GCO 10-K & 10-Q changes, risk factors and insider trading

pricing of products, including the impact of the imposition of tariffs;

Adverse economic conditions and any related decrease in consumer demand for discretionary items could have a material adverse effect on our business, results of operations and financial condition. We generally sell generally discretionary items. Reduced consumer confidence and spending may result in reduced demand for discretionary items and may force us to take inventory markdowns, which may decrease sales and gross margin and make expense leverage difficult to achieve. In addition, inflationary cost pressure on the products we sell might limit our ability to pass on cost increases to our customers resulting in gross margin impact or reduced demand. Demand can also be influenced by other factors beyond our control.

A number of factors have historically affected, and will continue to affect, our comparable sales results and gross margin, including:

(i) consumer trends, such as less disposable income due to the impact of economic conditions, tax policies and other factors;

(ii) the lack of new fashion trends to drive demand in certain of our businesses and theour ability of those businesses to adjust to changes in fashion trends on a timely basis;

(iii) closing of department stores that anchor malls or a significant number of non-anchor mall formats;

(iv) competition;

(v) declining mall traffic due to changing customer preferences in the way they shop;

(vi) timing of holidays, including sales tax holidays and the timing of tax refunds;

(vii) general regional and national economic conditions;

(viii) inclement weather;

(ix) new merchandise introductions and changes in our merchandise mix;

(x) our ability to distribute merchandise efficiently to our stores;

(xi) timing and type of sales events, promotional activities or other advertising;

(xii) our ability to adapt to changing customer e-commerce preferences;

(xiii) access to allocated product from our vendors;

(xiv) our ability to realize anticipated cost reductions;

(xv) our ability to execute our business strategy effectively; and (xvi) other external events beyond our control.

Our success depends in part on the value and strength of the names of our business units. These names are integral to our businesses as well as to the implementation of our strategies for expanding our businesses. Maintaining, promoting, and positioning our brands will depend largely on the success of our marketing and merchandising efforts and our ability to provide high quality merchandise and a consistent, high quality customer experience. Our brands could be adversely affected if we fail to achieve these objectives or if our public image or reputation were to be tarnished by negative publicity or if adverse information concerning us is posted on social media platforms or similar mediums. Failure to comply, or accusation of failure to comply, with ethical, social, health, product, labor, data privacy, and environmental standards could also jeopardize our reputation and potentially lead to various adverse consumerconsumer, regulatory and employee actions. Any of these events could result in decreased revenue or otherwise adversely affect our business.

Our future success also depends on our ability to respond to changing consumer preferences, identify and interpret consumer trends, and successfully market new products.

The industry in which we operate is subject to rapidlyrapid changingchanges in fashion and consumer preferences. The continued popularity of our footwear and apparel and the development and selection of new lines and styles of footwear and apparel with widespread consumer appeal, requires us to accurately identify and interpret changing consumer trends and preferences and to effectively respond in a timely manner. Continuing demand and market acceptance for both existing and new products are uncertain and depend on substantial investment in product innovation, design and development, an ongoing commitment to product quality and significant and sustained marketing efforts and expenditures.

There is uncertainty in the markets in which we operate regarding potential policies related to issues surrounding global environmental sustainability. Greenhouse gases may have an adverse effect on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. Such events could have a negative effect on our business. Changes in the legal or regulatory environment affecting responsible sourcing, transportation cost, supply chain transparency, the effects of climate change or environmental protection, among others, including regulations to increase disclosure related to greenhouse gas emissions, to limit carbon dioxide and other greenhouse gas emissions, to discourage the use of plastic or to limit or to impose additional costs on commercial water use may result in a material adverse effect on our business or increased compliance costs for us and our business partners.

The majority of our stores are located within shopping malls and depend to varying degrees on consumer traffic in the malls to generate sales. We cannot control the success of malls, and an increase in store closures by other retailers may lead to reduced foot traffic, mall vacancies and mall bankruptcies. Declines in mall traffic, whether caused by a shift in consumer shopping preferences or by other factors,traffic may negatively impact our ability to maintain or grow our sales in existing stores, which could have an adverse effect on our financial condition or results of operations.

Our business is seasonal, with a significant portion of our net sales and operating income generated during the fourth quarter,quarter of our fiscal year, which includes the holiday shopping season. BecauseAs ofa this seasonality,result, we have limited ability to compensate for shortfalls in fourth quarter sales or earnings by changing our operations or strategies in other quarters. Adverse events outside of our control, such as supply chain interruptions, including shipping disruptions near crucial trade routes, increased labor costs and labor availability, decreased consumer traffic or deteriorating economic conditions could result in lower than expected sales during the holiday shopping season or other periods in which we typically experienceanticipate higher net sales, which could materially adversely impact our financial condition and results of operations. Our quarterly results of operations also may fluctuate significantly based on other factors such as:

(i) the timing of any new store openings and renewals;

(ii) the amount of net sales contributed by new and existing stores;

(iii) the timing of certain holidays and sales events;

(iv) changes in quarter end dates due to changes in the 53-weeklength of our fiscal year in Fiscal 2024 versus a 52-weekfrom year into Fiscal 2025year;

(v) changes in our merchandise mix;

(vi) weather conditions that affect consumer spending; and actions of competitors, including promotional activity.

In recent years, the retail industry has experienced consolidation, store closures, bankruptcies and other ownership changes. In the future, retailers in the U.S. and in foreign markets may further consolidate, undergo restructurings or reorganizations, or realign their affiliations, any of which could decrease the number of stores that carry our products or our licensees’ products or increase the ownership concentration within the retail industry. Changing shopping patterns, including the rapid expansion of online retail shopping, have adversely affected customer traffic in mall and outlet centers. We expect competition in the e-commerce market will continue to intensify. Growth in e-commerce competition could result in financial difficulties, including store closures, bankruptcies or liquidations for our brick-and-mortar stores and those of our wholesale customers who fail to compete effectively in the e-commerce market. We cannot control the success of individual malls, and an increase in store closures by other retailers may lead to reduced foot traffic, mall vacancies and mall bankruptcies. A continuation or worsening of these trends could cause financial difficulties for one or more of our segments, which, in turn, could substantially increase our credit risk and have a material adverse effect on our results of operations, financial condition and cash flows.

The retail footwear and accessory markets are intensely competitive. We currently compete against a diverse group of retailers, including other regional and national specialty stores, department and discount stores, small independents and e-commerce retailers, as well asand our own vendors who are increasingly selling direct-to-consumers,the whichsame sellor similar products similar to and often identical to those we sell.direct-to-consumers. Our branded businesses, selling footwear at wholesale, also face intense competition, both from other branded wholesale vendors and from private label initiatives of their retailer customers. A number of different competitive factors could have a material adverse effect on our business, including:

(i) increased operational efficiencies of competitors;

(ii) competitive pricing strategies;

(iii) expansion by existing competitors;

(iv) expansion of direct-to-consumer selling by our vendors;

(v) entry by new competitors into markets in which we currently operate; and (vi) adoption by existing retail competitors of innovative store formats or sales methods.

