more refined segmentation around our customer group. And so you're going to see a real change in our overall marketing to the consumer. You're going to see some real emphasis within our stores to cater to that female customer. You're going to see an elevation of our assortment. You're going to see just the premium nature of our brands went up through because we've gotten that feedback that we can really deliver to the customer on that. That's based.

Mimi Vaughn: And so you're going to see a real change in our overall marketing to the consumer. You're going to see some real emphasis within our stores to cater to that female customer. You're going to see an elevation of our assortment. You're going to see just the premium nature of our brands up through because we've gotten that feedback that we can really deliver to the customer on that space. And she's looking forward. It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while. And we have been working on the assortment to be able to deliver on that vision.

Speaker Change: and she's looking for it. It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while and we have been working on the sortment to be able to deliver on that vision. And so it's a complete picture of starting with product, adding marketing, having a great store environment, getting out there on social, speaking to that customer, letting her know that we're the place.

Mitch Kummetz: And so, you know, we've talked with you about how the boot category specifically has, you know, has, has, has been declining over the past few years. We're not expecting groups say to pick up, but we are seeing some green shoots across some boot brands. And so if that comes and get some traction, then that'll be additive. To where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter and and we do believe that we have the product to back up the comps that we're expecting for holiday.

Mimi Vaughn: And so it's a complete picture of starting with product, adding marketing, having a great store environment, getting out there on social, speaking to that customer, letting her know that we're the place when she thinks about coming and buying her fashion footwear. And it's not just the female that we're talking about, but we do think leading with the female, we will open up the aperture for customers we aren't serving today. And certainly welcome anybody who wants to come shop in our jewelry store.

Speaker Change: When she thinks about coming and buying her fashion footwear, and it's not just the female that we're talking about, but we do think leading with a female we will open up the aperture for customers we aren't serving today, and certainly welcome anybody who wants to come shop in our journey's stores.

Mitch Kummetz: And then maybe you mentioned in your prepared remarks, this opportunity to better serve the team, curl consumer. Can you just elaborate on that? How much of that is, is again, like further tweaking the assortment versus maybe doing a better job marketing to that consumer and then from an assortment standpoint, obviously, there are lead times. So how quickly can you make, make adjustments in order to better serve that consumer? Sure. Mitch, so it's all of the above in terms of what you're talking about.

Mitchel Kummetz: And then maybe you mentioned in your prepared remarks, this opportunity to better serve the team, curl consumer. Can you just elaborate on that? How much of that is, is again, like further tweaking the assortment versus maybe doing a better job marketing to that consumer? And then from an assortment standpoint, obviously, there are lead times. So how quickly can you make, make adjustments in order to better serve that consumer? Sure. Mitch, so it's all of the above in terms of what you're talking about. If you think about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that, that male, that boy customer with athletic product.

Mimi Vaughn: And then my last question, just on the stores: you talked about a refresh starting in 3Q. Is that going to be complete before the holiday season really kicks in? And then, as far as the updated concept is concerned, he just reminded us like what's really different there versus the rich versus the current box, and like when do you expect to have that test done, and what might a rollout look in terms of taking that to more doors? So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores, and it's going to be a lot with visuals; it's going to be a lot with how we merchandise within the stores. We've started a little bit of that, but this will be a rollout across the entire footprint, and that will be completed before holiday kicks in.

Speaker Change: And then my last question just on the stores, you talked about a refresh starting in 3Q. Is that going to be complete before the holidays season really kicks in? And then as far as the updated concept is concerned, he's just reminded us.

Speaker Change: Like, what's really different there versus be a rickett which versus the current box? And like, when do you expect to have that test?

Dunn: Dunn, and what might a roll out look in terms of taking that to more doors?

Mitch Kummetz: If you think about about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that, that male, that boy customer with athletic product. And our ability to serve that team across that diversified assortment of both athletic and of casual for whatever you're wearing occasions are. And girls are wearing athletic. They're slipping into sandals. They're wearing athletic across lots of brands.

Speaker Change: So, much the refresh that we're talking about starting in Q3 will touch all of our stores and it's going to be a lot with visuals. It's going to be a lot with how we merchandise within the stores. We've started a little bit of that, but this will be a rollout across the entire footprint. And that will be completed before holiday kicks in. We're taking advantage of that period between back to school and holiday. And it's visuals as you walk in the store. It's, you know, the placement of product within the store. It is, it's those things that we can get done in a pretty immediate and pretty impactful fashion.

Mimi Vaughn: We're taking advantage of that period between back to school and holiday, and it's visuals as you walk in the store, it's the placement of product within the store, it is the things that we can get done in a pretty immediate and pretty impactful fashion then in terms of what's going to be different in terms of the new concept versus the current box. I think you have known our journey store for a long time, and I would say that it's been more of an evolution than a revolution. This new concept is going to be really different, and it is going to absolutely highlight the product. It's going to put us in a position where we'll have more flexibility and more functionality, but that we can highlight our brand partners, we can speak to the product, we can speak to our customer. We'll have flexibility of being able to do it in this new box, and yet it will at the same time keep that great youth energy and that excitement that Journeys is all about.

Mitch Kummetz: I mean, we've seen coming away from vulcanized that the concentration within a couple of brands has proliferated. And more options is better for us. More ability to serve the customer is better for us. We are more female than we are male today. We traditionally have been serving the female consumer well, but we are doubling down on that. We've done a battery of research that's allowed us to do even more refined segmentation around our customer group.

Speaker Change: Then in terms of, well, what's the different in terms of the new concept versus the current box?

Speaker Change: I think you've known our journey store for a long time and I would say that it's been more of an evolution.

Speaker Change: Then a revolution and this new concept is going to be really different and it is going to absolutely highlight the product.

Mitch Kummetz: And so you're going to see a real change in our overall marketing to the consumer. You're going to see some real emphasis within our stores to cater to that that female customer. You're going to see an elevation of our assortment. You're going to see just the premium nature of our brands up through because we've gotten that feedback that we can we can really deliver to the customer on that space. And she's looking forward.

Speaker Change: It's going to put us in a position where we'll have more flexibility and more functionality, but that we can highlight our brand partners, we can speak to the product, we can speak to our customer, we'll have flexibility of being able to do it.

Speaker Change: in this new box and yet they will at the same time keep that great use of energy and that excitement that journeys is all about.

Mimi Vaughn: The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October, and we're starting in the big volume locations where we know we can drive productivity and the impact. And so we will test as we go along, and not only are we putting in place a new look of the store, but we are, we're combining that with better marketing, with better social, with increased merchandising, and so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to. And so we're going to test that, and we're going to roll it as we get the results, and then we'll go from there.

Speaker Change: The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October and we're starting in the big volume locations.

Mitch Kummetz: It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while. And we have been working on the assortment to be able to deliver on that vision. And so it's a complete picture of starting with product, adding marketing, having a great store environment, getting out there on social, speaking to that customer, letting her know that we're the place when she thinks about coming and buying her fashion footwear.

Speaker Change: where we know we can drive productivity and the impact.

Speaker Change: and so we will test as we go along and not only are we putting in place.

Speaker Change: A new look of the store, but we are for your work.

Speaker Change: Combining that with better marketing, with better social, with increased merchandising. And so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to. And so we're going to test that and we're going to roll it as we get the results. And then we'll go from there.

Mitch Kummetz: And it's not just the female that we're talking about, but we do think leading with the female, we will open up the aperture for customers we aren't serving today. And certainly welcome anybody who wants to come shop in our jewelry store. And then my last question just on the stores, you talked about a refresh starting in 3Q. Is that going to be complete before the holiday season really kicks in? And then as far as the updated concept is concerned, he just reminded us like what's really different there versus the rich versus the current box and like when do you expect to have that test done and what might a rollout look in terms of taking that to more doors?

Operator: Great, thanks, good luck. Thank you. If you'd like to ask a question, you may press star one at this time.

Mitch Kummetz: So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores and it's going to be a lot with visuals, it's going to be a lot with how we merchandise within the stores, we've started a little bit of that but this will be a rollout across the entire footprint and that will be completed before holiday kicks in. We're taking advantage of that period between back to school and holiday and it's visuals as you walk in the store, it's the placement of product within the store, it is the things that we can get done in a pretty immediate and pretty impactful fashion then in terms of what's going to be different in terms of the new concept versus the current box.

Mitchel Kummetz: And then my last question, just on the stores: you talked about a refresh starting in 3Q. Is that going to be complete before the holiday season really kicks in?

Speaker Change: Great, thanks, goodnight.

Speaker Change: Thank you.

Speaker Change: Thank you. If you like to ask a question, you may press star one at this time. The next question to me comes from the line of Monterey, Moran Archie, which Fries. This is your question.

Montero Moreno: The next question today comes from the line of Montero Moreno cheek, which Jeffries? Please excuse me for your questions. Hello and thanks for taking my call today. Just two quick ones for me.

Mimi Vaughn: And then, as far as the updated concept is concerned, he just reminded us like what's really different there versus the rich versus the current box, and like when do you expect to have that test done, and what might a rollout look in terms of taking that to more doors? So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores, and it's going to be a lot with visuals; it's going to be a lot with how we merchandise within the stores. We've started a little bit of that, but this will be a rollout across the entire footprint, and that will be completed before holiday kicks in.

Speaker Change: Hello and thanks for taking my call today. Get to quick ones from me. First one is Jeff.

Montero Moreno: First one is Jeff. I think last one we talked about Johnson Murphy Marketing, and it was like not your father's shoe, so just anything else. So you're thinking about some marketing for JNM and just put it off the brand's new company. Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Johnson Murphy, and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer. I know that we pivoted hard into casual and comfortable styles, and traditionally Johnson Murphy has been known for wingtips and captoes. But we did a lot coming out of the pandemic to absolutely reposition the assortment, and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear.

Speaker Change: I think last one we talked about Johnson Murphy marketing and it was like not your father's shoe so just anything else you're seeing with the marketing for J&M and just put us the brands in your company

Speaker Change: Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Johnson and Murphy in it.

Speaker Change: speaks to the progress that we've made and reinventing the brand and evolving with a consumer. I know that we pivoted hard into casual and comfortable styles and traditionally Johnson Murphy's been known for wing tips and captoes, but we did a lot coming out of the pandemic to absolutely reposition the assortment and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear. In addition to that we've grown categories outside of footwear and it comprises almost half of what we're selling in our DTC channels today and so.

Mimi Vaughn: In addition to that, we've grown categories outside of footwear, and it comprises almost half of what we're selling in our DTC channels today. And so getting the word out has been really, really important. We have found that our awareness for our Johnson Murphy customer is lower than we'd like it to be, so the brand marketing is directed at updating the consumer to know the latest with Johnson Murphy and then also being able to build out awareness for customers who are similar to the ones who already shop with us, but don't necessarily know about Johnson Murphy.

Mitch Kummetz: I think you have known our journey store for a long time and I would say that it's been more of an evolution than a revolution and this new concept is going to be really different and it is going to absolutely highlight the product, it's going to put us in a position where we'll have more flexibility and more functionality but that we can highlight our brand partners, we can speak to the product, we can speak to our customer, we'll have flexibility of being able to do it in this new box and yet it will at the same time keep that great youth energy and that excitement that Journeys is all about. The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October and we're starting in the big volume locations where we know we can drive productivity and the impact and so we will test as we go along and not only are we putting in place a new look of the store but we are, we're combining that with better marketing, with better social, with increased merchandising and so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to and so we're going to test that and we're going to roll it as we get the results and then we'll go from there.

Speaker Change: Getting the word out has been really, really important. We have found that our awareness for our Johnson and Murphy customer is lower than we'd like it to be. So the brand marketing is directed at updating the consumer to know the latest with Johnson Murphy and then also being able to build out awareness for customers who are similar to the ones who will already shop with us, but bit bit.

Mimi Vaughn: What is important right now is newness, new products, and new franchises, and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer. There's a real opportunity for innovation and more distinctive product, and so it's not just marketing that is going to make a difference and drive sales going forward, but it is also the great product and the great product stories that we'll tell with that marketing.

Speaker Change: I don't necessarily know about Johnston Murphy.

Speaker Change: What is important right now is newness, new products and new franchises and I spoke about that in the overall remarks.

Speaker Change: that we are pulling forward product because it's what's resonating with a consumer. There's a real opportunity for innovation and more distinctive product. So it's not just marketing that is going to make a difference and drive sales going forward, but it is also the great product and the great product stories that we'll tell with that marketing.

Montero Moreno: Thank you.

Mimi Vaughn: Also just on what brands would you say are not brand or what would you say is a great trend that we share if you look forward to for the back to cool season right now. Yeah, so it's a good question, and I can't tell all our secrets. You'll have to come in our store to check it out, but the theme of the day is diversification and great interest, and I said it to Mitch. But what is exciting right now is that the customers are really enthusiastic about footwear, and we've seen that in overall traffic patterns for the category.

Speaker Change: Thank you, and then um...

Speaker Change: Also just on...

Speaker Change: What?

Speaker Change: Brands, would you say, are not Brands, or what would you say is a great trend that we should be looking forward to for the back to cool season.

Mitch Kummetz: Great, thanks, good luck. Thank you. If you'd like to ask a question, you may press star one at this time.

Mitchel Kummetz: Great, thanks, good luck. Thank you.

Operator: If you'd like to ask a question, you may press star one at this time.

Montero Moreno: The next question today comes from the line of Montero Moreno cheek, which jeffries? Please excuse me for your questions. Hello and thanks for taking my call today. Just two quick ones for me.

Mantero Moreno: The next question today comes from the line of Montero Moreno cheek, which Jeffries? Please excuse me for your questions.

Speaker Change: Right now.

Speaker Change: Yeah, so it's a good question and I can't tell all our secrets, you'll have to come in our store to check it out.

Mantero Moreno: Hello and thanks for taking my call today. Just two quick ones for me. First one is Jeff. I think last one we talked about Johnson Murphy Marketing, and it was like not your father's shoe, so just anything else. So you're thinking about some marketing for JNM and just put it off the brand's new company.

Speaker Change: The theme of the day is diversification and great interest, and I said it to Mitch, but what is exciting right now is that the customer's really enthusiastic about footwear. And we've seen that in overall traffic patterns for the category, but journey's traffic has really outstripped the overall category benchmark.

