Market Performance - The Nasdaq Composite and S&P 500 indexes gained 0.68% and 0.52% respectively, while the Dow Jones Industrial Average fell by 0.27% last week, indicating mixed market performance [1] - The manufacturing purchasing managers' index (PMI) for January was reported at 50.9%, up from 49.2% in December, suggesting expansion in manufacturing activities [2] Employment and Wages - U.S. nonfarm payrolls increased by 143,000 jobs in January, below the estimate of 169,000, indicating a slowdown in job market growth [2] - The unemployment rate was recorded at 4.0%, the lowest since May, while average hourly earnings increased by 0.5%, exceeding analysts' expectations of 0.3% [2] Trade Relations - The trade war between the U.S. and China remains a concern, with China imposing targeted tariffs on U.S. imports in response to President Trump's trade policies [3] Stock Performance and Recommendations - Versus Systems Inc. (VS) shares gained 16.6% since being upgraded to Zacks Rank 2 (Buy) on December 13, outperforming the S&P 500 [4] - Urban Outfitters, Inc. (URBN) saw an 11.6% return since its upgrade to Zacks Rank 1 (Strong Buy) on December 4 [5] - A hypothetical portfolio of Zacks Rank 1 stocks returned +22.3% in 2024, compared to +28% for the S&P 500 index [5] Focus List and Model Portfolios - Palantir Technologies Inc. (PLTR) gained 89.8% over the past 12 weeks, while Deere & Company (DE) returned 18.2% in the same period [11] - The Zacks Focus List portfolio returned +29.54% in 2023, outperforming the S&P 500 index [12] - The Zacks Earnings Certain Admiral Portfolio (ECAP) returned +16.26% in 2024, compared to +24.89% for the S&P 500 index [15] Dividend Stocks - Intercontinental Exchange, Inc. (ICE) returned 6.7% over the past 12 weeks, while Quest Diagnostics Incorporated (DGX) increased by 3.9% [17] - The Zacks Earnings Certain Dividend Portfolio (ECDP) returned +6.95% in 2024, underperforming the S&P 500 index [19] Long-term Performance - The Zacks Top 10 portfolio has produced a cumulative return of +1,998% since 2012, significantly outperforming the S&P 500 index's +461.86% [21]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point, as stocks may lose momentum when their valuations exceed future growth potential [2] - Investing in bargain stocks that exhibit recent price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify promising stocks [3] Group 2: Genesco (GCO) Analysis - Genesco (GCO) has shown a four-week price change of 3.7%, indicating growing investor interest [4] - Over the past 12 weeks, GCO's stock has gained 50.6%, with a beta of 2.37, suggesting it moves 137% higher than the market [5] - GCO has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - GCO has received upward revisions in earnings estimates, earning a Zacks Rank 1 (Strong Buy), which is associated with strong momentum effects [7] - The stock is trading at a Price-to-Sales ratio of 0.20, suggesting it is undervalued, as investors pay only 20 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides GCO, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - The Zacks Premium Screens offer over 45 different strategies to help identify potential winning stocks based on various investing styles [9]

Core Insights - Genesco Inc. experienced a 10% increase in comparable sales for Q4 2024, driven by the holiday season [1][2] - The company upgraded its fiscal 2025 earnings guidance to a range of 80 cents to $1.00 per share, reflecting confidence in profitability [1][6] - The Zacks Consensus Estimate indicates a projected annual growth of 44.6% in earnings per share (EPS) for Genesco [11] Sales Performance - Comparable sales growth of 10% includes both physical stores and e-commerce, with same-store sales up 6% and e-commerce sales up 20% [2] - The Journeys Group led the sales growth with a 14% year-over-year increase, while the Schuh Group grew by 3%, and Johnston & Murphy Group saw a slight decline of 1% [3] Management Commentary - CEO Mimi E. Vaughn noted that sales at the Journeys Group exceeded expectations during the holiday season, attributed to strong full-price selling [4] - The success in sales has led to increased incentive compensation expenses and accelerated store closures as part of a strategy to optimize the retail footprint [5] Future Outlook - Genesco plans to leverage the success of the Journeys Group to drive growth in fiscal 2026, focusing on sustainable profitability through investments in digital platforms and cost optimization [7] - The company aims to enhance its core brands and align with consumer trends to strengthen its competitive position [9] Strategic Initiatives - Genesco is optimizing its store footprint and introducing modern designs to improve customer experience and brand perception [10] - The company’s strategic focus on digital marketing and customer engagement has amplified its reach among style-conscious consumers [9]