An increasing amount of our products are sold on our e-commerce sites and third-party e-commerce sites. Consumers are also increasingly using mobile-based applications to engage with us and our competitors through digital experiences that are offered on mobile platforms, and we are increasingly using social media to interact with our consumers as a means to enhance their shopping experience.consumers. Any failure on our part or on the part of third parties to provide effective, reliable, user-friendly e-commerce platforms that offer a wide assortment of our products and that continually meet the evolving expectations of online shoppers or any failure to provide attractive digital experiences could place us at a competitive disadvantage, result in the loss of sales, and could have a material adverse impact on our business and financial results. Our e-commerce business may be particularly vulnerable to cyber threats including unauthorized access and denial of service attacks. Sales in our e-commerce channel may also divert sales from our retail and wholesale channels.

We may open new stores, both in regional malls, where most of the operational experience of our U.S. businesses lies, and in other venues including outlet centers, airports and other off-mall locations. We cannot offer assurances that we will be able to open as many stores as we have planned, that any new store will achieve similar operating results to those of our existing stores or that new stores opened in markets in which we already operate will not have a material adverse effect on the revenues and profitability of our existing stores. In addition to the risks already discussed for existing stores, the success of any planned expansion or remodels is dependent upon numerous factors, many of which are beyond our control, including the following:

Acquisitions have been a component of our growth strategy and we expect that in the future we may engage in acquisitions or launch new businesses to grow our revenues and meet our other strategic objectives. If acquisitions are not successfully integrated with our business, our ongoing operations could be adversely affected. Additionally, acquisitionsAcquisitions or new businesses may also divert management's attention and may not achieve desired profitability objectives or result in any anticipated successful expansion of the businesses or concepts, causing lower than expected earnings and cash flow and potentially requiring impairment of goodwill and other intangibles. Although we review and analyze assets or companies we acquire, such reviews are subject to uncertainties and may not reveal all potential risks. Additionally, although we attempt to obtain protective contractual provisions, such as representations, warranties and indemnities, in connection with acquisitions, we cannot offer assurance that we can obtain such provisions in our acquisitions or that they will fully protect us from unforeseen costs of, or liabilities associated with,with the acquisitions. We may also incur significant costs and diversion of management time and attention in connection with pursuing possible acquisitions even if the acquisition is not ultimately consummated.

Additionally, we have in the past and may in the future divest assets or businesses. Following any such divestitures, we may retain or incur liabilities or costs relating to our previous ownership of the assets or business that we sell. Any required payments on retained liabilities or indemnification obligations with respect to past or future asset or business divestitures could have a material adverse effect on our business or results of operations. Dispositions may also involve our continued financial involvement in the divested business, such as through transition services agreements and guarantees. Under these arrangements, performance by the divested businesses or conditions outside our control could adversely affect our business and results of operations.

In connection with acquisitions, we record goodwill on our Consolidated Balance Sheets. This asset is not amortizedamortized, but is subject to an impairment test at least annually, where we have the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If after such assessment we conclude that the asset is impaired, we are required to determine the fair value of the asset using a quantitative impairment test that is based on projected future cash flows from the acquired business discounted at a rate commensurate with the risk we consider to be inherent in our current business model. We perform the impairment test annually at the beginning of ourthe fourth quarter,quarter of our fiscal year, or more frequently if events or circumstances indicate that the value of the asset might be impaired.

Deterioration in our equity market value, whether related to our operating performance or to disruptions in the equity markets or deterioration in the operating performance of the business unit with which goodwill is associated could cause us to recognize the impairment of some or all of the $8.9$9.5 million of goodwill on our Consolidated Balance Sheets at FebruaryJanuary 1,31, 2025,2026, resulting in the reduction of net assets and a corresponding non-cash charge to earnings in the amount of the impairment.

We depend on a variety of information technology systems for the efficient functioning of our business (including multiple e-commerce websites) and security of information. Much information essential to our business is maintained electronically, including competitively sensitive information and potentially sensitive personal information about customers and employees.

Despite our preventative efforts, our ITinformation technology systems and websites may from time to time be vulnerable to damage or interruption from events such as computer viruses, security breaches, errors by third-party providers, power outages and difficulties in replacing or integrating the systems of acquired businesses,businesses. computerAny viruses,material securitydisruption breachesto our information systems could adversely affect our operations and powerfinancial outages.results.

Our insurance policies may not providecover coveragebusiness forinterruption, security breaches and similar incidents or may have coverage limits which may not be adequate to reimburse usinadequate for lossessuch caused by security breaches.losses. We also rely on certain hardware and software vendors, including cloud-service providers, to maintain and periodically upgrade many of these systems so that they can continue to support our business. The software programs supporting many of our systems are licensed to us by independent software companies. The inability of our employees and developers or our inability to continue to maintain and upgrade these information systems and software programs or the failure of third-party providers on which we rely could disrupt or reduce the efficiency of our operations. In addition, costsCosts and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems could also disrupt or reduce the efficiency of our operations or leave us vulnerable to security breaches. In addition, we are transforming our information technology delivery mode, including transferring certain technology services to a third-party partner. These efforts involve risks, including delays, increased costs, service interruptions, challenges in managing third-party performance, and the possibility that expected benefits may not be realized.

We also rely heavily on our information technology staff. Changes to our information technology organization in connection with the transformation of our information technology delivery model may result in employee attrition. If we cannot meet our staffing needs in this area, we may not be able to fulfill our technology initiatives or to provide maintenance on existing systems. A disruption to our information systems or those of our third-party providers could result in lost sales and increased costs and could have a material adverse effect on our business and results of operations.

Net sales wereincreased flat4.8% to $2.4 billion in Fiscal 20252026 compared to Fiscal 2024.2025.

Journeys Group sales increased 3%,7% and Schuh Group sales increased 4%, partially offset by a sales decrease of 6% at Johnston & Murphy Group and a sales decrease of 11%4% at Genesco Brands Group, while SchuhJohnston & Murphy Group sales were flat.flat for Fiscal 2026 as compared to Fiscal 2025.

Total comparable sales increased 3%6% for Fiscal 2025,2026, including flata 6% increase in same store sales and a 12%4% increase in comparable e-commerce sales.

Operating margin increased 12010 basis points as a percentage of net sales from (0.6%) in Fiscal 2024 to 0.6% in Fiscal 2025.2025 to 0.7% in Fiscal 2026.

The effective income tax rate increaseddecreased from (8.5%) in Fiscal 2024 to 309.6% in Fiscal 2025 to (5.4)% in Fiscal 2026 as a result of the impact of the One Big Beautiful Bill Act ("OBBBA") in Fiscal 2026 and a $26.2 million valuation allowance in Fiscal 2025.

Diluted earnings per share from continuing operations was $1.25 per share in Fiscal 2026 compared to a diluted loss per share from continuing operations wasof $1.80 per share in Fiscal 2025 compared to $2.10 per share in Fiscal 2024.2025.