Montero Moreno: First one is jeff I think last one we talked about Johnson Murphy Marketing, and it was like not your father's shoe, so just anything else, so you're thinking about some marketing for JNM and just put it off the brand's new company. Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Johnson Murphy and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer.

Mimi Vaughn: But journey's traffic has really outstripped the overall category benchmark, and so there's a lot of just interest in footwear. I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation, and our brands didn't offer a lot of innovation, and that innovation is hitting now. And it's not just interest in one brand. It's not just interest in athletic or in non-athletic product. It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price is also has also gone up kicked up pretty significantly with the new assortment that we are selling, which is more premium product at higher price points.

Mimi Vaughn: Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Johnson Murphy, and it speaks to the progress that we've made in reinventing the brand and evolving with the consumer. I know that we pivoted hard into casual and comfortable styles, and traditionally Johnson Murphy has been known for wingtips and captoes. But we did a lot coming out of the pandemic to absolutely reposition the assortment, and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear.

Speaker Change: And so there's a lot of just pretty tricks in footwear and I think that over time we've spent a lot of time discussing the fact that during the pandemic we did not for a lot of innovation and our brands didn't offer a lot of innovation.

Montero Moreno: I know that we pivoted hard into casual and comfortable styles and traditionally Johnson Murphy has been known for wingtips and captoes, but we did a lot coming out of the pandemic to absolutely reposition the assortment and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear. In addition to that, we've grown categories outside of footwear and it comprises almost half of what we're selling in our DTC channels today and so getting the word out has been really, really important.

Speaker Change: and that innovation is hitting now and it's not just interest in one brand, it's not just interest in athletic or in non athletic product. It's really interest across the board and a number of brands and a number of styles.

Speaker Change: What is good for us is that average selling price has also gone up, kicked up.

Mimi Vaughn: In addition to that, we've grown categories outside of footwear, and it comprises almost half of what we're selling in our DTC channels today. So getting the word out has been really, really important. We have found that our awareness for our Johnson Murphy customer is lower than we'd like it to be, so the brand marketing is directed at updating the consumer to know the latest with Johnson Murphy and then also being able to build out awareness for customers who are similar to the ones who already shop with us, but don't necessarily know about Johnson Murphy. What is important right now is newness, new products, and new franchises, and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer.

Speaker Change: Pretty significantly with the new assortment that we are selling, which is more premium product at higher price points. And so there's interest across a number of different brands.

Mimi Vaughn: And so there's interest across a number of different brands. There's still a move away from vulcanized product, which was represented by a couple of strong brands in particular. But vulcanized will always be part of our assortment, and we, you know, we will continue to offer newness that comes along with vulcanized. But the great trend right now is a lot of interest and a lot of diversification and better price points as a result of all of that.

Speaker Change: There's still a move away from Vulcanized product, which was represented by a couple of strong brands in particular, but Vulcanized will always be part of our assortment. And we will continue to offer newness that comes along with Vulcanized, but the great trend right now is a lot of interest.

Montero Moreno: We have found that our awareness for our Johnson Murphy customer is lower than we'd like it to be, so the brand marketing is directed at updating the consumer to know the latest with Johnson Murphy and then also being able to build out awareness for customers who are similar to the ones who already shop with us, but don't necessarily know about Johnson Murphy. What is important right now is newness, new products and new franchises and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer.

Speaker Change: and a lot of diversification and better price points as a result of all of that.

Operator: thank you thank you thank you thank you. at this time I'd like to turn the flood right to measure for further remarks. all right thank you for joining us today and we look forward to speaking to you on our third-order earnings call. right thank you this will conclude today's conference. you may disconnect your lines this time. thank you for your participation and have a wonderful day. .

Speaker Change: Thank you!

Speaker Change: Thank you.

Speaker Change: at this time, I'd like to turn the flag right to mention for further remarks.

Speaker Change: Thank you for joining us today and we look forward to speaking to you on our third quarter earnings call. Right, thank you.

Montero Moreno: There's a real opportunity for innovation and more distinctive product and so it's not just marketing that is going to make a difference and drive sales going forward, but it is also the great product and the great product stories that we'll tell with that marketing.

Mimi Vaughn: There's a real opportunity for innovation and more distinctive product, and so it's not just marketing that is going to make a difference and drive sales going forward, but it is also the great product and the great product stories that we'll tell with that marketing.

Speaker Change: This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Never wonderful day.

Montero Moreno: Thank you. Also just on what brands would you say are not brand or what would you say is a great trend that we share if you look forward to for the back to cool season right now. Yeah, so it's a good question and I can't tell all our secrets. You'll have to come in our store to check it out, but the theme of the day is diversification and great interest and I said it to Mitch, but what is exciting right now is that the customers really enthusiastic about about footwear and we've seen that in overall traffic patterns for the category.

Mantero Moreno: Thank you.

Montero Moreno: But journey's traffic has really outstripped the overall category benchmark and so there's a lot of just interest in footwear and I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation and our brands didn't offer a lot of innovation and that innovation is hitting now. And it's not just interest in one brand. It's not just interest in athletic or in non athletic product.

Mimi Vaughn: But journey's traffic has really outstripped the overall category benchmark, and so there's a lot of just interest in footwear. I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation, and our brands didn't offer a lot of innovation, and that innovation is hitting now. And it's not just interest in one brand. It's not just interest in athletic or in non-athletic product. It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price has also gone up, kicked up pretty significantly with the new assortment that we are selling, which is more premium product at higher price points.

Montero Moreno: It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price is also has also gone up kicked up pretty significantly with the new assortment that we are selling, which is more premium product at higher price points. And so there's interest across a number of different brands. There's still a move away from vulcanized product, which was represented by a couple of strong brands in particular.

Mimi Vaughn: And so there's interest across a number of different brands. There's still a move away from vulcanized product, which was represented by a couple of strong brands in particular. But vulcanized will always be part of our assortment, and we, you know, we will continue to offer newness that comes along with vulcanized. But the great trend right now is a lot of interest and a lot of diversification, and better price points as a result of all of that.

Montero Moreno: But vulcanized will always be part of our assortment and we, you know, we will continue to offer newness that comes along with vulcanized. But the great trend right now is a lot of interest and a lot of diversification and better price points as a result of all of that.

Mantero Moreno: Thank you.

Mimi Vaughn: At this time, I'd like to turn the floor right to the measure for further remarks.

Mimi Vaughn: Great, thank you for joining us today, and we look forward to speaking to you on our third-order earnings call.

Operator: Right, thank you.

Operator: This will conclude today's conference. You made disconnect your lines this time.

Operator: Thank you for your participation, and have a wonderful day.

Darryl MacQuarrie: Good day, everyone, and welcome to the Genesco second quarter fiscal 2025 conference call. Just a reminder, today's call is being recorded.

Darryl MacQuarrie: Good day everyone and welcome to the Genesco 2nd Quarter, this school 2025 conference call. Just your reminder, today's call is being recorded. I'll now turn the call over to Darryl MacQuarrie, Senior Director of FPNA. Please go ahead, sir.

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

Darryl MacQuarrie: Good morning, everyone, and thank you for joining us to discuss our second 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. 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 second quarter fiscal 25 results.

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

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

Speaker Change: For kids, it's also expected to refer to certain adjusted financial measures during the call.

Speaker Change: All non-gap financial measures are reconciled to their gap 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.

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

Darryl MacQuarrie: With me on the call today is Mimi Vaughn, Board Chair, President and Chief Executive Officer, and Tom George, Chief Financial Officer.

Speaker Change: with me on the call today is Mimi Vaughn, board chair, resident and chief executive officer.

Mimi Vaughn: Now I'd like to turn the call over to Mimi. Thanks, Darryl. Good morning, everyone, and thank you for joining us. I'll start today with a review of the key drivers of our second quarter performance, and provide an update on the strategic initiatives to drive growth at Journeys and elsewhere in our company. Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions. We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations. Sales exceeded the levels we anticipated, led by journeys, more than offsetting some pressure issue in Johnston and Murphy, which continued to face robust multi-year comparisons.

Speaker Change: and Tom George, Chief Financial Officer.

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

Mimi Vaughn: Thanks, Darryl. Good morning, everyone, and thank you for joining us.

Tommel: Tommel review the financials and more detail and walk through our current outlook and then we'll be happy to take questions.

Tommel: We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations.

Tommel: Sales exceeded the levels we anticipated led by journeys, more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multi-year comparisons.

Mimi Vaughn: Thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time and thank you very much and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much for your time, and thank you very much Ginesco refers you to this morning's earnings release, and the company's SEC filings, including its most recent 10K and 10Q filings for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today.

Tommel: Our digital business was a standout of high single digits and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expensive in what is one of our lower volume quarters.

Tommel: Our number one priority is and has been to improve performance at journeys.

Tommel: Step one of our plans centered around efforts to inject our product assortment with more newness, excitement and storytelling to drive an inflection in journey's comps and deliver that to our consumers through enhanced, stored digital and social experiences.

Tommel: and as we anticipated, our Q2 results demonstrated solid progress against that plan.

Mimi Vaughn: Journeys assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July before the onset of back to school and accelerating into August. We saw a notable pickup in attention to footwear, marked by growth in traffic by our North American youth consumer as a quarter progressed. The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into journeys proposition as the consummate curator of styles across both casual and fashion athletic brands. New Journeys leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back to school results.

Tommel: Journey's assortment resonated well, driving strong sequential sales improvement with comb-sturning positive in July, before the onset of back to school, and accelerating into August.

Tommel: We saw a notable pick-up in attention to footwear marked by growth in traffic by our North American youth consumer as a quarter progressed.

Tommel: The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the files they're wearing.

Tommel: This shift plays well into journey's proposition as the consummate curator of styles across both casual and fashion athletic brands.

Speaker Change: New Journey's Leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back to school results.

Mimi Vaughn: 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.

Mimi Vaughn: With greater depth on brand and styles teens want, we expect to be well-positioned to similarly drive demand for the important holiday season. We have more work to do to unlock Journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal. Nevertheless, we continue to navigate a choppy environment. Based with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must-have product in Q2 and passing on others.

Speaker Change: With greater depth on brand and style teens want, we expect to be well-positioned to similarly drive demand for the important holiday season.

Mimi Vaughn: We have also posted a presentation summarizing our results here as well.

Darryl MacQuarrie: With me on the call today is Mimi Vaughn, Board Chair, President and Chief Executive Officer, and Tom George, Chief Financial Officer.

Speaker Change: We have more work to do to unlock journey full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal.

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

Montero Moreno: Thank you.

Mimi Vaughn: Thanks, Darryl. Good morning, everyone, and thank you for joining us. I'll start today with a review of the key drivers of our second quarter performance, and provide an update on the strategic initiatives to drive growth at Journeys and elsewhere in our company. Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions.

Speaker Change: Nevertheless, we continue to navigate a choppy environment. Based with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must have producting Q2 and passing on others.

Operator: At this time, I'd like to turn the floor right to the measure for further remarks. Great, thank you for joining us today and we look forward to speaking to you on our third-order earnings call. Right, thank you.

Operator: This will conclude today's conference. You made disconnect your lines this time.

Speaker Change: They again said willingness to shop when there's a reason, like during 4th of July and back to school and retreat when there's not.

Operator: Thank you for your participation and have a wonderful day.

Mimi Vaughn: We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations. Sales exceeded the levels we anticipated, led by journeys, more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multi-year comparisons. Our digital business was a standout of high single digits, and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expenses in what is one of our lower volume quarters.

Speaker Change: We expect these behaviors to carry on, particularly during non-peak shopping periods.

Speaker Change: As we demonstrate with the shoe and J&M coming through the pandemic, we have a solid record of managing well through adverse economic and fashion cycles, evolving with a customer to meet and exceed their changing footwear preferences and emerging stronger.

Darryl MacQuarrie: [inaudible] and thank you very much[inaudible] Ginesco refers you to this morning's earnings release, and the company's SEC filings, including its most recent 10K and 10Q filings for some of the factors that could cause differences from the expectations reflected in the forward-looking statements made today. 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. We have also posted a presentation summarizing our results here as well.

Mimi Vaughn: 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 me. Thanks Darryl, good morning everyone, and thank you for joining us. I'll start today with a review of the key drivers of our second quarter performance, and provide an update on the strategic initiatives to drive growth at journeys and elsewhere in our company.

Speaker Change: We're committed and excited to do the same with journeys as we execute strategies to elevate the journey's product, brand, and consumer experience.

Mimi Vaughn: Driving positive journeys comps gives us considerable EPS upside, with the leverage in our model enhanced by our recent cost reduction and share repurchase actions. Now for color on individual businesses, starting with journeys. During holiday at the end of last year, we faced increased pressure on journeys' core assortment, including vulcanized product and boots. With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half this year despite easier compares until we could deliver enough product to meaningfully impact the mix. knowing our young customers' preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands.

Speaker Change: Driving positive journey's comps gives us considerable EPS upside with the leverage in our model, enhanced by our recent cost reduction and share repurchase actions.

Mimi Vaughn: Our number one priority is and has been to improve performance at journeys. Step one of our plans centered around efforts to inject our product assortment with more newness, excitement, and storytelling to drive an inflection in journeys comps and deliver that to our consumers through enhanced store, digital, and social experiences. And as we anticipated, our Q2 results demonstrated solid progress against that plan. Journeys assortment resonated well, driving strong sequential sales improvement, with comps turning positive in July before the onset of back to school and accelerating into August. We saw a notable pickup in attention to footwear, marked by growth in traffic by our North American youth consumer as a quarter progressed.

Speaker Change: Now for color on individual businesses starting with journeys.

Speaker Change: During holiday, at the end of last year, we face increased pressure on Darryl's core assortment, including vulcanized product and boots.

Speaker Change: Knowing our young customer's preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took a aggressive and quick action and successfully added significant units and freshness across several major brands.

