Genesco Inc. (NYSE:GCO) Q3 2023 Earnings Call Transcript

Steve Marotta: That’s very helpful as well. And Tom alluded to potential realignment from an expense standpoint. Can you talk a little bit about — I know you probably don’t want to get into magnitude at the moment, but the impact — when could it have the impact? Could it be rather immediate? Is this going to be multiyear? Is it something that could move the needle next year? Maybe just talk a little bit about it again without providing any sort of detail that you’re not — that you can’t do right now?

Mimi Vaughn: We have a really good track record of reducing costs. I’ll hand it to Tom in a minute. Most recently, during the pandemic, we cut costs dramatically and quickly when we had to do that. Rent is our big expense. We’ve had a multiyear effort with a lot of success year after year of reducing our overall rent expense, and selling salaries really have been a journey. We’ve done a lot to use analytics and data to be able to put — to create efficiency really, and put the right ratio of our store people to customers and drive efficiency that way. And so, we think there will be opportunity there that we’ll get into. And so, I think we’ve got a great track record, and we will, certainly, get after the cost pressure that we’ve been seeing.

Tom George: Yes, Steve, let me reinforce that. We do have a good record of reducing cost in the Company. We’ve got good discipline around that. We’ve been looking at this closely with this tsunami, so to speak, of inflation that hit us and — especially around talent retention, being able to attract and retain talent. We’ve got increased cost in our DCs on an hourly basis, increased costs in our selling salaries in the store, increased IT costs to be able to execute on the digital initiatives. But we feel good we’re going to be able to identify some cost and be able to take some cost out of the business going forward. And let us get through holiday here and spend some more time with it when we report our fourth quarter earnings, we’ll be able to give everybody some more detail around the order of magnitude and the cadence.

Operator: Our next question is from the line of Mitch Kummetz with Seaport Research. Please proceed with your question.

Mtich Kummetz: I’ve got three as well. I’ll just do them one by one. So, first question is really a follow-up to Steve’s first question. It sounds like November was tough, although you’re not giving us a number. So I guess my question is. Does the Q4 implied kind of Q4 sales outlook assume sequential improvement over the balance of the quarter as you lap easier comparisons? Or are you basically kind of taking where you are for November and extrapolating that over the balance of the quarter?

Mimi Vaughn: Yes. So, I will let Tom talk a little bit about that. But Mitch, we clearly see, again, that when there is a reason to shop that that Journeys consumer comes out. And so again, we are optimistic. We saw that happen during back-to-school. We had tremendous results in August when there was a reason to shop. We had very good solid results when there was a reason to shop over Black Friday weekend. And so, we are looking — again, we believe that Christmas and the holidays will be more back-end loaded. What we have done is we’ve taken the trend in the back part of November, with the pickup in the back part of November, and we’ve actually been more conservative than what that trend was running just given some of the choppiness.

I did highlight with Steve’s question that we think there’s opportunity for Christmas week. There’s an extra day of selling. We do think there’s opportunity after into January as well, with a good and soft inventory position, we ought to be able to drive sales.