Gross margin decreasedincreased 0.2%2.7% to $1.127 billion in Fiscal 2026 from $1.097 billion in Fiscal 20252025. fromGross $1.099 billion in Fiscal 2024 andmargin decreased 90 basis points as a percentage of net sales from 47.3% in Fiscal 2024 to 47.2% in Fiscal 2025,2025 to 46.3% in Fiscal 2026, reflecting decreased gross margin as a percentage of net sales in JourneysSchuh Group and SchuhGenesco Brands Group, partially offset by an increase inwhile gross margin as a percentage of net sales was flat in both Journeys Group and Johnston & Murphy Group and Genesco Brands Group. The overall decrease in gross margin as a percentage of net sales reflects increased promotional activity at Schuh Group, partially offset by better initial marginsGroup and lower wholesale reserves at Johnston & Murphy Group and a favorable change in product mixmargins at Genesco Brands Group.Group related to the exit of licenses and ongoing tariff pressure.

Selling and administrative expenses in Fiscal 20252026 decreasedincreased 2.0% to $1.101 billion compared to $1.080 billion compared to $1.082 billion in Fiscal 2024.2025. Selling and administrative expenses decreased 10120 basis points as a percentage of net sales from 46.4% in Fiscal 2025 comparedto to45.2% in Fiscal 2024 from 46.5% to 46.4%,2026, reflecting decreased expenses as a percentage of net sales at Journeys Group and Genesco Brands Group, partially offset by increased expenses as a percentage of net sales at Schuh Group and Johnston & Murphy Group. The overall decrease in expenses as a percentage of net sales in Fiscal 20252026 reflects a decrease in occupancy costs,costs partiallyand offsetselling bysalaries increasedalong marketingwith expenses.other expenses as part of our cost savings initiatives. Explanations of the changes in results of operations are provided by business segment in discussions following these introductory paragraphs.

Operating margin was 0.7% in Fiscal 2026 compared to 0.6% in Fiscal 2025 compared to an operating margin loss of (0.6)% in Fiscal 2024 reflecting improved operating margin at Journeys Group and Genesco Brands Group, partially offset by decreased operating margin at Schuh Group andGroup, Johnston & Murphy Group and Genesco Brands Group. The overall improvement in operating margin in Fiscal 20252026 primarily reflects a non-cash goodwill impairment charge of $28.5 million in Fiscal 2024 and decreased selling and administrative expenses as a percentage of net sales, partially offset by decreased gross margin as a percentage of net sales and higher asset impairment and other charges in Fiscal 20252026 compared to Fiscal 2024.2025.

The effective income tax rate was (5.4)% for Fiscal 2026 compared to 309.6% for Fiscal 20252025. The lower effective tax rate for Fiscal 2026 compared to (8.5%)Fiscal for2025 reflects the impact of the enactment of income tax law changes under the OBBBA in Fiscal 2024.2026 Theand their interaction with our valuation allowance in the U.S. jurisdiction coupled with a tax benefit associated with our losses generated in our U.K. tax jurisdiction. Conversely, the higher effective tax rate for Fiscal 2025 compared to Fiscal 2024 reflects a $26.2 million U.S. valuation allowance recorded in Fiscal 2025, reflecting the uncertainty regarding our ability to realize the benefit of our general tax attributes in the U.S. See Item 8, Note 11, "Income Taxes", to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information.

TheNet earnings for Fiscal 2026 were $13.3 million, or $1.25 diluted earnings per share compared to a net loss for Fiscal 2025 wasof $18.9 million, or $1.74 diluted loss per share compared to a net loss of $16.8 million, or $1.50 diluted loss per share for Fiscal 2024.2025. The net loss for Fiscal 2025 and Fiscal 2024 includes a $1.2 million ($0.9 million, net of tax) and $9.4 million ($7.2 million, net of tax), respectively, gain from insurance proceeds related to legacy environmental matters.

Net sales from Journeys Group increased 2.6%6.8% to $1.49 billion for Fiscal 2026 compared to $1.40 billion for Fiscal 2025 compared to $1.36 billion for Fiscal 2024.2025. The increase in net sales was primarily due to a total comparable sales increase of 6%9% drivenprimarily byreflecting increased comparable e-commerce sales and increased same store sales, partially offset by a 5% decrease in the average number of Journeys stores for Fiscal 20252026 due to 5741 net store closuresclosures. The increase in comparable sales in Fiscal 2026 was fueled by strength in Journeys Group's product assortment with brands across both casual and aathletic decreaseposting gains. Journeys Group drove strong gains in salesconversion relatedand transaction size. We continue to the 53-week calendar shift. We believe our Journeys consumer is more interested in a broader range of brands they are buying and more diversified in the styles they are wearing. We have injectedelevate the product assortment with more new relevant product offerings across several casual and athletic brands and increased investmentinvest in the Journeys brand to elevateimprove the customer experience.

The 110210 basis point improvement in operating margin for Journeys Group in Fiscal 20252026 compared to Fiscal 20242025 was primarily due to decreased selling and administrative expenses as a percentage of net sales reflecting decreasedleverage occupancy,of compensationexpense as a result of increased revenue in Fiscal 2026, especially occupancy expense and freightselling expenses, partially offset by increased performance-based compensationsalaries, and marketingalso expenses.reflecting Grossour margincost decreasedsavings byinitiatives. 10The basisdecrease pointsin selling and administrative expense as a percentage of net sales demonstrates the impact of our cost savings initiatives and closing underperforming stores. Gross margin as a percentage of net sales was flat in Fiscal 2025,2026 reflectingas changes in product mix,mix partiallywere offset by lower markdowns and decreased markdowns.shipping and warehouse expense.

The 240300 basis point decrease in operating margin for Fiscal 20252026 compared to Fiscal 20242025 reflects decreased gross margin as a percentage of net sales reflecting a moreincreased promotional environmentactivity, atincluding Schuhincreased Grouployalty duringredemptions Fiscaland 2025,promotions to match the competitive environment, partially offset by decreased shipping and warehouse expenses. TheIn increase inaddition, selling and administrative expenses increased as a percentage of net sales also contributed to the decrease in operating marginsales, reflecting increaseddeleverage sellingof salaries,expenses, especially marketing expense and depreciationselling expense,salaries, partially offset by decreased performance-based compensation expense and occupancy expense. In addition, operating income included a favorable impact of $0.2 million due to changes in foreign exchange rates compared to last year.