Mimi Vaughn: Our key brand partners, very enthusiastic about journey's unique customer proposition, stepped up with tremendous support of our strategic direction to better serve this cohort through elevated assortments and depth. Following a more challenging May and June, receive of this product in time to kick off a strong back-to-school drove positive comms in July and higher ASPs with solid results in early back-to-school markets and over tax-free holidays. The comp trend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back-to-school weeks. Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that Journey's remains a key footwear destination.

Mimi Vaughn: The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into Journeys' proposition as the consummate curator of styles across both casual and fashion athletic brands. New journeys leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back to school results. With greater depth on brand and styles teens want, we expect to be well-positioned to similarly drive demand for the important holiday season. We have more work to do to unlock Journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal.

Speaker Change: Following a more challenging day in June, receipt of this product in time to kick off a strong back to school drove positive, comps and July and higher ASPs with solid results in early back to school markets and over tax free holidays.

Speaker Change: The Comptrend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back to school weeks.

Speaker Change: Importantly, Star Traffic Nicely outpaced the broader market as it accelerated through the quarter, highlighting that journey's remains a key footwear destination.

Mimi Vaughn: Journey's digital business remained very healthy, posting another quarter of double-digit growth as our performance marketing, all-access loyalty incentives, CRM campaigns, and omnichannel delivery options in tight shoppers to purchase online. Finally, journey's inventories remained very clean, enabling us to drive full-price selling and keep markdowns below last year's levels. This positions us well to pull forward receipts to build inventory and maximize the demand in the back half. Moving to shoe, up against a strong two-year stacked comp of 26 percent, it proved to be a tough summer season and quarter for shoe. Q2 started off on a good note with pent-up demand from a late start to spring selling, but as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwear category, and shoes' seasonal assortment did not resonate to the level we expected.

Speaker Change: Journey Digital Business remained very healthy, posting another quarter of double-digit growth as our performance marketing, all access loyalty incentives, CRM campaigns, and omnichannel delivery options in tight shoppers to purchase online.

Mimi Vaughn: Nevertheless, we continue to navigate a choppy environment. Based with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must-have product in Q2 and passing on others. They again showed willingness to shop when there's a reason, like during 4th of July and back to school, and retreat when there's not. We expect these behaviors to carry on, particularly during non-peak shopping periods. As we demonstrated with the shoe and J&M coming through the pandemic, we have a solid record of managing well through adverse economic and fashion cycles, evolving with a customer to meet and exceed their changing footwear preferences and emerging stronger.

Speaker Change: Finally, journey's inventories remain very clean, enabling us to drive full-price selling and keep marked down below last year's levels.

Speaker Change: This positions us well to pull forward receipts to build inventory and maximize the demand in the back half.

Speaker Change: Moving to shoe, up against a strong two-year fact comp of 26% it proved to be a tough summer season and quarter for shoe.

Speaker Change: Q2 started off on a good note with pent-up demand from a late start to spring selling. But as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwork category and shoes seasonal assortment did not resonate to the level we expected.

Mimi Vaughn: Like journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower moving product and match activity in the marketplace. While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter. E-com growth helped offset the weakness in stores and shoes digital business. A meaningful channel at almost 40 percent of sales remains a key avenue for driving growth and engagement. Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the youth shopper.

Speaker Change: Black journeys, Shuth customers have also been shifting away from Vulcanized Footwear.

Speaker Change: These pressures prompted students to increase promotional activity to clear slow-moving product and match activity in the marketplace.

Mimi Vaughn: Tom will review the financials in more detail and walk through our current outlook, and then we'll be happy to take questions. We were pleased in the second quarter to once again deliver top and bottom line results ahead of our expectations. Sales exceeded the levels we anticipated led by journeys more than offsetting some pressure as shoe and Johnston and Murphy, which continued to face robust multi-year comparisons. Our digital business was a standout of high single digits and our ongoing plan to optimize the store footprint and reduce costs contributed to the bottom line as well, allowing us to leverage expenses in what is one of our lower volume quarters.

Mimi Vaughn: Now for color on individual businesses, starting with journeys. During holiday at the end of last year, we faced increased pressure on journeys' core assortment, including vulcanized product and boots. With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half of this year, despite easier compares, until we could deliver enough product to meaningfully impact the mix. Knowing our young customers' preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands.

Speaker Change: While this helps drive as sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter.

Mimi Vaughn: Our number one priority is and has been to improve performance at journeys. Step one of our plans centered around efforts to inject our product assortment with more newness, excitement, and storytelling to drive an inflection in journeys comps and deliver that to our consumers through enhanced store, digital, and social experiences. And as we anticipated, our Q2 results demonstrated solid progress against that plan. Journeys assortment resonated well, driving strong sequential sales improvement with comps turning positive in July before the onset of back to school and accelerating into August.

Speaker Change: E. Comgros helped offset the weaknesses stores and choose digital business, a meaningful channel at almost 40% of sales remains a key avenue for driving growth and engagement.

Mimi Vaughn: We saw a notable pickup in attention to footwear marked by growth in traffic by our North American youth consumer as a quarter progressed. The journey's customer has become more interested in a broader range of brands they are buying and more diversified in the styles they're wearing. This shift plays well into journeys proposition as the consummate curator of styles across both casual and fashion athletic brands. New journeys leadership accomplished a lot in a short time to seize the opportunity to meet these changing footwear preferences and deliver positive back to school results.

Mimi Vaughn: Many of the brands and styles working at Journeys are resonating at shoe for back to school, and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory. The kids business remains the highlight, outperforming the business as a whole for the quarter and during back to school to date. Looking ahead, the team is implementing several initiatives to improve the trend and sharpen its customer focus. These include efforts to gain even stronger access to the best brands and the in-demand product, putting in play its new customer segmentation based on its latest market research, revamping shoes, creative marketing content, accelerating finance for the shoe club loyalty program, which now represents nearly 35% of total sales, and deploying new campaigns to drive higher loyalty point redemptions and sales.

Speaker Change: Many of the brands and styles working at journeys are resonating at shoe for back-to-school, and while demand remains muted, we expect less pressure on Gross Margin in this period given the cleaner inventory.

Mimi Vaughn: With greater depth on brand and styles teens want, we expect to be well-positioned to similarly drive demand for the important holiday season. We have more work to do to unlock journey's full earnings potential, but our recent performance gives us confidence we're on the right track and is a key first step toward achieving this critical goal. Nevertheless, we continue to navigate a choppy environment. Based with higher prices, the consumer remains very selective about what to buy and what not to buy, continuing to shop primarily for key footwear items and must have product in Q2 and passing on others.

Mimi Vaughn: Our key brand partners, very enthusiastic about journey's unique customer proposition, stepped up with tremendous support of our strategic direction to better serve this cohort through elevated assortments and depth. Following a more challenging May and June, receive of this product in time to kick off a strong back-to-school drove positive comms in July and higher ASPs with solid results in early back-to-school markets and over tax-free holidays. The comp trend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back-to-school weeks. Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that Journey's remains a key footwear destination.

Speaker Change: The Kiss Business remains the highlight outperforming the business as a whole for the quarter and during back to school to date.

Speaker Change: Looking ahead, the team is implementing several initiatives to improve the trend and sharpen its customer focus.

Speaker Change: These include efforts to gain even stronger access to the best brands and the in-demand product.

Speaker Change: Putting in play, it's new customer segmentations based on its latest market research.

Speaker Change: Re-vamping shoes, creative marketing content, accelerating finance for the shoe club loyalty program, which now represents nearly 35% of total sales, and deploying new campaigns to drive higher loyalty point redemptions and sales.

Mimi Vaughn: Now turning to our branded business, starting with Johnston and Murphy, efforts to evolve and reimagine J&M as a more comfortable, more casual, multi-category lifestyle brand led to years of solid growth and success coming out of the pandemic. During this time, J&M drove footwear market share gains by growing both its physical and digital direct-to-consumer channels. However, the combination of robust 29% to year-stack comps and considerable softening in the men's premium, non-athletic footwear market pressured sales, and calls for wear franchises like the Amherst 2.0 are resonating well, showing the great appetite for freshness and reinforcing beyond-going desire for innovation and distinctive product.

Speaker Change: Now turning to our branded business, starting with Johnston and Murphy.

Speaker Change: efforts to evolve and reimagine J&M as a more comfortable, more casual, multi-category lifestyle brand led to years of solid growth and success coming out of the pandemic.

Speaker Change: During this time, Jay and M.Drow's footwear market share gains by growing both its physical and digital direct to consumer channels.

Speaker Change: However, the combination of robust 29% two-year sack comps and considerable softening in the men's premium non-athletic footwear market, pressured sales, and caused the leveraging Q2.

Mimi Vaughn: Moving to shoe, up against a strong two-year stacked comp of 26 percent, it proved to be a tough summer season and quarter for shoe. Q2 started off on a good note with pent-up demand from a late start to spring selling, but as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwear category, and shoes' seasonal assortment did not resonate to the level we expected. Like journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower moving product and match activity in the marketplace.

Mimi Vaughn: J&M has responded by pulling forward new product launches like the Anders Sneaker program, fast-tracking programs like the Upton Dreshoe program, and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment. Another major opportunity is to build on the success of apparel and accessories, which now represent almost half of its direct-to-consumer business. Woven shirts, blazers, bags, and wallets have all been standouts this year in our mission to step up J&M affluence customers' wardrobes, increase apparel purchase frequency, and outfit them with confidence from head to toe. To accelerate progress for the rest of the year, we're looking forward to the arrival of more new fall product and franchise launches, which will pair with product story marketing and J&M's new brand campaign.

Speaker Change: J&M has responded by pulling forward new product launches like the Anders Snickers program.

Speaker Change: Another major opportunity is to build on the success of a peril and accessories which now represent almost half of its direct consumer business.

Mimi Vaughn: While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter. E-com growth helped offset the weakness in stores and shoes digital business. A meaningful channel at almost 40 percent of sales remains a key avenue for driving growth and engagement. Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the youth shopper. Many of the brands and styles working at Journeys are resonating at shoe for back to school, and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory.

Speaker Change: Lovin shirts, blazers, bags and wallets have all been standouts this year in our mission to step up J&M of Fluent's customers, wardrobes, increase the peril purchase frequency and outfit them with confidence from head to toe.

Mimi Vaughn: We'll be increasing engagement with J&M's most valuable customers by leveraging its insider's Affinity program, which now consists of roughly 900,000 members. The program is driving higher average transaction size and more purchases, while at the same time nearly two-thirds of new customers are joining as well. Finishing the branded discussion, we continue to achieve success with the repositioning of Genesco Brands Group. Efforts to simplify the license portfolio to emphasize key brands and channels means lower sales in the short term, but more profit, which was evident once again in Q2 results, and we expect we'll be for the future.

Speaker Change: will be increasing engagement with JNM's most valuable customers by leveraging its insider's affinity program, which now consists of roughly 900,000 members.

Speaker Change: The program is driving higher average transaction size and more purchases while at the same time nearly two-thirds of new customers are joining as well.

Mimi Vaughn: The kids business remains the highlight, outperforming the business as a whole for the quarter and during back to school to date.

Speaker Change: Finishing the branded discussion, we continue to achieve success with the repositioning of the Nesco brand group.

Mimi Vaughn: Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term. Product advantages are at the forefront of this effort initially, but ultimately it's about elevating our product brand and experience and putting the customer at the center of everything we do. A critical component has been strengthening the leadership team, which began with the addition of Andy, then a new chief merchant and a new leadership role for the SVP of strategy and transformation. Most recently, we strengthened the team further with the addition of Stacey Doran as Journey's new chief marketing officer and exceptional marketing leader. Stacey joins the team following an accomplished career at Levi's.

Andy Gray: Moving back to journeys and its strategic growth plan Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term.

Speaker Change: Most recently, we strengthened the team further with the addition of Stacey Doran as journey's new chief marketing officer.

Mimi Vaughn: We're excited for what her expertise and many achievements in consumer brand building will bring to Journey's office. I'll take a moment now to share with you updates on other key initiatives. Number one, drive product leadership and create marketplace differentiation. Beyond successfully broadening our assortment and re-merchandizing our stores to put an even sharper focus on footwear, we've also completed extensive customer research and updated our segmentation. The outcome of that work has revealed significant upside to build on our unique proposition being the leading destination for the young fashion team and in particular the team girl. This is an underserved consumer in the footwear space, while many retailers in the mall cater to young females with fashion apparel.

Speaker Change: I'll take a moment now to share with you updates on other key initiatives.

Mimi Vaughn: J&M has responded by pulling forward new product launches like the Anders Sneaker program, fast tracking programs like the Upton Dreshoe program, and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment. Another major opportunity is to build on the success of apparel and accessories, which now represent almost half of its direct-to-consumer business. Woven shirts, blazers, bags, and wallets have all been standouts this year in our mission to step up J&M affluence customers' wardrobes, increase apparel purchase frequency, and outfit them with confidence from head to toe.

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

Speaker Change: This is an underserved consumer in the footwear space.

Speaker Change: While many retailers in the mall cater to young females with fashion apparel, journeys is the only destination in footwear for her with an authentically inclusive environment and strong presence across categories and premium brands.

Mimi Vaughn: Journeys is the only destination in footwear for her with an authentically inclusive environment and strong presence across categories and premium brands. The diversity of our footwear offering, which is led by style versus any one category, is our leadership position. Number two, build the journey's brand and enhance the omnie experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand. Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores and second, roll out in a small group of test stores an updated store concept with a modern aesthetic that embodies Journey's useful useful attitude and energy.

Speaker Change: The diversity of our footwear offering, which is led by style versus any one category, is our leadership position.

Speaker Change: 2. Bill the journey's brand and enhance the Omni experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand.

Speaker Change: Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores.

Mimi Vaughn: Finishing the branded discussion, we continue to achieve success with the repositioning of Genesco Brands Group. Efforts to simplify the license portfolio to emphasize key brands and channels means lower sales in the short term, but more profit, which was evident once again in Q2 results, and we expect we'll be for the future. Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term. Product advantages are at the forefront of this effort initially, but ultimately it's about elevating our product brand and experience and putting the customer at the center of everything we do.

Speaker Change: and second, roll out in a small group of test stores and updated store concept with a modern aesthetic that embodies journeys useful attitude and energy.

