Journeys’ Store Traffic Didn’t Materialize During Holidays
Senior executives at Journeys’ parent Genesco surmise many of the chain’s customers were both sensitive to price and price hikes during the holiday period, and “taking a break” and buying fewer shoes than usual. But the banner’s online business was described as “robust” during the holidays as demand for casual footwear rose, a “trading down” trend in price points gained traction and the number of add-on product sales declined. There has been a pick-up in sales this month with double-digit increase across all channels. Meanwhile, there are expectations that the 2023 retail promotional environment will be more typical than it was in 2022.
Genesco, which generated an overall 3 percent, year-over-year comparable sales increase for the eight weeks ended Dec. 24, realized a 22 percent comp gain in ecommerce sales and 15 percent improvement within its Johnston & Murphy Group. The Nashville company currently estimates its full year, adjusted EPS to be at the low end of its $5.50 to $5.90 range versus prior guidance of a midpoint range performance. Annual gross margin is forecast to fall about 120 basis points with about half of the decline, or approximately $15 million, related to higher freight, shipping, and warehousing costs.
The group intends to drive its digital business, which was 80 percent of the topline during the pandemic, this year through investments and various customer loyalty programs. Journeys currently only has 20 percent penetration in digital, an underpenetrated figure that Genesco will aim to raise through adding Venmo as an online payment option, optimizing the banner’s mobile capabilities and promoting its two-day shipping service.
As for Johnston & Murphy, the group, benefitting from a repositioning that includes product and a younger demographic focus, generated a 15 percent comparable sales increase for the Nov.-Dec. period. With the dress category now accounting for less than 10 percent of the brand’s topline, Genesco says there is additional growth opportunity for the J&M brand through more “awareness building.”