Johnston & Murphy Group net sales decreasedwere 5.7%flat toat $320.2 million for Fiscal 20252026 from $339.4 million forand Fiscal 20242025. primarily due to decreased totalTotal comparable sales ofwere 2%flat drivenin byFiscal decreased store2026 and e-commerce comparable sales, a 3% decrease in the average number of Johnston & Murphy stores decreased 1% for Fiscal 20252026 andwhich decreasedwas offset by a small increase in wholesale sales. The softening in men's non-athletic premium footwear market made for a difficult operating environment in Fiscal 2025. Johnston & Murphy continues to make inroads with more casual footwear and in apparel and accessories, such as outerwear and leather goods. Retail operations accounted for 78.3%77.9% of Johnston & Murphy Group's sales in bothFiscal 2026, down from 78.3% in Fiscal 2025 and Fiscal 2024.2025. The store count for Johnston & Murphy retail operations at the end of Fiscal 20252026 was 148153 Johnston & Murphy shops and factory stores, compared to 156148 Johnston & Murphy shops and factory stores, including five stores in Canada, at the end of Fiscal 2024. Johnston & Murphy closed its five Canadian stores at the end of Fiscal 2025.

The 220120 basis point decrease in operating margin for Johnston & Murphy Group for Fiscal 20252026 compared to Fiscal 20242025 reflects increased selling and administrative expenses as a percentage of net sales for Fiscal 2025,2026, reflecting theincreased deleveragedepreciation, of expenses, especially marketing expense, selling salariesoccupancy and compensation expenseexpenses, inpartially partoffset as a result ofby decreased revenue in Fiscal 2025. Johnston & Murphy continues to make investments in marketing to enhance the brand as the men's non-athletic premium footwear market returns to a more normal operating environment.expense. Gross margin as a percentage of net sales increasedwas flat in Fiscal 2025,2026 primarilycompared reflectingto improvedFiscal 2025 as better initial margins andat retail were offset by lower markdowns.wholesale margins due primarily to tariff impacts.

Net sales for Genesco Brands Group decreased 10.7%3.8% to $121.2 million for Fiscal 2026 from $126.0 million for Fiscal 2025 from $141.2 million for Fiscal 2024,2025, primarily due to thedecreased repositioningsales of theLevi's businessas towe aexit morethat refined portfolio of licenses to emphasize key brands,business, partially offset by increased sales of Dockersprivate label footwear.

Corporate and other expense for Fiscal 20252026 decreasedincreased 39%14% to $43.2 million compared to $37.8 million comparedfor toFiscal $62.32025. Corporate and other expense in Fiscal 2026 included an $8.1 million charge in asset impairments and other which included $3.9 million for Fiscalstore 2024.restructuring, $2.9 million for costs associated with information technology transformation, $0.7 million for asset impairments and $0.6 million for severance. Corporate and other expense in Fiscal 2025 included a $3.2 million charge in asset impairment and other charges which included $1.8 million for severance and $1.4 million for asset impairments. Corporate and other expense in Fiscal 2024 included non-cash impairment charges of $28.5 million related to goodwill and a $1.8 million charge in asset impairment and other charges which included $1.1 million in severance and $1.0 million for asset impairments, partially offset by a $0.3 million insurance gain. The corporate expense increase, excluding asset impairment and other charges in Fiscal 20252026 and Fiscal 2024 and goodwill impairment in Fiscal 2024,2025, primarily reflects an increase in performance-based compensation andexpense, compensationpartially expensesoffset by a decrease in professional fees in Fiscal 20252026 compared to Fiscal 2024.2025.

Net interest expense decreased $3.53.6% or $0.2 million orto 45.4%$4.1 tomillion in Fiscal 2026 from $4.3 million in Fiscal 2025 from $7.8 million in Fiscal 2024 primarily reflecting decreased averagerevolver borrowings in the U.S. in Fiscal 20252026 compared to Fiscal 2024.2025, partially offset by increased revolver borrowings in the U.K. in Fiscal 2026.

Cash provided by operating activities was $6.9$57.9 million lowerhigher in Fiscal 20252026 compared to Fiscal 2024,2025, reflecting primarily the following factors:

Cash used in investing activities was $18.9$20.9 million lowerhigher in Fiscal 20252026 compared to Fiscal 20242025 reflecting decreasedincreased capital expenditures primarily related to omni-channel capabilities and investments in retail stores.stores, primarily renovations.

Cash used in financing activities was $0.6$33.7 million lower in Fiscal 20252026 as compared to Fiscal 20242025 primarily reflecting decreased share repurchases, partially offset by decreasedhigher net borrowingspayments thisin yearFiscal 2025 compared to lastFiscal year.2026.

On January 28,16, 2022,2026, we entered into athe ThirdFourth Amendment (the "ThirdFourth Amendment") to ourthe Fourth Amended and Restated Credit Agreement dated as of January 31, 2018 between(as amended, the "Credit Facility" or the "Credit Agreement") by and among us, certain of our subsidiaries, the lenders party thereto and Bank of America, N.A. as agent (as amended, the "Credit Facility" or the "Credit Agreement")agent, to, among other things, extend the maturity date to January 28,16, 20272031. In addition, the Fourth Amendment (i) makes conforming changes to replace the Canadian Dollar Offered Rate with the Canadian Overnight Repo Rate Average ("CORRA") with respect to Canadian borrowings and remove(ii) removes the $17.5credit millionspread firstadjustment in-lastand outthereby termreduces loan.the Term SOFR (as defined in the Credit Agreement) interest rate with respect to domestic borrowings. The Total Commitments (as defined in the Credit Agreement) for the revolving loans isremains at $332.5 million. As of FebruaryJanuary 1,31, 20252026, we didhad not have anyoutstanding revolver borrowings outstanding.under the Credit Facility of $3.4 million (CAD $4.6 million) related to GCO Canada ULC. We had outstanding letters of credit of $6.2 million under the Credit Facility at January 31, 2026. These letters of credit support insurance and lease indemnifications.

On November 2, 2022, Schuh entered into a facility agreement (the "Facility Agreement") with Lloyds Bank PLC (“Lloyds”) for a £19.0 million revolving credit facility. The Facility Agreement expireswas Novemberextended 2,through 2025,February with28, options to request two one-year extensions to this termination date subject to lender approval,2026 and bears interest at 2.35% over the BankSONIA Rate. The Facility Agreement was amended during the first quarter of EnglandFiscal Base2027 on February 20, 2026 to, among other things, increase the commitment of the credit facility to £20.0 million, extend the maturity date to August 20, 2027, and it will bear interest at 1.75% over the SONIA Rate. This Facility Agreement replaced Schuh's Facility Letter that would have expired in October 2023.Letter. The Facility Agreement includes certain financial covenants specific to Schuh. Following certain customary events of default outlined in the Facility Agreement, payment of outstanding amounts due may be accelerated or the commitments may be terminated. The Facility Agreement is secured by charges over all of the assets of Schuh, and Schuh's subsidiary, Schuh (ROI) Limited. Pursuant to a Guarantee in favor of Lloyds in its capacity as security trustee, Genesco Inc. has guaranteed the obligations of Schuh under the Facility Agreement and certain existing ancillary facilities on an unsecured basis. As of FebruaryJanuary 1,31, 2025,2026, we did not have any borrowings under the Schuh Facility Agreement.

We were in compliance with all the relevant terms and conditions of the Credit Facility and Facility Agreement as of FebruaryJanuary 1,31, 2025.2026.