Mimi Vaughn: The fleetwide refresh gets underway in mid-Q3, highlighting journeys, footwear leadership, and enhancing the in-store shopping experience with stronger visuals and storytelling. We plan to begin rolling out the updated store concept and next generation design in October. Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear-wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys, updated brand positioning and tone of voice.

Speaker Change: The Fleetwide Refresh gets underway in mid-Q3, highlighting journeys but where leadership and enhancing the and store shopping experience with stronger visuals and storytelling.

Mimi Vaughn: We're committed and excited to do the same with journeys as we execute strategies to elevate the journey's product brand and consumer experience. Driving positive journeys comps gives us considerable EPS upside with the leverage in our model enhanced by our recent cost reduction and share repurchase actions. Now for color on individual businesses starting with journeys. During holiday at the end of last year we faced increased pressure on journeys core assortment, including vulcanized product and boots.

Speaker Change: We plan to begin rolling out the updated store concept and next generation design in October.

Speaker Change: We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles.

Mimi Vaughn: A critical component has been strengthening the leadership team, which began with the addition of Andy, then a new chief merchant, and a new leadership role for the SVP of strategy and transformation.

Speaker Change: Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys updated brand positioning and tone of voice.

Mimi Vaughn: Number three, leverage the power of our people. Here we're doubling down on our amazing group of store employees. Providing excellent service is the key to differentiating journeys from competition and ensuring our stores are fun and engaging places to shop. To do this, we're investing in our people, improving employee training to help drive more efficiency and stronger conversion on the sales floor, and we're increasing customer engagement through store technology like mobile checkout and browsing. Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. And to that end, we continue to optimize the store footprint, closing on productive stores and investing to meaningfully drive profitability in better locations.

Mimi Vaughn: Most recently, we strengthened the team further with the addition of Stacey Doran as Journey's new chief marketing officer and exceptional marketing leader. Stacey joins the team following an accomplished career at Levi's. We're excited for what her expertise and many achievements in consumer brand building will bring to Journey's office.

Speaker Change: A number three, leverage the power of our people.

Speaker Change: To do this, we're investing in our people, improving employee training to help drive more efficiency and stronger conversion on the sales floor, and we're increasing customer engagement through store technology like mobile checkout and browsing.

Mimi Vaughn: I'll take a moment now to share with you updates on other key initiatives. Number one, drive product leadership and create marketplace differentiation. Beyond successfully broadening our assortment and re-merchandizing our stores to put an even sharper focus on footwear, we've also completed extensive customer research and updated our segmentation. The outcome of that work has revealed significant upside to build on our unique proposition being the leading destination for the young fashion team and, in particular, the team girl. This is an underserved consumer in the footwear space, while many retailers in the mall cater to young females with fashion apparel.

Mimi Vaughn: With minimal ability to adjust right away given footwear lead times, we expected this dynamic to continue through much of the first half this year despite easier compares until we could deliver enough product to meaningfully impact the mix, knowing our young customers preferences were shifting in favor of this more diversified offering, the team led by our new chief merchant took aggressive and quick action and successfully added significant newness and freshness across several major brands. Our key brand partners, very enthusiastic about journey's unique customer proposition, stepped up with tremendous support of our strategic direction to better serve this cohort through elevated assortments and depth.

Speaker Change: 4. Optimize to drive operational and cost efficiency.

Mimi Vaughn: Sales recapture rates from these stores continue to exceed the level required to achieve break even. Turning now to our outlook, we're very encouraged by the positive reaction to journeys' improved back to school assortment. And optimistic will be positioned to drive similar results for holiday. But in addition, we're taking a more cautious view for shoe and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full-year guidance. We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

Speaker Change: Sales recapture rates from these stores continue to exceed the level required to achieve break-evens.

Speaker Change: Turning now to our outlook, we're very encouraged by the positive reaction to journey's improved back to school assortment. An optimistic will be positioned to drive similar results for holiday, but in addition, we're taking a more cautious view for shoe and J&M over the remainder of the year.

Speaker Change: While we now expect higher sales in total, we're maintaining our full year guidance.

Speaker Change: We look forward to building on journey's momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

Mimi Vaughn: Number two, build the journey's brand and enhance the omnie experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand. Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores and second, roll out in a small group of test stores an updated store concept with a modern aesthetic that embodies Journey's useful useful attitude and energy. The fleetwide refresh gets underway in mid-Q3, highlighting journeys, footwear leadership, and enhancing the in-store shopping experience with stronger visuals and storytelling. We plan to begin rolling out the updated store concept and next generation design in October.

Mimi Vaughn: Before passing the call, I'd like to give an extra special thank you to our incredible people. Our unmatched ability to reinvent ourselves involves and grow over the years with a keen understanding of what our customer wants is our true competitive advantage. There's no better reminder of this than the celebration of our company's 100th anniversary this summer. Congratulations, and thank you for your tremendous efforts to drive our business for the balance of the year.

Speaker Change: Before passing the call, I'd like to give an extra special thank you to our incredible people.

Speaker Change: Our unmatched ability to reinvent ourselves, evolve and grow over the years with a keen understanding of what our customer wants is our true competitive advantage.

Speaker Change: There's no better reminder of this than the celebration of our company's 100th anniversary this summer.

Speaker Change: Congratulations and thank you for your tremendous efforts to drive our business for the balance of the year. With that I'll hand it over to Tom.

Tom George: Thanks Mimi. We were pleased results for the quarter exceeded expectations.

Mimi Vaughn: Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear-wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots, and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys, updated brand positioning and tone of voice.

Tom George: Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside, given the cost reductions and sharey purchases we have made an overall leverage in our model. Turning to results and consolidated revenue for the quarter was $525 million, which was better than we anticipated and flowed through to better leverage. In addition, the journey stores we closed over the last year, which drove roughly 4% reduction in the size of our total fleet, resulted in improved overall productivity and had only a 1% net impact on total sales. The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business.

Speaker Change: to drive burning's pressure upside given the cost reductions in cherry purchases.

Speaker Change: We have made an overall leverage in our model.

Speaker Change: Turning to results.

Speaker Change: and Solidated Revenue for the Quarter was 525 million.

Speaker Change: which was better than we anticipated and flowed through to better leverage.

Speaker Change: In addition, the journey stores we closed over the last year which drove a roughly 4% reduction in the size of our total fleet resulted in improved overall productivity and had only a 1% net impact on total sales.

Speaker Change: The progress we've made in our digital business helped overcome the top-line pressure on our stores and wholesale business.

Tom George: Business. Total company comps were down 2%, which was a healthy sequential acceleration. By channel, total store comps were down 4%, while direct comps were up 8%, with digital sales accounting for 22% of total retail sales. Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journeys' gross margin was down 90 basis points, due primarily to product mix and a higher mix of e-con sales. She's gross margin decreased 210 basis points, driven mainly by increased promotional activity. Janine's gross margin was up 40 basis points due largely to a comparison against increased inventory reserves last year, partially offset by increased retail markdowns and a lower mix of DTC volume.

Speaker Change: Total company cops were down to percent, which was a healthy sequential acceleration.

Mimi Vaughn: Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. And to that end, we continue to optimize the store footprint, closing on productive stores and investing to meaningfully drive profitability in better locations. Sales recapture rates from these stores continue to exceed the level required to achieve break even.

Speaker Change: By channel, total store cops were down 4% while direct cops were up 8%.

Speaker Change: with digital sales accounting for 22% of toggle retail sales.

Speaker Change: Overall, adjusted Gross Margin was down 90 basis points compared to last year. By division, Journey's Gross Margin was down 90 basis points. You primarily do product mix in a higher mix of e-con sales.

Mimi Vaughn: Following a more challenging May and June receive of this product in time to kick off a strong back-to-school drove positive comms in July and higher ASPs with solid results in early back-to-school markets and over tax-free holidays. The comp trend improved further in August when we entered the third quarter as shoppers turned out in a bigger way during key back-to-school weeks. Importantly, store traffic nicely outpaced the broader market as it accelerated through the quarter, highlighting that journey's remains a key footwear destination.

Mimi Vaughn: Turning now to our outlook, we're very encouraged by the positive reaction to Journey's improved back to school assortment. And optimistic will be positioned to drive similar results for holiday. But in addition, we're taking a more cautious view for shoe and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full-year guidance.

Speaker Change: She has grossed March and decreased 210 basis points driven mainly by increased promotional activity.

James: James Grossmargin was up 40 basis points.

James: Do largely to a comparison against increased inventory reserves last year. Arsley Opset by increased retail markdowns and a lower mix.

Tom George: Lastly, Genesco brands' adjusted gross margin was down 20 basis points due primarily to brand sales mix shift. Moving down the PNL, SGNA expense was 48.6% of sales, leveraging 100 basis points over last year. The combination of our cost savings initiatives, closure of unproductive stores, and some improvement in the other expenses offset the increased variable expenses to support our direct sales growth, as well as additional selling salaries. In addition, expenses benefited from some one-time items, including a royalty reversal and a favorable pickup in certain non-income taxes. Finally, we experienced increased appreciation from our technology investments.

Mimi Vaughn: We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond.

James: of DTC volume. Lastly, Janesco Brands, adjusted gross margin, was down 20 basis points to primarily the brand sales mix shift.

James: Moving down the P&L, SG&A expense was 48.6 percent of sales.

James: Leveraging 100 basis points over last year.

James: the combination of our cost savings initiatives.

James: Closure of unproductive stores and some improvement in other expenses, offset the increased variable expenses to support our direct sales growth, as well as additional selling salaries.

Mimi Vaughn: Congratulations, and thank you for your tremendous efforts to drive our business for the balance of the year.

James: In addition, expenses benefited from some one-time items including a royalty reversal and a favorable pickup in certain non-income taxes.

Tom George: With that, I'll hand it over to Tom.

Tom George: Thanks, Mimi. We were pleased results for the quarter exceeded expectations, improve profitability and journeys in Genesco brands more than offset pressures in JNM and shoe. Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside, given the cost reductions and sharey purchases we have made an overall leverage in our model.

James: Finally, we experienced increased appreciation from our technology investments.

Tom George: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164, with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple of years, we will continue to be opportunistic to capture rent reductions as appropriate.

James: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives.

Mimi Vaughn: Q2 started off on a good note with pent-up demand from a late start to spring selling, but as summer kicked in with the higher cost of living, consumers were generally not motivated to make purchases in the footwear category and shoes seasonal assortment did not resonate to the level we expected. Like journeys, shoes customers have also been shifting away from vulcanized footwear. These pressures prompted shoes to increase promotional activity to clear slower moving product and match activity in the marketplace.

James: and Q2, we achieved a 9% reduction in straight line-run expense on 45 lease renewals across the company with an average term of approximately 4 years.

Tom George: Turning to results and consolidated revenue for the quarter was $525 million, which was better than we anticipated and flowed through to better leverage. In addition, the journey stores we closed over the last year, which drove roughly 4% reduction in the size of our total fleet, resulted in improved overall productivity and had only a 1% net impact on total sales. The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business.

James: This brings our year-to-date renewals to 164 with a 9% reduction in straight line rean expense.

James: With over 50% of our fleet coming up for renewal in the next couple of years, we will continue to be opportunistic to capture ramp reductions.

Tom George: In summary, for the second quarter, we incurred a better-than-expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year. This all resulted in an adjusted diluted loss per share of 83 cents for the quarter versus an adjusted diluted loss per share of 85 cents last year. The year-over-year improvement was driven by the shift of a key week of back to school and a Q2 from Q3, which added approximately 20 to 25 million dollars to the top line in roughly 40 cents to earnings per share. Turning now to capital allocation in the balance sheet, we ended the quarter in a net debt position of approximately $32 million, with clean inventories down 8% from last year.

James: as appropriate. In summary, for the second quarter we incurred a better than expected, adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year.

Mimi Vaughn: While this helped drive a sequential improvement in comps and kept inventories in good shape, it took a toll on growth margin in the quarter. E-com growth helped offset the weakness in stores and shoes digital business. A meaningful channel at almost 40 percent of sales remains a key avenue for driving growth and engagement. Despite the challenging backdrop, according to Cantar, shoe held its number 10 position in the youth shopper. Many of the brands and styles working at journeys are resonating at shoe for back to school and while demand remains muted, we expect less pressure on growth margin in this period given the cleaner inventory.

James: It's all resulted in an adjusted diluted loss per share of 83 cents for the quarter, versus an adjusted diluted loss per share of 85 cents last year.

Mimi Vaughn: The kids business remains the highlight outperforming the business as a whole for the quarter and during back to school to date. Looking ahead, the team is implementing several initiatives to improve the trend and sharpen its customer focus. These include efforts to gain even stronger access to the best brands and the in-demand product, putting in play its new customer segmentation based on its latest market research, revamping shoes, creative marketing content, accelerating finance for the shoe club loyalty program, which now represents nearly 35% of total sales and deploying new campaigns to drive higher loyalty point redemptions and sales.

Mimi Vaughn: Now turning to our branded business, starting with Johnston and Murphy, efforts to evolve and reimagine J&M as a more comfortable, more casual, multi-category lifestyle brand led to years of solid growth and success coming out of the pandemic. During this time, J&M drove footwear market share gains by growing both its physical and digital direct-to-consumer channels. However, the combination of robust 29% to year-stack comps and considerable softening in the men's premium, non-athletic footwear market, pressured sales, and calls for wear franchises like the Amherst 2.0 are resonating well, showing the great appetite for freshness and reinforcing beyond-going desire for innovation and distinctive product.

Speaker Change: Turning now to capital allocation in the balance sheet.

Speaker Change: We ended the quarter in a net debt position of approximately $32 million with clean

Tom George: Jerry's inventory was down 9%, leaving us well positioned for the fresh neighbor's seats we were bringing in through the back half. Overall, we planned to start building up our inventory level to drive sales.

Jerry: Down 8% from last year. Jerry's inventory was down 9%.

Jerry: Leaving us well positioned for the fresh neighbor seats we're bringing in through the back half.

Jerry: Over all we plan to start building up our inventory, level to drive sales.