In the fourth quarter of Fiscal 2021, we implemented tax strategies allowed under the 5-year carryback provisions in the CARES Act which we believed would generate approximately $55 million of net tax refunds. We received approximately $26 million of such net tax refunds in Fiscal 2022 and anticipated receipt of the remaining outstanding net tax refund in Fiscal 2023. However, in the third quarter of Fiscal 2023, we were notified that the Internal Revenue Service ("IRS") would conduct an audit of the periods related to the outstanding net tax refund. As a result, the timing of the net tax refund was extended due to the audit process. On January 17, 2025, we executed Form 870 with the IRS exam team and began the process of completing the separate Joint Committee on Taxation ("JCT") review of our claim.outstanding FormU.S. 870Federal istax usedrefund uponclaim completionfor the Fiscal 2014 to Fiscal 2021 tax periods. During the first quarter of anFiscal IRS examination to indicate2026, the taxpayer’sJCT agreementfinalized their review with the revenue agent’s report of proposed adjustments and agreement to pay any deficiency. As a result, we now expect a refund of $59.3 million based on additional accrued interest and minorno changes to the refundclaim and the IRS began the process of issuing the refund. The balance outstanding increased as agreeda to on Form 870. Further, we now expect to complete the remaining requirementsresult of theadditional Jointaccrued Committeeinterest. onWe Taxationreceived governmentala review process and collect thetotal refund duringof $60.1 million, including interest, in Fiscal 2026. As such, we have moved the receivable from noncurrent prepaid income taxes to prepaids and other current assets on the Consolidated Balance Sheets as of February 1, 2025.

The following table sets forth aggregate contractual obligations as of FebruaryJanuary 1,31, 2025.2026.

Capital expenditures were $41.1$62.1 million and $60.3$41.1 million for Fiscal 20252026 and 2024,2025, respectively. The $19.2$21.0 million decreaseincrease in Fiscal 20252026 capital expenditures as compared to Fiscal 20242025 is primarily due to decreasesincreased instore computer hardware, softwarerenovations and warehouse enhancements to drive traffic and omni-channel initiatives and decreases for new stores, partially offset by increased renovations.stores.

We expect total capital expenditures for Fiscal 20262027 to be approximately $50-$65$65-$70 million of which approximately 70%90% is for new stores and renovations and 30%10% is for computer hardware, software and warehouse enhancements for initiatives to drive traffic and omni-channel initiatives and other projects.initiatives. We do not currently have any longer termlonger-term capital expenditures or other cash requirements other than as set forth in the contractual obligations table. We also do not currently have any off-balance sheet arrangements.

We repurchased 399,633604,531 shares during Fiscal 20252026 at a cost of $9.8$12.6 million or an average of $24.49$20.79 per share. We were operating under a $100.0 million repurchase authorization from February 2022. In June 2023, we announced an additional $50.0 million share repurchase authorization. As of FebruaryJanuary 1,31, 2025,2026, we have $42.3$29.8 million remaining under the expanded share repurchase authorization. We repurchased 399,633 shares during Fiscal 2025 at a cost of $9.8 million or an average of $24.49 per share. We repurchased 1,261,295 shares during Fiscal 2024 at a cost of $32.0 million or an average of $25.39 per share. We repurchased 1,380,272 shares during Fiscal 2023 at a cost of $72.7 million or an average of $52.66 per share. During the first quarter of Fiscal 2026,2027, through March 26,25, 2025,2026, we repurchaseddid 469,325not sharesrepurchase atany a cost of $10.0 million or an average of $21.31 per share.shares.

Cash and Cash Equivalents – Our cash and cash equivalent balances are held in our bank accounts and are invested primarily in institutional money market funds. We did not have significant exposure to changing interest rates on invested cash at FebruaryJanuary 1,31, 2025.2026. As a result, we consider the interest rate risk implicit in these investments at FebruaryJanuary 1,31, 20252026 to be low. We had cash equivalents of $7.5$71.8 million at FebruaryJanuary 1,31, 2025.2026.

Summary – Based on our overall market interest rate exposure at FebruaryJanuary 1,31, 2025,2026, we believe that the effect, if any, of reasonably possible near-term changes in interest rates on our consolidated financial position, results of operations or cash flows for Fiscal 20262027 would not be material.

Accounts Receivable – Our accounts receivable balance at FebruaryJanuary 1,31, 20252026 is concentrated in our wholesale businesses, which sell primarily to department stores and independent retailers across the United States. In the wholesale businesses, one customer accounted for 27%,22%, one customer accounted for 19%, one customer accounted for 11%13% and onetwo customercustomers each accounted for 10% of our total trade receivables balance, while no other customer accounted for more than 7%8% of our total trade receivables balance as of FebruaryJanuary 1,31, 2025.2026. We monitor the credit quality of our customers and establish an allowance for doubtful accounts based upon factors surrounding credit risk of specific customers, historical trends and other information, as well as customer specific factors; however, credit risk is affected by conditions or occurrences within the economy and the retail industry, as well as company-specific information.

Foreign Currency Exchange Risk – We are exposed to translation risk because certain of our foreign operations utilize the local currency as their functional currency and those financial results must be translated into United States dollars. As currency exchange rates fluctuate, translation of our financial statements of foreign businesses into United States dollars affects the comparability of financial results between years. Schuh Group's net sales and operating income for Fiscal 20252026 were positively impacted by $9.0$21.2 million and the operating loss for Fiscal 2026 was negatively impacted by $0.2 million, respectively,million due to the change in foreign exchange rates.

Inherent in the analysis of both wholesale and retail inventory valuation are subjective judgments about current market conditions, fashion trends and overall economic conditions as well as expectations surrounding future sales. Failure to make appropriate conclusions regarding these factors may result in an overstatement or understatement of inventory value. A change of 10% from the recorded amounts for markdowns, shrinkage and damaged goods would have changed inventory by $0.9 million at FebruaryJanuary 1,31, 2025.2026.

In accordance with ASC ("Accounting Standards Codification") 350, "Intangibles - Goodwill and Other" ("ASC 350") we have the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If, after such assessment, we conclude that the asset is not impaired, no further action is required. However, if we conclude otherwise, we are required to determine the fair value of the asset using a quantitative impairment test. The quantitative impairment test for goodwill compares the fair value of each reporting unit with the carrying value of the reporting unit with which the goodwill is associated. If the fair value of the reporting unit is less than the carrying value of the reporting unit, an impairment charge would be recorded for the amount, if any, in which the carrying value exceeds the reporting unit's fair value. We estimate fair value using the best information available, and compute the fair value derived by a combination of the market and income approach. The market approach is based on observed market data of comparable companies to determine fair value. The income approach utilizes a projection of a reporting unit’s estimated operating results and cash flows that are discounted using a weighted-average cost of capital that reflects current market conditions. A key assumption in our fair value estimate is the weighted average cost of capital utilized for discounting our cash flow projections in our income approach. The projection uses our best estimates of economic and market conditions over the projected period including growth rates in sales, costs, estimates of future expected changes in operating margins and cash expenditures. Other significant estimates and assumptions include terminal value growth rates, future estimates of capital expenditures and changes in future working capital requirements. For additional information regarding impairment of long-lived assets, see Item 8, Note 3, "Goodwill and Other Intangible Assets" and Note 4,"Asset Impairments and Other Charges" to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

In accordance with Accounting Standards Update ("ASU") 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASC 606"), revenue shall be recognized upon satisfaction of all contractual performance obligations and transfer of control to the customer. Revenue is measured as the amount of consideration we expect to be entitled to in exchange for corresponding goods. SubstantiallyThe allmajority of our sales are single performance obligation arrangements for retail sale transactions for which the transaction price is equivalent to the stated price of the product, net of any stated discounts applicable at a point in time. Each sales transaction results in an implicit contract with the customer to deliver a product at the point of sale. Revenue from retail sales is recognized at the point of sale, is net of estimated returns, and excludes sales and value added taxes. Revenue from catalog and internet sales is recognized at estimated time of delivery to the customer, is net of estimated returns, and excludes sales and value added taxes. Wholesale revenue is recorded net of estimated returns and allowances for markdowns, damages and miscellaneous claims when the related goods have been shipped and legal title has passed to the customer. Actual amounts of markdowns have not differed materially from estimates. Shipping and handling costs charged to customers are included in net sales. We elected the practical expedient within ASC 606 related to taxes that are assessed by a governmental authority, which allows for the exclusion of sales and value added tax from transaction price.

As part of the process of preparing our Consolidated Financial Statements, we are required to estimate our income taxes in each of the tax jurisdictions in which we operate. This process involves estimating actual current tax obligations together with assessing temporary differences resulting from differing treatment of certain items for tax and accounting purposes, such as depreciation of property and equipment and valuation of inventories. These temporary differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance Sheets. We then assess the likelihood that our deferred tax assets will be recovered from future taxable income. Actual results could differ from this assessment if adequate taxable income is not generated in future periods. To the extent it is more likely than not that some portion or all of a deferred asset will not be realized, valuation allowances are established. To the extent valuation allowances are established or increased in a period, we include an expense within the tax provision in our Consolidated Statements of Operations. These deferred tax valuation allowances may be released in future years when we consider that it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, we will need to periodically evaluate whether or not all available evidence, such as future taxable income and reversal of temporary differences, tax planning strategies, and recent results of operations, provides sufficient positive evidence to offset any other negative evidence that may exist at such time. In the event the deferred tax valuation allowance is released, we would record an income tax benefit for a portion or all of the deferred tax valuation allowance released. At FebruaryJanuary 1,31, 2025,2026, we had a deferred tax valuation allowance of $72.4$71.2 million.

Income tax reserves for uncertain tax positions are determined using the methodology required by the Accounting Standards Codification (“ASC”) Income Tax Topic, ("ASC 740"). This methodology requires companies to assess each income tax position taken using a two-step process. A determination is first made as to whether it is more likely than not that the position will be sustained, based upon the technical merits, upon examination by the taxing authorities. If the tax position is expected to meet the more likely than not criteria, the benefit recorded for the tax position equals the largest amount that is greater than 50% likely to be realized upon ultimate settlement of the respective tax position. Uncertain tax positions require determinations and estimated liabilities to be made based on provisions of the tax law which may be subject to change or varying interpretation. If our determinations and estimates prove to be inaccurate, the resulting adjustments could be material to our future financial results. See Item 8, Note 11, "Income Taxes", to our Consolidated Financial Statements included in this Annual Report on Form 10-K for additional information related to income taxes.

Our net sales increaseddecreased 2.8%3.0% to $487.0$529.9 million in the firstsecond quarter of Fiscal 2027 compared to $474.0$546.0 million in the firstsecond quarter of Fiscal 2026. The net sales increasedecrease compared to last year's firstsecond quarter reflects a 2% increase in comparable sales, including a 3% increase in same store sales, other non-comparable gains and a favorable foreign exchange impact, partially offset by the impact of net store closings resulting from our ongoing footprint optimization.optimization, decreased sales in Genesco Brands Group as we exited licenses, a 6% decrease in e-commerce comparable sales reflecting our prioritization of full-price selling at Schuh Group and an unfavorable foreign exchange impact, partially offset by a 1% increase in same store sales and higher sales from enlarged stores. The Journeys Group business had a strong firstsecond quarter of Fiscal 2027 with comparable sales up 5%,2% on top of a 5% comparable gain last year, driven by strength in the product assortment and other initiatives. Schuh Group comparable sales were down 9% for the firstsecond quarter of Fiscal 2027 reflecting a weaker U.K. consumer market and our decision to prioritize full-price selling.selling over discounts and promotions. Johnston & Murphy Group also had a strong second quarter of Fiscal 2027 with comparable sales were up 7%4% in the firstsecond quarter of Fiscal 2027 driven by increased store sales due to new and e-commerce sales driven by strength inimproved product assortment,assortments, both in apparel and footwear, asbenefitting a result of increasedfrom brand awareness through marketing and social media campaigns. By segment, Journeys Group sales increasedwere 5%,flat, Schuh Group sales decreased 5%,10%, Johnston & Murphy Group sales increased 6%5% and Genesco Brands Group sales increaseddecreased 4%21% or $6.7 million in the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026. Schuh Group's sales decreased 9%10% on a local currency basis for the firstsecond quarter of Fiscal 2027.

Gross margin increased 3.5%8.9% to $228.9$272.1 million in the firstsecond quarter of Fiscal 2027 from $221.2$249.9 million in the firstsecond quarter of Fiscal 2026 and increased 30560 basis points as a percentage of net sales from 46.7%45.8% in the firstsecond quarter of Fiscal 2026 to 47.0%51.4% in the firstsecond quarter of Fiscal 2027. The overall increase in gross margin as a percentage of net sales in the second quarter of Fiscal 2027 is due primarily to efficienciestariff inrefunds shippingof and$21.8 warehouse costs andmillion, less promotional activity acrossand ourhigher businesses,full-price partiallyselling offsetat bySchuh Group, favorable changes in brandsales mixmix, atthe Journeyslicense Groupexit benefit and Schuhtariff Group.mitigation actions across our branded businesses.

Selling and administrative expenses in the firstsecond quarter of Fiscal 2027 increaseddecreased 2.2%1.8% to $254.4$259.6 million from $249.0$264.3 million compared to the firstsecond quarter of Fiscal 2026,2026. butSelling decreasedand 30administrative expenses increased 60 basis points as a percentage of net sales in the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 from 52.5%48.4% to 52.2%.49.0% as a result of the sales decline. The decreaseincrease as a percentage of net sales reflects increased occupancy and performance-based compensation expense, partially offset by decreased selling salaries, occupancy,marketing freightexpenses and warehouse expenses as well asother ongoing cost savings initiatives, partially offset by increased performance-based incentive compensation expenses.initiatives.