Tom George: Looking at our financial flexibility, our strong balance sheet and free cash flow generation, combined with a revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives. Capital expenditures in Q2 were 8 million, with investments primarily directed to retail stores and our digital and on the channel initiatives. After a cycle of investment and digital and on the channel where we are currently getting the benefits, we are shifting the emphasis to refreshing our store base. Lastly, during the quarter, we were purchased almost 382,000 shares for $9.3 million for an average cost of $24.49 per share.

Jerry: Looking at our financial flexibility, our strong balance sheet, and free cash flow generation, combined with a revolving line of credit.

Jerry: Provide us with ample liquidity to pursue all our strategic.

Jerry: Objectives.

Jerry: Capital expenditures in Q2 were 8 million with investments primarily directed to retail stores and our digital and on-the-channel initiatives.

Jerry: After a cycle of investment in digital and on-michannel, where we are currently getting the benefits, we are shifting emphasis to refreshing our store-base.

Speaker Change: Lastly, during the quarter, we were purchased almost $382,000 for $9.3 million.

Tom George: We have $42.8 million remaining on our current authorization.

Speaker Change: for an average cost of $24.49 per share.

Speaker Change: We have 42.8 million dollars remaining on our current authorization.

Tom George: Over the past six years, we have repurchased nearly 50% of our outstanding shares. Looking at expense savings, we continued to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25. Before reinvestment, was savings from all divisions and across the entire organization. The initiatives include lowering occupancy costs and increasing selling salary productivity to improve store profitability. In addition, we are working on optimizing our inventory, marketing spend, warehouse, freight logistics costs, and other procurement efficiencies.

Speaker Change: Over the past six years, we have repurchased nearly 50% of our outstanding shares.

Tom George: Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164, with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple of years, we will continue to be opportunistic to capture rent reductions as appropriate.

Speaker Change: Looking at expensive savings, we continued to gain traction on our plan to reduce cost.

Speaker Change: by $45 to $50 million on an annualized basis by the end of fiscal $25. Before reinvestment was saving from all the visions and across the entire organization.

Speaker Change: The initiatives include lowering oximacy cost and increasing selling salary productivity to improve store profitability.

Speaker Change: In addition, we're working on optimizing our inventory marketing spend.

Speaker Change: Warehouse, Freight Logistics Cost.

Tom George: These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology. We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here to date we have closed 29 Journey stores, primarily wall-based locations. We continue to evaluate up to 50 potential journey closures in total this year. We expect these closures to eliminate approximately $14 million of annualized FGNA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores.

Speaker Change: and other procurement efficiencies.

Speaker Change: These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing.

Tom George: In summary, for the second quarter, we incurred a better-than-expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year. This all resulted in an adjusted diluted loss per share of 83 cents for the quarter versus an adjusted diluted loss per share of 85 cents last year. The year-over-year improvement was driven by the shift of a key week of back to school and a Q2 from Q3, which added approximately 20 to 25 million dollars to the top line in roughly 40 cents to earnings per share.

Speaker Change: and Technology.

Speaker Change: We hope in five stores.

Speaker Change: and closed 12 journey stores and in the quarter with 1,000 training and 14 total stores.

Speaker Change: Here's a date we've closed 29 journey stores, primarily mall-based locations.

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

Speaker Change: With respect these closures to eliminate approximately $14 million of annualized SGA cost.

Speaker Change: which is incremental to the roughly $25 million of annualized savings we realized from the stores we closed last year, and the $45 to $50 million of run rate savings we are targeting for this year.

Tom George: Turning now to capital allocation in the balance sheet, we ended the quarter in a net debt position of approximately $32 million, with clean inventories down 8% from last year. Jerry's inventory was down 9%, leaving us well positioned for the fresh neighbor's seats we were bringing in through the back half. Overall, we planned to start building up our inventory level to drive sales.

Tom George: We closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Tom George: Turning to guidance, although Q2 results are better than we expected, we continue to retain a cautious view and thus reiterate our most recent full year EPS outlook of $0.60 to $1. Before I walk through our assumptions, I'd like to quickly recap that, despite a challenging first half, our comp sales trends showed nice sequential improvement from Q1 to Q2, led by journeys, with overall comps turning positive in July. This momentum accelerated in August, driving comps further into positive territory, Q3 to date. Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journeys positioned to deliver a solid holiday season, as Mimi said.

Speaker Change: Now turning to guidance, although Q2 results for better than we expected, we continued to retain a cautious view and a such reiterate our most recent full-year EPS outlook of $0.60 to $1.

Speaker Change: Before I walk through our assumptions, I'd like to quickly recap that despite a challenging first half.

Speaker Change: or Comp Sales Trends.

Speaker Change: So nice sequential improvement from Q1AQ2. Let by journeys.

Speaker Change: with overall comps turning positive in July.

Speaker Change: This moment I'm accelerated in August, driving coms further in the positive territory Q3 to date.

Speaker Change: Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journeys positioned to deliver a solid holiday season, as Mimi said.

Tom George: However, as we've seen over the past couple of years, the peaks and valleys of consumer shopping patterns have gotten more pronounced, marked by higher peaks and deeper troughs. As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for J&M and Shoe, given their current trends and the uncertain operating environment, and expect that to offset the current strength at Journeys. In all, we expect Q3 comps to be up low single digits versus last year, with sales down slightly due to the 53rd week shift. For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in Q3, mostly due to IMO pressure from product mixed shift at Journeys and Shoe, and some increased levels of promotional activity at Shoe.

Mimi Vaughn: However, as we've seen over the past couple of years,

Tom George: We have $42.8 million remaining on our current authorization. Over the past six years, we have repurchased nearly 50% of our outstanding shares.

Mimi Vaughn: the peaks and valleys of consumer shopping patterns have gotten more pronounced.

Mark: Mark by higher peaks and deeper troughs.

Mark: As such, we expect trends to moderate over the remainder of Q3.

Tom George: Looking at expense savings, we continued to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25. Before reinvestment, was savings from all divisions and across the entire organization. The initiatives include lowering occupancy costs and increasing selling salary productivity to improve store profitability. In addition, we are working on optimizing our inventory, marketing spend, warehouse, freight logistics costs, and other procurement efficiencies. These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology.

Mark: In addition, we have adopted a more cautious view for JNM and Sue, given their current trends and the uncertain operating environment.

Mark: and expect that to offset the current strength at journeys. In all way expect key three cops to be up. Low single digits versus last year.

Mark: with sales down slightly due to the 53rd week shift.

Mark: for additional color we expect an overall gross margin decrease.

Mark: of approximately 60 to 80 basis points in Q3.

Mark: Mostly due to IMO pressure from product mixed shift at journeys and shoe and some increased levels of promotional activity at shoe.

Tom George: In addition, the sales decline on our largely fixed cost base will result in S-GNA delinerage of roughly 10 to 40 basis points, leading to earnings per share approximately 35 cents lower than Q3 last year. As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of Q3 and into Q2. Looking to Q4, we are assuming comps at a similar level to Q3. However, given the higher sales volumes in Q4, we are able to generate much more operating leverage on our expense structure to drive earnings. Taking this all into account for the year, we now expect higher sales and higher leverage, but more pressure and gross margin.

Speaker Change: in Adrytian.

Speaker Change: The sales decline on our largely fixed cost base.

Tom George: We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here to date we have closed 29 Journey stores, primarily wall-based locations. We continue to evaluate up to 50 potential journey closures in total this year. We expect these closures to eliminate approximately $14 million of annualized FGNA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores. We closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Speaker Change: will result in S.G.N.A.D. leverage of roughly 10 to 40 basis points.

Ernest Percher: Leading to Ernest Percher, approximately 35 cents lower than C3 last year.

Ernest Percher: As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of Q3 and into Q2.

Ernest Percher: Looking at Q4, we are assuming cops at a similar level, the Q3.

Ernest Percher: However, given the higher sales volumes in Q4, we are able to generate much more operating leverage on our expense structure to drive earnings.

Ernest Percher: Taking this all into account for the year we now expect higher sales and higher leverage, but more pressure and gross margin.

Tom George: Therefore, we now expect fiscal 25 total sales to decrease 1% to 2% or flat to down 1% when excluding the 53rd week last year versus our prior guidance for a total sales decrease of 2% to 3%. We now expect adjusted gross margin rates to be down 10 to 20 basis points for the year versus flat to up 10 basis points prior. Primarily due to product mix and the higher expected promotional activity, it's shoe, along with some product and channel mix pressure at Journey. As a percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points versus a range of flat to D leverage of 20 basis points prior.

Ernest Percher: Therefore, we now expect fiscal 25 total sales to decrease 1% to 2% or flat to down 1% when excluding the 53rd week last year versus our prior guidance.

Mimi Vaughn: J&M has responded by pulling forward new product launches like the Anders Sneaker program, fast tracking programs like the Upton Dreshoe program, and rethinking its future development calendar to find places to inject more innovation and newness much more frequently into the assortment. Another major opportunity is to build on the success of apparel and accessories which now represent almost half of its direct-to-consumer business. Woven shirts, blazers, bags, and wallets have all been standouts this year in our mission to step up J&M affluence customers' wardrobes, increase apparel purchase frequency, and outfit them with confidence from head to toe.

Ernest Percher: for a total sales decrease.

Ernest Percher: of 2% to 3%

Ernest Percher: We now expect a just digress margin rates to be down 10 to 20 basis points for the year versus flat up 10 basis points prior.

Ernest Percher: Primarily due to product mix and the higher expected promotional activity it's due, along with some product and channel mix pressure at journeys.

Mimi Vaughn: Finishing the branded discussion, we continue to achieve success with the repositioning of Genesco Brands Group. Efforts to simplify the license portfolio to emphasize key brands and channels, means lower sales in the short term, but more profit, which was evident once again in Q2 results, and we expect we'll be for the future. Moving back to journeys and its strategic growth plan, Andy Gray and team have made substantial progress on initiatives to rapidly accelerate dirty improvement and reinforce its leading market position for the longer term.

Ernest Percher: As a percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points.

Ernest Percher: versus a range of flat 2D leverage of 20 basis points prior.

Mimi Vaughn: Product advantages are at the forefront of this effort initially, but ultimately it's about elevating our product brand and experience and putting the customer at the center of everything we do. A critical component has been strengthening the leadership team which began with the addition of Andy, then a new chief merchant and a new leadership role for the SVP of strategy and transformation. Most recently we strengthened the team further with the addition of Stacey Doran as journey's new chief marketing officer and exceptional marketing leader Stacey joins the team following an accomplished career at Levi's.

Tom George: However, as we've seen over the past couple of years, the peaks and valleys of consumer shopping patterns have gotten more pronounced, marked by higher peaks and deeper troughs. As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for J&M and Shoe, given their current trends and the uncertain operating environment, and expect that to offset the current strength at Journeys. In all, we expect Q3 comps to be up low single digits versus last year, with sales down slightly due to the 53rd week shift. For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in Q3, mostly due to IMO pressure from product mixed shift at Journeys and Shoe, and some increased levels of promotional activity at Shoe.

Tom George: Our guidance assumes no additional sherry purchases, which results in fiscal 25 average shares outstanding of approximately 11 million, and we expect the tax rate to be approximately 27 percent.

Ernest Percher: Our guidance assumes no additional cherry purchases, which results in fiscal 25 average shares outstanding of approximately 11 million and we expect the tax rate to be approximately 27%.

Mimi Vaughn: We're excited for what her expertise and many achievements in consumer brand building will bring to journey's office. I'll take a moment now to share with you updates on other key initiatives. Number one, drive product leadership and create marketplace differentiation. Beyond successfully broadening our assortment and re-merchandizing our stores to put an even sharper focus on footwear, we've also completed extensive customer research and updated our segmentation. The outcome of that work has revealed significant upside to build on our unique proposition being the leading destination for the young fashion team and in particular the team girl.

Ernest Percher: To sum up, we're pleased with our progress at journeys and confident that the measures we're implementing will position the business for even stronger long-term growth.

Ernest Percher: Supporting that are the many other initiatives across our businesses that will collectively enable us to unlock considerable earnings potential, return to growth and create meaningful shareholder value.

Operator: Operator, please open the call for questions. Thank you. Well, now we are conducting a question and answer session. If you'd like to ask a question of this time, please press star one from your telephone keypad, and a confirmation tone indicate your lines in the question queue. You may press star two if you'd like to withdraw your question from the queue. From distance, they're using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

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

Speaker Change: Thank you. Well now we can do a few more questions and answer session. If you'd like to ask a question at this time please press star 1 from your telephone keypad and a confirmation tone indicate your lines in the question queue. You may press star 2 if you'd like to withdraw your question from the queue.

Speaker Change: from distance or using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, that's Star One. Thank you.

Mitch Kummetz: And our first question comes from the line of Mitch Cummins with C-Port Research.

Mitch Kummetz: Please just use your questions. Yes, thanks for taking my questions. I'm got a handful. I want to start with the third quarter guy. Tom, if I heard you correctly, I think you said you're expecting a low single-digit comp. Was that a consolidated comp? And if so, what kind of a journey comp is embedded in that? Yeah, Mitch, that is a consolidated comp and relative to journeys. Journeys is low single digits as well.

Speaker Change: Thank you in our first question, come to the line of Mitch Cummins with C-port research. Please use your questions.

Mitch Cummins: Yes, thanks for taking my questions.

Mitch Cummins: I'm going to start with the third quarter guy. Tom, if I heard you correctly.

Mitch Cummins: I think you said you're expecting a low single digit combat. Is that a consolidated cop and if so, what kind of a journey is cop is embedded in that?

Tom George: Yeah, Mitch, that is a consolidated comp and relative to journeys, journeys as low as single digits as well.

Mitch Kummetz: And then how are you thinking about September and October? It sounds like August has been a very good month for journeys. Meaning you talked about the pattern of shopping, the consumers are shopping peaks and kind of disappearing in between. Are you assuming the cost, you know, stays positive in September and October? Or does that kind of low single-digit journeys assume that you kind of go negative for the balance of the quarter?

Speaker Change: And then, how are you thinking about September and October? Sounds like August has been a very good month.