Operating margin was (3.2)%0.7% in the firstsecond quarter of Fiscal 2027 compared to (5.92.6)% in the firstsecond quarter of Fiscal 2026. The overall improvement in operating margin for the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 primarily reflects increased sales, increased gross margin as a percentage of net sales, decreasedpartially offset by a net loss of $8.9 million in asset impairment and other charges and deleverage in expenses as a percentage of net sales and a net gain in asset impairment and other charges.sales.

The lossEarnings from continuing operations before income taxes (“pretax lossearnings”) for the firstsecond quarter of Fiscal 2027 was $15.9$3.4 million compared to $29.7a loss from continuing operations before income taxes ("pretax loss") of $16.0 million for the firstsecond quarter of Fiscal 2026. ThePretax pretax lossearnings for the firstsecond quarter of Fiscal 2027 included an asset impairment and other gaincharge of $10.1$8.9 million which included a gain of $13.4 million related to payment card interchange fee litigation, partially offset by a $3.0$6.9 million charge for storecosts restructuring,related to proxy contest, a $0.2$1.0 million charge for other legal matters, a $0.4 million charge for costs associated with information technology transformationtransformation, a $0.5 million charge for severance and other restructuring and a $0.1 million charge for severance.store Pretaxrestructuring. The pretax loss for the firstsecond quarter of Fiscal 2026 included asset impairment and other charges of $0.3$0.1 million for severance.

We had an effective income tax rate of 6.8%(2.5)% and 28.5%(15.0)% in the firstsecond quarter of Fiscal 2027 and Fiscal 2026, respectively. The lowerhigher effective tax rate in the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 is primarily reflects a lowerresult expectedof taxthe rateimpact forof Fiscalthe 2027OBBBA versusin ourthe expectationsecond forquarter of Fiscal 2026 aswhich did not have a recurring impact in the second quarter of theFiscal prior2027, yearas firstwell quarter due toas the impact of the valuation allowance in certain jurisdictions combinedon withour effective tax rate as a result of changes in the incomemix taxof lawearnings changesand fromlosses theamong OBBBA.jurisdictions.

TheNet net lossearnings in the firstsecond quarter of Fiscal 2027 waswere $14.8$3.5 million, or $1.42$0.32 diluted lossearnings per share, compared to a net loss of $21.2$18.5 million, or $2.02$1.79 diluted loss per share, in the firstsecond quarter of Fiscal 2026.

Results of Operations – FirstSecond Quarter of Fiscal 2027 Compared to FirstSecond Quarter of Fiscal 2026

Net sales from Journeys Group increasedwere 4.7%essentially toflat $285.3at $317.8 million in the firstsecond quarter of Fiscal 2027,2027 compared to $272.6$318.2 million in the firstsecond quarter of Fiscal 2026. TheJourneys net sales increase compared tofor the firstsecond quarter of Fiscal 20262027 reflects a 5%2% increase in comparable sales, with increases in both stores and e-commerce channels, and otherhigher non-comparablesales gains,from partiallyenlarged stores, offset by a 4%5% decrease in the average number of stores in the firstsecond quarter of Fiscal 2027. The increased comparable sales in the firstsecond quarter of Fiscal 2027 was driven by the continuedstrong strengthperformance inof Journeysour Group's4.0 store remodels and other initiatives as well as elevated product assortment with brands across athletic and casualcasual, achieving healthy growth. Journeys Group's strong store performance was driven by gains in conversion and higher average transaction size inand themore firstfull-price quarter of Fiscal 2027.selling.

We closed 2517 Journeys Group stores in the firstsecond quarter of Fiscal 2027. Journeys Group operated 940924 stores at the end of the firstsecond quarter of Fiscal 2027, including 189176 Journeys Kidz stores in the United States, 33 Journeys stores in Canada and 30 Little Burgundy stores in Canada, compared to 989984 stores at the end of the firstsecond quarter of Fiscal 2026, including 203200 Journeys Kidz stores in the United States, 3433 Journeys stores in Canada and 2930 Little Burgundy stores in Canada.

The 160140 basis point improvement in operating margin for Journeys Group for the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 was primarily due to a 190180 basis point decrease in selling and administrative expenses as a percentage of net sales. This improvement reflects leverage of expenses as a result of increased revenue in the firstsecond quarter of Fiscal 2027, especially decreased selling salariessalaries, marketing expense and occupancyother expense,expenses partiallyand offsetdemonstrates bythe increasedimpact marketingof expense.our productivity efforts, cost savings initiatives and closing underperforming stores. The increase in operating margin was partially offset by a 3040 basis point decrease in gross margin as a percentage of net sales, reflecting lower initial margins as a result of changes in brand mix, partially offset by lower markdowns. The decrease in selling and administrative expenses as a percentage of net sales demonstrates the impact of our cost savings initiatives and closing underperforming stores.

Net sales from Schuh Group decreased 5.4%10.1% to $90.7$113.8 million in the firstsecond quarter of Fiscal 2027 compared to $95.9$126.6 million in the firstsecond quarter of Fiscal 2026. The net sales decrease for the firstsecond quarter of Fiscal 2027 includes a 9% decrease in comparable sales, reflecting decreased e-commerce comparable sales and same store sales, and a 7% decrease in the average number of stores in the firstsecond quarter of Fiscal 2027,2027 partiallyand offsetan by a favorableunfavorable impact of $3.7$0.6 million due to changes in foreign exchange rates. We prioritized more full-priced selling over discounts and controlled markdownspromotions in Schuh Group during the firstsecond quarter of Fiscal 2027 but this pressured store trafficsales in anstores alreadyand weaker U.K. consumer marketonline and especially affected the e-commerce channel which in particular attracts bargain seekers. Schuh Group's sales decreased 9%10% on a local currency basis for the firstsecond quarter of Fiscal 2027. Schuh Group operated 114109 stores at the end of the firstsecond quarter of Fiscal 2027, compared to 121120 stores at the end of the firstsecond quarter of Fiscal 2026.

The 13030 basis point decrease in operating margin for Schuh Group for the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 was due to a 250340 basis point increase in selling and administrative expenses as a percentage of net sales, reflecting deleverage of expenses in the firstsecond quarter of Fiscal 2027, especiallyas sellinga salaries,result compensation,of professionallower fees and occupancy expense, partially offset by decreased marketing expense.revenue. The decrease in operating margin was partially offset by a 120300 basis point increase in gross margin as a percentage of net sales, reflecting lower shipping and warehouse costs and decreased promotional activity,activity partiallyand offsetmore byfull-priced changes in brand mix. In addition, the operating loss included an unfavorable impact of $0.4 million due to changes in foreign exchange rates compared to last year.selling.

Johnston & Murphy Group net sales increased 5.8%5.5% to $81.3$72.5 million for the firstsecond quarter of Fiscal 2027 from $76.8$68.8 million for the firstsecond quarter of Fiscal 2026. The net sales increase for the firstsecond quarter of Fiscal 2027 includes a 7%4% increase in comparable sales, reflecting increased store sales, and a 4%3% increase in the average number of stores in the firstsecond quarter of Fiscal 2027,2027 and increased wholesale sales, partially offset by decreased wholesalee-commerce sales.comparable sales reflecting fewer catalog drops. The performance of Johnston & Murphy's product assortment, both apparel and footwear, as a result of annew updatedand improved product offeringofferings and increased brand awareness through marketing and social media campaigns contributed to increased store and e-commerce sales in the firstsecond quarter of Fiscal 2027. Retail operations accounted for 75.6%83.0% of Johnston & Murphy Group's sales in the firstsecond quarter of Fiscal 2027, up from 72.8%82.3% in the firstsecond quarter of Fiscal 2026. The store count for Johnston & Murphy Group's retail operations at the end of the firstsecond quarter of Fiscal 2027 was 154153 Johnston & Murphy full-price retail and factory stores, compared to 146149 Johnston & Murphy full-price retail and factory stores at the end of the firstsecond quarter of Fiscal 2026.

The 120 basis pointsignificant improvement in operating margin for Johnston & Murphy Group for the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 was primarily due to an 80 basis point increase inincreased gross margin as a percentage of net sales duefrom 54.0% last year to lower73.5% markdowns,in the second quarter this year reflecting tariff refunds of $13.3 million for the Johnston & Murphy Group, tariff mitigation actions, a favorable mix change due to lower wholesale sales and decreased shipping and warehouse expense, partially offset by tariffincreased pressure.retail markdowns. In addition, selling and administrative expenses as a percentage of net sales decreased 4090 basis points for the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 reflecting leverage of expenses, especially marketing and freightcredit card expense, partially offset by increased performance-based incentive compensation expenses.expense, selling salaries and occupancy expense.

Genesco Brands Group's net sales increaseddecreased 3.9%20.8% to $29.7$25.7 million for the firstsecond quarter of Fiscal 2027 from $28.6$32.4 million for the firstsecond quarter of Fiscal 2026 primarily due to increased footwear sales of Dockers and private label products, partially offset by decreased sales of Levi's as we exited that business.business, Thepartially licenseoffset forby theincreased Levi'sfootwear brandsales expiredof in May 2026.Dockers.

Corporate and other expense for the firstsecond quarter of Fiscal 2027 was a gain of $0.5$16.9 million compared to an expense of $7.9$8.3 million for the firstsecond quarter of Fiscal 2026. TheCorporate gain in corporateexpense in the firstsecond quarter of Fiscal 2027 included an asset impairment and other gaincharges of $10.1$8.9 million which included acosts gainrelated fromto paymentproxy cardcontest, interchangelegal feeand litigation,other partially offset by store restructuring charges,matters, costs associated with information technology transformationtransformation, severance and severance.other restructuring and store restructuring. Corporate expense in the firstsecond quarter of Fiscal 2026 included asset impairment and other charges of $0.3$0.1 million for severance. The corporate expense increase,decrease, excluding asset impairment and other charges, primarily reflects decreased compensation expense partially offset by additional information technology transformation expenses and increased performance-based incentive compensation expense in the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026.

Net interest expense decreased $1.0$1.5 million tofrom $0.3$1.5 million in the firstsecond quarter of Fiscal 2026 to essentially zero net interest in the second quarter of Fiscal 2027 compared to $1.3 million in the first quarter of Fiscal 2026 primarily reflecting decreased revolver borrowings in North America in the firstsecond quarter of Fiscal 2027 compared to the firstsecond quarter of Fiscal 2026 and increased interest income in the firstsecond quarter of Fiscal 2027 as a result of increased$0.7 investmentsmillion in interest income on tariff refunds during the firstsecond quarter this year.

Cash used in operating activities was $1.7$11.7 million higher in the first threesix months of Fiscal 2027 compared to the first threesix months of Fiscal 2026, reflecting primarily the following factors:

•a $52.3 million decrease in cash flow from changes in prepaids and other current assets, primarily reflecting the receipt of a $23.0$58.3 million income tax refund receivable in the first six months of Fiscal 2026; and a $37.2 million decrease in cash flow from changes in inventory, primarily reflecting a $43.2$107.4 million increase in inventory in the first threesix months of Fiscal 2027 compared to a $20.2$70.1 million increase in inventory in the first threesix months of Fiscal 2026; partially offset by •a $28.4 million increase in net earnings primarily due to the $22.5 million tariff refund, including interest, in the first six months of Fiscal 2027; and a $19.4$35.2 million increase in cash flow from changes in accounts payable, primarily reflecting changes in timing of rent payments and changes in buying and receipt patterns in the first threesix months of Fiscal 2027 compared to the first threesix months of Fiscal 2026.

Cash used in investing activities was $3.5$1.8 million lower for the first threesix months of Fiscal 2027 as compared to the first threesix months of Fiscal 2026 reflecting decreased capital expenditures primarily related to omni-channel capabilitiescapabilities, andpartially offset by increased investments in retail stores.

Cash provided by financing activities was $67.3$44.8 million lower in the first threesix months of Fiscal 2027 as compared to the first threesix months of Fiscal 2026 primarily reflecting decreased net borrowings, partially offset by decreased share repurchases.

As of MayAugust 2,1, 2026, we have borrowed $15.0 million U.S. revolver borrowings, $7.9$9.1 million (CAD $10.8$12.7 million) revolver borrowings related to GCO Canada ULC and $22.4$6.7 million (£16.55.0 million) related to Schuh revolver borrowings. We were in compliance with all the relevant terms and conditions of the Credit Facility and the Facility Agreement as of MayAugust 2,1, 2026.

In addition, as discussed in Item I,1, Note 7, “Legal Proceedings,” to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we expectreceived to receivetariff refunds of approximately $23 to $25$21.8 million, not including interest, related to tariffs previously collected under IEEPA. The timing of cash receipts is dependent upon the execution of the refund process by CBP and the U.S. Treasury Department.

Our contractual obligations at MayAugust 2,1, 2026 increased 9%13% compared to January 31, 2026, primarily due to increased long-termlease debtobligations and leaselong-term obligations.debt.

We did not repurchase any shares of our common stock during the second quarter and first quartersix months of Fiscal 2027. We repurchased 604,531 shares of our common stock during the first threesix months of Fiscal 2026 at a cost of $12.6 million, or an average cost of $20.79 per share. We havehad $29.8 million remaining as of MayAugust 2,1, 2026 under our expanded share repurchase authorization announced in June 2023. During the secondthird quarter of Fiscal 2027, through JuneSeptember 10,9, 2026, we have not repurchased any317,503 shares of our common stock.stock at a cost of $11.0 million, or an average cost of $34.65 per share. As of September 9, 2026, we have $18.8 million remaining under our expanded share repurchase authorization. We continue to view share repurchases as an important component of our balanced capital allocation strategy and are committed to deploying excess capital.

Descriptions of recently issued accounting pronouncements, if any, and the accounting pronouncements adopted by us during the firstsecond quarter of Fiscal 2027 are included in Note 1 to our Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.