Speaker Change: for journeys. Mimi, you talked about the pattern of shopping, the consumer's or shopping peaks and kind of disappearing in between. Are you assuming the, you know, stays positive in September and October or does that kind of single-vigil journeys assume that, um,

Mimi Vaughn: Mitch, thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall, just in general, in the category. And a lot of interest with our youth consumer. And, you know, they've been quite interested in buying apparel. And typically when they're interested in buying apparel, they're then interested in buying footwear. And we couple that with journeys, much improved assortment. And we're going after a diversified assortment of brands and of styles and repositioning overall what we are offering. And that's been a good combination.

Speaker Change: that you kind of go negative for the balance of the quarter.

Speaker Change: Thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall just in general in the category. And a lot of interest with our youth consumer. And you know, they've been...

Speaker Change: Quite interested in buying a payroll and typically when they're interested in buying a payroll, they're then interested in buying footwear and we couple that with journeys, much improved the sortment and we're going after a diversified sortment of brands and of styles and in repositioning overall what we are offering and that's been a good combination and so as we said, we saw a nice pick up as we dropped new product that our agent teams been working hard to chase.

Mimi Vaughn: And so, as we said, we saw a nice pickup as we dropped a new product that our merchant team has been working hard to chase in July. And then that accelerated into August. We expect that we will continue to see positive comps because we do have that product that will drive, and that combination of consumer demand and having great product to serve the consumer will continue in September and October. But we also then thank the consumer; just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday.

Mimi Vaughn: This is an underserved consumer in the footwear space, while many retailers in the mall cater to young females with fashion apparel. Journeys is the only destination in footwear for her with an authentically inclusive environment and strong presence across categories and premium brands. The diversity of our footwear offering which is led by style versus any one category is our leadership position. Number two, build the journey's brand and enhance the omnie experience. This focuses on marketing and brand awareness to underscore journeys as a leading retail brand.

Speaker Change: in July, and then that accelerated into August, with respect that we will continue to see positive camps, because we do have that product that will drive and that combination of consumer demand and having great product to serve the consumer will continue into September and October, but we also then thank the consumer just pulls back and gets interested in other things.

Mimi Vaughn: Beginning with our store environment, we're executing parallel initiatives to first implement a visual refresh across all our stores and second, roll out in a small group of test stores and updated store concept with a modern aesthetic that embodies journey's useful useful attitude and energy. The fleetwide refresh gets underway in mid-Q3, highlighting journeys, footwear leadership and enhancing the in-store shopping experience with stronger visuals and storytelling. We plan to begin rolling out the updated store concept and next generation design in October.

Mimi Vaughn: Next, through our updated brand positioning and customer segmentation, we see considerable opportunity to both reach more consumers and better serve our current ones, meeting their needs for all footwear wearing occasions. We're already doing that with best sellers in running, sandals, clogs, boots and vulcanized styles. Over the next several months, we'll enhance how we market to these consumer segments through digital and social channels, delivering journeys updated brand positioning and tone of voice.

Operator: Operator, please open the call for questions. Thank you. Well, now we conducting a question and answer session. If you'd like to ask a question of this time, please press star one from your telephone keypad, and a confirmation tone indicate your lines in the question queue. You may press star two if you'd like to withdraw your question from the queue. From distance, they're using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

Mimi Vaughn: Number four, optimize to drive operational and cost efficiencies. These efforts aim to lower the leverage point on our fixed expense base. And to that end, we continue to optimize the store footprint, closing on productive stores, and investing to meaningfully drive profitability in better locations. Sales recapture rates from these stores continue to exceed the level required to achieve break even. Turning now to our outlook, we're very encouraged by the positive reaction to journeys improved back to school assortment.

Mimi Vaughn: And so it continues to be positive, to be pulling back. And then strengthen again as we get to the holiday period.

Mimi Vaughn: And then Mimi for holiday, I guess starting with back to school, it seems like you've had a lot of newness, particularly on the athletic side, which really feeds into back to school demand. But going into holiday, then it kind of shifts more towards boots and things like that. Do you feel like you've got enough newness on the boot side to maintain this more momentum, or do you just think that like the what you're doing on the athletic piece really just sort of carries forward into holiday as well, to drive the positive comp and for a key to Tom reference in the in the outlook.

Speaker Change: and then Mimi for a holiday, I guess starting with that school, it seems like you had a lot of newness.

Mimi Vaughn: particularly on the athletic side which really feeds into a back to school demand. But they're going in a holiday then it kind of shifts more towards.

Mimi Vaughn: And optimistic will be positioned to drive similar results for holiday. But in addition, we're taking a more cautious view for shoe and JNM over the remainder of the year. While we now expect higher sales in total, we're maintaining our full year guidance. We look forward to building on journeys momentum going forward to unlock the considerable growth and value here and across the rest of our company in fiscal 26 and beyond. Before passing the call, I'd like to give an extra special thank you to our incredible people.

Mitchel Kummetz: And our first question comes from the line of Mitch Cummins with C-Port Research. Please just use your questions.

Mimi Vaughn: Our unmatched ability to reinvent ourselves involves and grow over the years with a keen understanding of what our customer wants is our true competitive advantage. There's no better reminder of this than the celebration of our company's 100th anniversary this summer. Congratulations, and thank you for your tremendous efforts to drive our business for the balance of the year.

Mitchel Kummetz: Yes, thanks for taking my questions. I'm got a handful.

Speaker Change: Boots and things like that. Do you feel like you've got enough moonas on the boot side to maintain this more momentum or do you just think that like the what you're doing on your athletic piece really just sort of carries forward.

Tom George: I want to start with the third quarter guy. Tom, if I heard you correctly, I think you said you're expecting a low single-digit comp. Was that a consolidated comp? And if so, what kind of a journey comp is embedded in that?

Tom George: With that, I'll hand it over to Tom. Thanks, Mimi. We were pleased results for the quarter exceeded expectations, improve profitability and journeys in Genesco brands more than offset pressures in JNM and shoe. Looking ahead, getting back to positive constant journeys provides us with meaningful opportunity to drive earnings per share upside given the cost reductions and sharey purchases we have made an overall leverage in our model. Turning to results and solidated revenue for the quarter was $525 million which was better than we anticipated and flowed through to better leverage.

Speaker Change: into holiday as well to drive the positive compens for a queue that Tom referenced in the outlet.

Tom George: In addition, the journey stores we closed over the last year which drove roughly 4% reduction in the size of our total fleet resulted in improved overall productivity and had only a 1% net impact on total sales. The progress we've made in our digital business helped overcome the top line pressure on our stores and wholesale business. Business. Total company comps were down 2%, which was a healthy sequential acceleration. By channel, total store comps were down 4%, while direct comps were up 8%, with digital sales accounting for 22% of total retail sales.

Mimi Vaughn: Sure, Mitch, what's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side. And so it is not just one brand; it really is a variety of brands. And in fact, we saw strength and even more brands than we had anticipated for back to school. So it's a few brands certainly on the athletic side. And athletic is where we have strength in the most. You write about that. But also on what we call the casual side, we have seen some nice strengths. The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals in summer, you know, we're athletic year-round and then boots in the winter.

Tom George: Overall, adjusted gross margin was down 90 basis points compared to last year. By division, journeys gross margin was down 90 basis points, due primarily to product mix and a higher mix of e-con sales. She's gross margin decreased 210 basis points, driven mainly by increased promotional activity. Janine's gross margin was up 40 basis points due largely to a comparison against increased inventory reserves last year, partially offset by increased retail markdowns and a lower mix of DTC volume.

Speaker Change: Sure, Mitch, what's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side.

Tom George: Lastly, Genesco brands adjusted gross margin was down 20 basis points due primarily to brand sales mix shift. Moving down the PNL, SGNA expense was 48.6% of sales leveraging 100 basis points over last year. The combination of our cost savings initiatives, closure of unproductive stores and some improvement in the other expenses offset, the increased variable expenses to support our direct sales growth, as well as additional selling salaries. In addition, expenses benefited from some one-time items including a royalty reversal and a favorable pickup in certain non-income taxes.

Tom George: Yeah, Mitch, that is a consolidated comp and relative to journeys. Journeys is low single digits as well.

Speaker Change: and so it is not just one brand, it really is a variety of brands and in fact we saw strength and even more brands than we had anticipated for back to school.

Mitchel Kummetz: And then how are you thinking about September and October? It sounds like August has been a very good month for journeys. Meaning you talked about the pattern of shopping; the consumers are shopping peaks and kind of disappearing in between.

Mitchel Kummetz: Are you assuming the cost, you know, stays positive in September and October? Or does that kind of low single-digit journeys assume that you kind of go negative for the balance of the quarter?

Speaker Change: The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals and summer, you know, wear athletic gear round and then boots in the winter. Seems like there's more carry through a product. And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday but will also lean across all those brands and all those styles that are resonating. And so, you know, we've talked with you about how the boot category specifically has, you know, has been declining over the past few years. We're not expecting boots to pick up.

Tom George: Finally, we experienced increased appreciation from our technology investments. Optimizing our store fleet to reduce occupancy cost and fixed expense levels in the store channel remains one of our key financial objectives. In Q2, we achieved a 9% reduction in straight line run expense on 45 lease renewals across the company with an average term of approximately four years. This brings our year-to-date renewals to 164 with a 9% reduction in straight line run expense. With over 50% of our fleet coming up for renewal in the next couple years, we will continue to be opportunistic to capture rent reductions as appropriate.

Mimi Vaughn: Mitch, thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall, just in general, in the category. And a lot of interest with our youth consumer. And, you know, they've been quite interested in buying apparel. And typically when they're interested in buying apparel, they're then interested in buying footwear. And we couple that with journeys, much improved assortment. And we're going after a diversified assortment of brands and of styles and repositioning overall what we are offering. And that's been a good combination.

Mimi Vaughn: It seems like there's more carry-through of product. And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating. And so you've talked with you about how the boot category specifically has been declining over the past few years. We're not expecting boots, let's say, to pick up, but we are seeing some green shoots across some boot brands. And so if that comes and gets some traction, then that'll be additive to where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter.

Speaker Change: But we are seeing some green shoes.

Speaker Change: Across some boot brands, and so if that comes and gets some traction, then that'll be added to it.

Mimi Vaughn: And so, as we said, we saw a nice pickup as we dropped a new product that our merchant team has been working hard to chase in July. And then that accelerated into August. We expect that we will continue to see positive comps because we do have that product that will drive and that combination of consumer demand and having great product to serve the consumer will continue in September and October. But we also then thank the consumer; just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday.

Speaker Change: To where we are but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter and we do believe that we have a product to back up the comps that we're expecting for holiday.

Mimi Vaughn: And we do believe that we have the product to back up the comps that we're expecting for holiday.

Mimi Vaughn: And then maybe you mentioned in your prepared remarks, this opportunity to better serve the team, curl, consumer. Can you just elaborate on that? How much of that is, again, like further tweaking the assortment versus maybe doing a better job marketing to that consumer, and that from an assortment standpoint, obviously there are lead times to how quickly can you make adjustments in order to better serve that consumer. Sure, Mitch, so it's all of the above in terms of what you're talking about. If you think about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that male, that boy customer with athletic product.

Speaker Change: and then maybe you mentioned in your prepared remarks this opportunity to better serve the team, Coral.

Speaker Change: Consumer, can you just elaborate on that? How much of that is, again, like, further tweaking the assortment versus maybe doing a better job, marketing to that consumer, and that's from an assortment standpoint, obviously, there will lead times.

Mimi Vaughn: And so it continues to be positive, to be pulling back. And then strengthen again as we get to the holiday period.

Speaker Change: So how quickly can you make adjustments in order to better serve that consumer?

Tom George: In summary, for the second quarter, we incurred a better than expected adjusted operating loss of 9.3 million compared to an adjusted operating loss of 10 million for Q2 last year. This all resulted in an adjusted deluded loss per share of 83 cents for the quarter versus an adjusted deluded loss per share of 85 cents last year. The year-over-year improvement was driven by the shift of a key week of back to school and a Q2 from Q3, which added approximately 20 to 25 million dollars to the top line in roughly 40 cents to earnings per share.

Tom George: Turning now to capital allocation in the balance sheet, we ended the quarter in a net debt position of approximately $32 million with clean inventories down 8% from last year. Jerry's inventory was down 9%, leaving us well positioned for the fresh neighbor's seats we were bringing in through the back half. Overall we planned to start building up our inventory level to drive sales. Looking at our financial flexibility, our strong balance sheet and free cash flow generation, combined with a revolving line of credit, provide us with ample liquidity to pursue all our strategic objectives.

Mimi Vaughn: And our ability to serve that team across that diversified assortment of both athletic and of casual for whatever your wearing occasions are. And girls are wearing athletic; they're slipping into sandals; they're wearing athletic across lots of brands. I mean, we've seen coming away from vulcanized that the concentration within a couple of brands has proliferated. And more options is better for us; more ability to serve the customer is better for us. We are more female than we are male today. We traditionally have been serving the female consumer well, but we are doubling down on that. We've done a battery of research that allowed us to do even more refined segmentation around our customer group.

Mimi Vaughn: Sure, Mitch, what's interesting is that what we've seen resonating for back to school is not just athletic, but it's also on our casual side. And so it is not just one brand; it really is a variety of brands. And in fact, we saw strength and even more brands than we had anticipated for back to school. So it's a few brands certainly on the athletic side. And athletic is where we have strength in the most. You write about that. But also on what we call the casual side, we have seen some nice strengths. The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals in summer. You know, we're athletic year round and then boots in the winter.

Speaker Change: We traditionally had been serving the female consumer well, but we are doubling down on that we've done a battery of research that's allowed us to do even more refined segmentation around our customer group and so youre going to see a real change in our overall marketing to the consumer.

Mimi Vaughn: And so you're going to see a real change in our overall marketing to the consumer. You're going to see some real emphasis within our stores. To cater to that female customer, you're going to see an elevation of our assortment. You're going to see just the premium nature of our brand through because we've gotten that feedback that we can really deliver to the customer on that space. And she's looking for it. It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while. And we have been working on the assortment to be able to deliver on that vision.

Where you're going to see some real emphasis within our stores to cater to that that female customer youre going to see an elevation of our assortment youre going to see just a premium nature of our brands through because we've gotten that feedback that we can we can really deliver to the customer on that.

Mimi Vaughn: It seems like there's more carry-through of product.

Mimi Vaughn: And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating. And so you've talked with you about how the boot category specifically has been declining over the past few years. We're not expecting boots, let's say, to pick up, but we are seeing some green shoots across some boot brands. And so if that comes and gets some traction, then that'll be additive to where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter.

Speaker Change: Space and she is looking for it it's based the white space in the market that we are jumping into and so this is something we've been talking about for a while and we have been working on the assortment to be able to deliver on on that vision and so it's a complete picture of starting with product.

Adding marketing, having a great store environment getting out there on social speaking to that customer letting her know that we're the place.

Speaker Change: When she thinks about coming in buying her fashion footwear and it's not just the female that we're talking about but we do think leading with a female we will open up the aperture for our customers. We are serving today and certainly welcome anybody who wants to come shop in our journeys stores.

Mimi Vaughn: And we do believe that we have the product to back up the comps that we're expecting for holiday.

Mimi Vaughn: And then my last question, just on the stores: you talked about a refresh starting in 3Q. Is that going to be complete before the holiday season really kicks in? And then, as far as the updated concept is concerned, and he just reminds us like what's really different there versus the rich versus the current box, and like when do you expect to have that test done, and what might our rollout look in terms of taking that to more doors? So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores, and it's going to be a lot with visuals; it's going to be a lot with how we merchandise within the stores.

Speaker Change #100: And then my last question just on the stores you talked about a refresh starting in <unk>.

Speaker Change #101: Is that going to be complete before the holiday season really kicks in and then as far as the updated.

Speaker Change #102: Concept is concerned can you just remind us.

Speaker Change #103: What's really different there versus the euro.

Speaker Change #103: Versus the current box.

Speaker Change #104: Like when do you expect to have that test done and like.

Speaker Change #105: What might a rollout look in terms of.

Mimi Vaughn: Sure, Mitch, so it's all of the above in terms of what you're talking about. If you think about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that male, that boy customer with athletic product. And our ability to serve that team across that diversified assortment of both athletic and of casual for whatever your wearing occasions are. And girls are wearing athletic; they're slipping into sandals; they're wearing athletic across lots of brands. I mean, we've seen coming away from vulcanized that the concentration within a couple of brands has proliferated.

Speaker Change #106: In terms of thinking about some more doors.

Speaker Change #106: Okay.

Speaker Change #107: The refresh that we're talking about starting in Q3 will touch all of our stores and it's going to be a lot with visuals, it's going to be a lot with how we merchandise within the stores, we started a little bit of that but this will be a rollout across the entire footprint and that will be.

Mimi Vaughn: We've started a little bit of that, but this will be a rollout across the entire footprint, and that will be completed before holiday kicks in. We're taking advantage of that period between back to school and holiday, and its visuals as you walk in the store, it's the placement of product within the store, it's the things that we can get done in a pretty immediate and pretty impactful fashion. Then in terms of what's really different in terms of the new concept versus the current box, I think you've known our Journey store for a long time and I would say that it's been more of an evolution than a revolution. This new concept is going to be really different and it is going to absolutely highlight the product; it's going to put us in a position where we'll have more flexibility and more functionality, but that we can highlight our brand partners, we can speak to the product, we can speak to our customer. We'll have flexibility of being able to do it in this new box and yet it will at the same time keep that great youth energy and that excitement that Journeys is all about.

Speaker Change #107: Completed before holiday kicks in and we're taking advantage of that period between back to school and holiday and its visuals as you walk in the store is.

The placement of product within the store is it's those things that we can get done in a pretty immediate and pretty impactful fashion fashion.

Mimi Vaughn: And more options is better for us; more ability to serve the customer is better for us. We are more female than we are male today. We traditionally have been serving the female consumer well, but we are doubling down on that. We've done a battery of research that allowed us to do even more refined segmentation around our customer group. And so you're going to see a real change in our overall marketing to the consumer. You're going to see some real emphasis within our stores. To cater to that female customer, you're going to see an elevation of our assortment.

Speaker Change #108: And then in terms of well, what's really different in terms of the new concept versus the current box I think you have you've known our journeys store for a long time and I would say that it's been more of an evolution.

Speaker Change #108: Then a revolution and this new concept is going to be really different and it is going to absolutely highlight the product it's going to put us in a position, where we'll have more flexibility and more functionality, but that we can highlight our brand partners. We can speak to the product we can speak to our.

Speaker Change #108: Tomorrow, we will have flexibility of being able to do it.

Speaker Change #108: And in this in this new box and yet it will at the same time keep that great use of energy and that excitement that journeys is all about.

Mimi Vaughn: You're going to see just the premium nature of our brand through because we've gotten that feedback that we can really deliver to the customer on that space. And she's looking for it. It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while. And we have been working on the assortment to be able to deliver on that vision.

Mimi Vaughn: The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October, and we're starting in the big volume locations where we know we can drive productivity and the impact. And so we will test as we go along, and not only are we putting in place a new look of the store, but we are combining that with better marketing, with better social, with increased merchandising, and so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to. And so we're going to test that, and we're going to roll it as we get the results, and then we'll go from there.

At the beginning we're going to rollout to a handful of stores to begin with as we said starting in October and we're starting and the big volume locations, where we know we can drive productivity and the impact and so we will test as we go along and not only are we putting in place a new.

Speaker Change #108: You look of the store, but we are clear.

Speaker Change #108: We're combining that with better marketing with better social with with increased merchandising and so it's going to be a full picture a full 360 picture to be able to speak to the customer that we're trying to appeal to and so we're going to test that and we're going to roll it as we do.

Speaker Change #108: Get the results and and then we'll go from there.

Mimi Vaughn: Great thanks, good luck. Thank you.

Tom George: Capital expenditures in Q2 were 8 million, with investments primarily directed to retail stores and our digital and on the channel initiatives. After a cycle of investment and digital and on the channel where we are currently getting the benefits, we are shifting the emphasis to refreshing our store base. Lastly during the quarter we were purchased almost 382,000 shares for $9.3 million for an average cost of $24.49 per share. We have $42.8 million remaining on our current authorization.

Speaker Change #109: Great. Thanks, Good luck.

Speaker Change #109: Thank you.

Speaker Change #111: Thank you.

Operator: If you'd like to ask a question, you may press star one at this time.

Speaker Change #112: I'd like to ask a question you May press star one at this time.

Tom George: Over the past six years we have repurchased nearly 50% of our outstanding shares. Looking at expense savings, we continued to gain traction on our plan to reduce cost by $45 to $50 million on an annualized basis by the end of fiscal 25. Before reinvestment was savings from all divisions and across the entire organization. The initiatives include lowering occupancy costs and increasing selling salary productivity to improve store profitability. In addition we are working on optimizing our inventory, marketing spend, warehouse, freight logistics costs, and other procurement efficiencies.

Montero Moreno: The next question today comes from the line of Montero Moreno cheek, which Jeffries. This is your question. Hello and thanks for taking my call today. Get too quick one for me. First one is Jeffs.

Speaker Change #113: Next question today comes from the line of Montero Moran Akshay <unk> with Jefferies. Please proceed with your questions.

Tom George: These actions to reshape our cost structure are designed to strengthen the economics of our store channel and enable investment in other strategic areas such as marketing and technology. We open five stores and close 12 journey stores and in the quarter with 1,314 total stores. Here to date we have closed 29 journey stores, primarily wall-based locations. We continue to evaluate up to 50 potential journey closures in total this year. We expect these closures to eliminate approximately $14 million of annualized FGNA cost, which is incremental to the roughly $25 million of annualized savings we realized from the stores. We closed last year and the $45 to $50 million of run rate savings we are targeting for this year.

Hello, and thanks for taking my call today.

Speaker Change #114: Just two quick ones for me.

Geoff: First one Geoff.

Montero Moreno: I think last one we talked about, Jonathan Murphy marketing, and it was like not your father's shoe, so just anything else, so you're thinking about some marketing for JNM and just put around the brands in your company. Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Jonathan Murphy, and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer. I know that we pivoted hard into casual and comfortable styles, and traditionally, Jonathan Murphy has been known for wingtips and captoes. But we did a lot coming out of the pandemic to absolutely reposition the assortment, and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear.

Last quarter, we talked about John Murphy marketing not your fault issue. So just anything else or are you sticking with the marketing.

GM: For GM and just.

Mimi Vaughn: So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores, and it's going to be a lot with visuals; it's going to be a lot with how we merchandise within the stores. We've started a little bit of that, but this will be a rollout across the entire footprint, and that will be completed before holiday kicks in. We're taking advantage of that period between back to school and holiday, and its visuals as you walk in the store, it's the placement of product within the store, it's the things that we can get done in a pretty immediate and pretty impactful fashion.

GM: When your company.

Montero: Good morning, Montero are we have been pleased with the results of our new brand marketing campaign for Johnston <unk> Murphy and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer I know.

Montero: You know that we pivoted hard into casual and comfortable styles and traditionally Johnston <unk> Murphy has been known for Wingtips and captors, but we did a lot coming out of the pandemic to absolutely reposition the assortment and we need to let the customer know about this and also know about the great.

Mimi Vaughn: Then in terms of what's really different in terms of the new concept versus the current box, I think you've known our Journey store for a long time and I would say that it's been more of an evolution than a revolution. This new concept is going to be really different and it is going to absolutely highlight the product; it's going to put us in a position where we'll have more flexibility and more functionality, but that we can highlight our brand partners, we can speak to the product, we can speak to our customer. We'll have flexibility of being able to do it in this new box and yet it will at the same time keep that great youth energy and that excitement that Journeys is all about.

Montero: Technology and the features that we have built into our footwear. In addition to that we've grown categories outside of footwear and comprise.

Mimi Vaughn: In addition to that, we've grown categories outside of footwear, and it comprises almost half of what we're selling in our DTC channels today. And so getting the word out has been really, really important. We have found that our awareness for our Jonathan Murphy customer is lower than we'd like it to be, so the brand marketing is directed at updating the consumer to know the latest with Jonathan Murphy and then also being able to build out awareness for customers who are similar to the ones who already shop with us.

Montero: Comprises almost half of what we're selling in our DTC channels today, and so getting the word out has been really really important we have found that our awareness for our Johnston <unk> Murphy customer is lower than we'd like it to be so that brand marketing is directed at.

Montero: Updating the consumer to know the latest with Johnston <unk> Murphy and then also being able to build out awareness for our customers, who are who are similar to the ones who already shop with us but.

Mimi Vaughn: But I don't necessarily know about Jonathan Murphy. What is important right now is newness, new products, and new franchises, and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer. There's a real opportunity for innovation and more distinctive product, and so it's not just marketing that is going to make a difference and drive sales going forward, but it is also the great product and the great product stories that we'll tell with that marketing.

Montero: But but but don't necessarily know about about Johnston <unk> Murphy.

Mimi Vaughn: The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October, and we're starting in the big volume locations where we know we can drive productivity and the impact. And so we will test as we go along, and not only are we putting in place a new look of the store, but we are combining that with better marketing, with better social, with increased merchandising, and so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to. And so we're going to test that, and we're going to roll it as we get the results, and then we'll go from there.

Speaker Change #118: What is important right now is newness, new products and new franchises and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer is a real opportunity for innovation and more distinctive product and so it's not just market.

Speaker Change #119: <unk> that is going to make a <unk>.

Speaker Change #119: Difference and drive sales going forward, but it is also the great product and a great product stories that will tell with that marketing.

Montero Moreno: Thank you.

Mimi Vaughn: Jonathan, also just on what brands would you say are not brand, or what would you say is a great trend that we should be looking forward to for the back to cool season right now. Yeah, so it's a good question, and I can't tell all our secrets. You'll have to come in our store to check it out, but the theme of the day is diversification and great interest, and I said it to Mitch. But what is exciting right now is that the customer is really enthusiastic about footwear, and we've seen that in overall traffic patterns for the category.

Speaker Change #119: Thank you and then.

Speaker Change #120: Uh huh.

Okay.

Speaker Change #120: One.

Speaker Change #120: What.

Speaker Change #120: Rand would you say.

Speaker Change #120: Great.

Speaker Change #120: What would you say.

Mitchel Kummetz: Great thanks, good luck. Thank you.

Speaker Change #120: A great trend that we should be looking for would you put the Mexico season.

Tom George: Turning to guidance, although Q2 results are better than we expected, we continue to retain a cautious view and such reiterate our most recent full year EPS outlook of $0.60 to $1. Before I walk through our assumptions, I'd like to quickly recap that despite a challenging first half, our comp sales trends showed nice sequential improvement from Q1 to Q2, led by journeys with overall comps turning positive in July. This momentum accelerated in August, driving comps further into positive territory, Q3 to date.

Operator: If you'd like to ask a question, you may press star one at this time.

Right now.

Yeah. So it's a good question and I can't tell all our secrets, you'll have to come in our store to check it out but.

Tom George: Given this progress, we remain optimistic that our assortment and consumer engagement initiatives have journeys positioned to deliver a solid holiday season, as Mimi said. However, as we've seen over the past couple years, the peaks and valleys of consumer shopping patterns have gotten more pronounced, marked by higher peaks and deeper troughs. As such, we expect trends to moderate over the remainder of Q3. In addition, we have adopted a more cautious view for J&M and Shoe, given their current trends and the uncertain operating environment, and expect that to offset the current strength at journeys.

Mantero Moreno: The next question today comes from the line of Montero Moreno cheek, which Jeffries. This is your question.

Tom George: In all, we expect Q3 comps to be up low single digits versus last year, with sales down slightly due to the 53rd week shift. For additional color, we expect an overall gross margin decrease of approximately 60 to 80 basis points in Q3, mostly due to IMO pressure from product mixed shift at journeys and Shoe, and some increased levels of promotional activity at Shoe. In addition, the sales decline on our largely fixed cost base will result in S-GNA delinerage of roughly 10 to 40 basis points, leading to earnings per share approximately 35 cents lower than Q3 last year.

Tom George: As I mentioned earlier, the timing of back-to-school sales shifted approximately 40 cents of earnings per share out of Q3 and into Q2. Looking to Q4, we are assuming comps at a similar level to Q3. However, given the higher sales volumes in Q4, we are able to generate much more operating leverage on our expense structure to drive earnings. Taking this all into account for the year, we now expect higher sales and higher leverage, but more pressure and gross margin.

Mantero Moreno: Hello and thanks for taking my call today. Get too quick one for me. First one is Jeffs. I think last one we talked about, Jonathan Murphy marketing, and it was like not your father's shoe, so just anything else, so you're thinking about some marketing for JNM and just put around the brands in your company.

Speaker Change #121: The theme of the day is diversification and and great interest and I said it to match, but what is exciting right now is that the customers really enthusiastic about about footwear and we've seen that in overall traffic patterns for the category.

Tom George: Therefore, we now expect fiscal 25 total sales to decrease 1% to 2% or flat to down 1% when excluding the 53rd week last year versus our prior guidance for a total sales decrease of 2% to 3%. We now expect adjusted gross margin rates to be down 10 to 20 basis points for the year versus flat to up 10 basis points prior. Primarily due to product mix and the higher expected promotional activity, it's shoe, along with some product and channel mix pressure at journey, as a percentage of sales, we now expect SGNA in the range of flat to leverage of 20 basis points versus a range of flat to D leverage of 20 basis points prior. Our guidance assumes no additional sherry purchases, which results in fiscal 25 average shares outstanding of approximately 11 million and we expect the tax rate to be approximately 27 percent.

Mimi Vaughn: But journey's traffic has really outstripped the overall category benchmark, and so there's a lot of just interest in footwear. I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation, and our brands didn't offer a lot of innovation, and that innovation is hitting now, and it's not just interest in one brand. It's not just interest in athletic or in non-athletic product. It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price has also gone up, ticked up pretty significantly with the new assortment that we are selling, which is more premium product at higher price points.

Speaker Change #121: But journey as traffic has really outstripped the overall.

Mimi Vaughn: Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Jonathan Murphy, and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer. I know that we pivoted hard into casual and comfortable styles, and traditionally, Jonathan Murphy has been known for wingtips and captoes. But we did a lot coming out of the pandemic to absolutely reposition the assortment, and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear.

Speaker Change #121: Category benchmark and so there's a lot of just interest in footwear and I think that over time. We've spent a lot of time discussing the fact that that during the pandemic. We didn't offer a lot of innovation in our brands and offer a lot of innovation and that innovation is heading.

Operator: Operator, please open the call for questions. Thank you. Well now we conducting a question and answer session. If you'd like to ask a question of this time, please press star one from your telephone keypad and a confirmation tone indicate your lines in the question queue. You may press star two if you'd like to withdraw your question from the queue. From distance, they're using speaker equipment. It may be necessary to pick up your handset before pressing the star keys. Once again, that's star one. Thank you.

Speaker Change #121: Now and it's not just interest in one brand, it's not just interest in athletic or in non athletic product, it's really interest across the board in a number of brands in a number of styles. What is good for US is that average selling price is also has also gone up ticked up pretty significantly with the new.

Speaker Change #121: Assortment that we are selling which is more premium product at higher price points and so there is interest across a number of different brands. There is still a move away from Vulcanize product, which was represented by a couple of our strong brands in particular, but Tom Vulcanize role.

Mitch Kummetz: And our first question comes from the line of Mitch Cummins with C-Port Research.

Mimi Vaughn: There's interest across a number of different brands. There's still a move away from vulcanized product, which was represented by a couple of strong brands in particular, but vulcanized will always be part of our assortment, and we will continue to offer newness that comes along with vulcanized. But the great trend right now is a lot of interest and a lot of diversification and better price points as a result of all of that.

Speaker Change #121: I'll always be part of our assortment and we.

Speaker Change #121: We will continue to offer newness that comes along with Balkanized, but the great trend right. Now is a lot of interest and a lot of diversification and better price points as a result of all of that.

Speaker Change #121: Yeah.

Mimi Vaughn: Thank you, thank you, thank you. At this time, I'd like to turn the flow right to measure for further remarks. Great, thank you for joining us today, and we look forward to speaking to you on our third quarter earnings call. Right, thank you. This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Never thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you.

Speaker Change #122: Thank you.

Speaker Change #122: <unk>.

Speaker Change #123: At this time I'd like to turn the floor back to measure for further remarks.

Speaker Change #124: Great. Thank you for joining us today, and we look forward to speaking to you on our third quarter earnings call Alright. Thank you.

This will conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation and have a wonderful day.

Mantero Moreno: Thank you.

Mimi Vaughn: Jonathan, also just on what brands would you say are not brand, or what would you say is a great trend that we should be looking forward to for the back to cool season right now. Yeah, so it's a good question, and I can't tell all our secrets. You'll have to come in our store to check it out, but the theme of the day is diversification and great interest. I said it to Mitch, but what is exciting right now is that the customer is really enthusiastic about footwear, and we've seen that in overall traffic patterns for the category.

Mimi Vaughn: Mitch, thanks for joining us this morning. We are really excited about what we are seeing in journeys. What is different now is that there is more interest in footwear overall, just in general, in the category. And a lot of interest with our youth consumer. And, you know, they've been quite interested in buying apparel. And typically when they're interested in buying apparel, they're then interested in buying footwear. And we couple that with journeys, much improved assortment.

Mimi Vaughn: But journey's traffic has really outstripped the overall category benchmark, and so there's a lot of just interest in footwear. I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation, and our brands didn't offer a lot of innovation, and that innovation is hitting now, and it's not just interest in one brand. It's not just interest in athletic or in non-athletic product. It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price has also gone up, ticked up pretty significantly with the new assortment that we are selling, which is more premium product at higher price points.

Mimi Vaughn: And we're going after a diversified assortment of brands and of styles and repositioning overall what we are offering. And that's been a good combination. And so as we said, we saw a nice pickup as we dropped a new product that our merchant team has been working hard to chase in July. And then that accelerated into August. We expect that we will continue to see positive comps because we do have that product that will drive and that combination of consumer demand and having great product to serve the consumer will continue in September and October.

Mimi Vaughn: But we also then thank the consumer just pulls back and gets interested in other things. We then again think about holiday and being able to pursue demand during those peak weeks leading into holiday. And so it continues to be positive, to be pulling back. And then strengthen again as we get to the holiday period.

Mimi Vaughn: You write about that. But also on what we call the casual side, we have seen some nice strengths. The category in particular, it seems like consumers have gone more to seasonless style, whereas they used to shift to sandals in summer, you know, we're athletic year round and then boots in the winter. It seems like there's more carry-through of product. And so we've read through all of that and have leaned into an assortment that will be more athletically oriented for holiday, but will also lean across all those brands and all those styles that are resonating.

Mimi Vaughn: And so you've talked with you about how the boot category specifically has been declining over the past few years. We're not expecting boots, let's say to pick up, but we are seeing some green shoots across some boot brands. And so if that comes and gets some traction, then that'll be additive to where we are, but it's really looking through the assortment today and saying what's going to resonate in the fourth quarter. And we do believe that we have the product to back up the comps that we're expecting for holiday.

Mimi Vaughn: But the great trend right now is a lot of interest and a lot of diversification, and better price points as a result of all of that.

Mimi Vaughn: And then maybe you mentioned in your prepared remarks, this opportunity to better serve the team, curl, consumer. Can you just elaborate on that? How much of that is, again, like further tweaking the assortment versus maybe doing a better job marketing to that consumer and that from an assortment standpoint, obviously there are lead times to how quickly can you make adjustments in order to better serve that consumer. Sure, Mitch, so it's all of the above in terms of what you're talking about.

Mimi Vaughn: At this time, I'd like to turn the floor right to measure for further remarks. Great, thank you for joining us today, and we look forward to speaking to you on our third-quarter earnings call.

Mimi Vaughn: If you think about about the competition that serves the team customer, there are lots of great competitors out there who do a terrific job, particularly serving that male, that boy customer with athletic product. And our ability to serve that team across that diversified assortment of both athletic and of casual for whatever your wearing occasions are. And girls are wearing athletic, they're slipping into sandals, they're wearing athletic across lots of brands. I mean, we've seen coming away from vulcanized that the concentration within a couple of brands has has proliferated.

Mimi Vaughn: And more options is better for us, more ability to serve the customer is better for us. We are more female than we are male today. We traditionally have been serving the female consumer well, but we are doubling down on that. We've done a battery of research that allowed us to do even more refined segmentation around our customer group. And so you're going to see a real change in our overall marketing to the consumer.

Mimi Vaughn: Right, thank you.

Mimi Vaughn: You're going to see some real emphasis within our stores. To cater to that female customer, you're going to see an elevation of our assortment. You're going to see just the premium nature of our brand through because we've gotten that feedback that we can really deliver to the customer on that space. And she's looking for it. It's the white space in the market that we are jumping into. And so this is something we've been talking about for a while.

Operator: This will conclude today's conference. You made disconnect your lines this time. Thank you for your participation for joining us today. Thank you for joining us today.

Mimi Vaughn: And we have been working on the assortment to be able to deliver on that vision. And so it's a complete picture of starting with product, adding marketing, having a great store environment, getting out there on social, speaking to that customer, letting her know that we're the place when she thinks about coming and buying her fashion footwear. And it's not just the female that we're talking about, but we do think leading with the female, we will open up the aperture for customers we aren't serving today. And certainly welcome anybody who wants to come shop in our tourney store.

Mimi Vaughn: And then my last question, just on the stores, you talked about a refresh starting in 3Q. Is that going to be complete before the holiday season really kicks in? And then as far as the updated concept is concerned, and he just reminds us like what's really different there versus the rich versus the current box and like when do you expect to have that test done and what might our rollout look in terms of taking that to more doors?

Mimi Vaughn: So Mitch, the refresh that we're talking about starting in Q3 will touch all of our stores and it's going to be a lot with visuals, it's going to be a lot with how we merchandise within the stores. We've started a little bit of that but this will be a rollout across the entire footprint and that will be completed before holiday kicks in, we're taking advantage of that period between back to school and holiday and its visuals as you walk in the store, it's the placement of product within the store, it's the things that we can get done in a pretty immediate and pretty impactful fashion.

Mimi Vaughn: Then in terms of what's really different in terms of the new concept versus the current box, I think you've known our journey store for a long time and I would say that it's been more of an evolution than a revolution and this new concept is going to be really different and it is going to absolutely highlight the product, it's going to put us in a position where we'll have more flexibility and more functionality but that we can highlight our brand partners, we can speak to the product, we can speak to our customer, we'll have flexibility of being able to do it in this new box and yet it will at the same time keep that great youth energy and that excitement that Journeys is all about. The beginning, we're going to roll out to a handful of stores to begin with as we said starting in October and we're starting in the big volume locations where we know we can drive productivity and the impact and so we will test as we go along and not only are we putting in place a new look of the store but we are combining that with better marketing with better social with increased merchandising and so it's going to be a full picture, a full 360 picture to be able to speak to the customer that we're trying to appeal to and so we're going to test that and we're going to roll it as we get the results and then we'll go from there.

Mitch Kummetz: Great thanks, good luck. Thank you.

Operator: If you'd like to ask a question you may press star one at this time.

Montero Moreno: The next question today comes from the line of Montero Moreno cheek which jeffries. This is your question. Hello and thanks for taking my call today. Get too quick one for me. First one is jeffs. I think last one we talked about, Jonathan Murphy marketing, and it was like not your father's shoe, so just anything else, so you're thinking about some marketing for JNM and just put around the brands in your company.

Montero Moreno: Good morning, Montero. We have been pleased with the results of our new brand marketing campaign for Jonathan Murphy and it speaks to the progress that we've made and reinventing the brand and evolving with the consumer. I know that we pivoted hard into casual and comfortable styles and traditionally, Jonathan Murphy has been known for wingtips and captoes, but we did a lot coming out of the pandemic to absolutely reposition the assortment and we need to let the customer know about this and also know about the great technology and the features that we have built into our footwear.

Montero Moreno: In addition to that, we've grown categories outside of footwear and it comprises almost half of what we're selling in our DTC channels today and so getting the word out has been really, really important. We have found that our awareness for our Jonathan Murphy customer is lower than we'd like it to be, so the brand marketing is directed at updating the consumer to know the latest with Jonathan Murphy and then also being able to build out awareness for customers who are similar to the ones who already shop with us.

Montero Moreno: But I don't necessarily know about Jonathan Murphy. What is important right now is newness, new products and new franchises and I spoke about that in the overall remarks that we are pulling forward product because it's what's resonating with the consumer. There's a real opportunity for innovation and more distinctive product and so it's not just marketing that is going to make a difference and drive sales going forward but it is also the great product and the great product stories that we'll tell with that marketing.

Montero Moreno: Thank you.

Mimi Vaughn: Jonathan, also just on what brands would you say are not brand or what would you say is a great trend that we should be looking forward to for the back to cool season right now. Yeah, so it's a good question and I can't tell all our secrets. You'll have to come in our store to check it out but the theme of the day is diversification and great interest and I said it to Mitch but what is exciting right now is that the customer is really enthusiastic about about footwear and we've seen that in overall traffic patterns for the category.

Mimi Vaughn: But journey's traffic has really outstripped the overall category benchmark and so there's a lot of just interest in footwear and I think that over time we spent a lot of time discussing the fact that during the pandemic we didn't offer a lot of innovation and our brands didn't offer a lot of innovation and that innovation is hitting now and it's not just interest in one brand. It's not just interest in athletic or in non athletic product.

Mimi Vaughn: It's really interest across the board and a number of brands and a number of styles. What is good for us is that average selling price has also gone up ticked up pretty significantly with the new assortment that we are selling which is more premium product at higher price points. There's interest across a number of different brands. There's still a move away from vulcanized product which was represented by a couple of strong brands in particular but vulcanized will always be part of our assortment and we will continue to offer newness that comes along with vulcanized. But the great trend right now is a lot of interest and a lot of diversification and better price points as a result of all of that.

Montero Moreno: Thank you.

Operator: At this time, I'd like to turn the floor right to measure for further remarks. Great, thank you for joining us today and we look forward to speaking to you on our third-quarter earnings call. Right, thank you.

Operator: This will conclude today's conference. You made disconnect your lines this time. Thank you for your participation[inaudible]

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