Core Viewpoint - In 2025, stocks are expected to rise due to Donald Trump's pro-growth plans, the Federal Reserve's interest rate policies, and a robust U.S. economy, with a focus on selecting stocks that exhibit strong earnings acceleration to capitalize on this trend [1]. Earnings Acceleration - Earnings acceleration refers to the incremental growth in a company's earnings per share (EPS), indicating an increase in the quarter-over-quarter earnings growth rate within a specified timeframe [3]. - Stocks that demonstrate earnings acceleration are likely to experience a rally in share prices, as this metric highlights companies that have not yet attracted investor attention [4]. Screening Parameters - The screening process involves identifying stocks where the last two quarter-over-quarter EPS growth rates exceed previous periods' growth rates, with projected EPS growth rates for the upcoming quarter expected to surpass prior periods [6]. - Specific criteria include: - EPS % Projected Growth (Q1)/(Q0) must be greater than EPS % Growth (Q0)/(Q-1) [7] - EPS % Growth (Q0)/(Q-1) must be greater than EPS % Growth (Q-1)/(Q-2) [8] - Current Price must be greater than or equal to $5 and average 20-day volume must be greater than or equal to 50,000 [8]. Top Stocks Identified - Genesco Inc. (GCO) has a Zacks Rank 1 (Strong Buy) with an expected earnings growth rate of 44.6% for the current year [9]. - Lands' End, Inc. (LE) also holds a Zacks Rank 1, with an expected earnings growth rate of 373.3% for the current year [10]. - Mercury General Corporation (MCY) has a Zacks Rank 1 and an expected earnings growth rate of 1,583.3% for the current year [11].

Core Viewpoint - The article discusses the potential of Genesco (GCO) as a strong candidate for investment due to its recent price momentum and favorable valuation metrics. Group 1: Stock Performance - GCO has experienced a significant price increase of 52.3% over the past 12 weeks, indicating strong momentum [3] - The stock has a four-week price change of 30.6%, reflecting growing investor interest [8] - GCO has a Momentum Score of A, suggesting it is an opportune time to invest [9] Group 2: Earnings and Valuation - GCO has seen upward revisions in earnings estimates, contributing to its Zacks Rank 1 (Strong Buy) status [4] - The stock is currently trading at a Price-to-Sales ratio of 0.20, indicating it is attractively priced at 20 cents for each dollar of sales [13] Group 3: Investment Strategy - Momentum investing is highlighted as a strategy that contrasts with traditional methods, focusing on buying high and selling higher [7] - The Zacks Momentum Style Score and the 'Fast-Paced Momentum at a Bargain' screen are tools to identify promising momentum stocks [7]

Sales Performance - Net sales increased 2.9% to $596.3 million in Q3 Fiscal 2025 compared to $579.3 million in Q3 Fiscal 2024, driven by a 6% increase in comparable sales[58] - E-commerce comparable sales rose by 15%, while same store sales increased by 4%[58] - Journeys Group net sales increased 3.8% to $362.5 million, with an 11% increase in comparable sales[73] - Schuh Group net sales increased 3.1% to $121.8 million, but operating income decreased by 43.1% to $3.1 million[78] - Johnston & Murphy Group net sales decreased 3.6% to $78.5 million, with a significant decline in operating income[80] - Genesco Brands Group's net sales increased by 10.2% to $33.5 million for Q3 Fiscal 2025 from $30.4 million in Q3 Fiscal 2024, driven primarily by increased sales of Levi's and Dockers footwear[83] - For the first nine months of Fiscal 2025, net sales decreased by 0.4% to $1.579 billion from $1.586 billion in the same period last year, impacted by decreased comparable store sales and net store closings[87] - Johnston & Murphy Group's net sales decreased by 5.4% to $228.7 million for the first nine months of Fiscal 2025, primarily due to decreased wholesale sales and a 3% decrease in comparable sales[100] - Schuh Group's net sales increased by 1.4% to $338.7 million in the first nine months of Fiscal 2025, but total comparable sales decreased by 3%[97] - Genesco Brands Group's net sales decreased by 10.0% to $90.9 million for the first nine months of Fiscal 2025, primarily due to the repositioning of the business[102] Financial Metrics - Gross margin increased by 2.5% to $285.3 million, but as a percentage of net sales, it decreased from 48.1% to 47.8%[59] - Selling and administrative expenses rose by 2.8% to $274.9 million, but decreased as a percentage of net sales from 46.2% to 46.1%[60] - Operating margin was 1.7% in Q3 Fiscal 2025, down from 1.9% in Q3 Fiscal 2024, primarily due to decreased gross margin[61] - The effective income tax rate was 311.5% in Q3 Fiscal 2025, reflecting a $26.3 million U.S. valuation allowance due to uncertainty in realizing tax benefits[63] - The operating margin improved to 11.1% in Q3 Fiscal 2025 from a loss of 5.1% in Q3 Fiscal 2024, attributed to increased gross margin and decreased selling and administrative expenses[84] - The net loss for Q3 Fiscal 2025 was $18.9 million, or $1.76 diluted loss per share, compared to net earnings of $6.5 million, or $0.60 diluted earnings per share in Q3 Fiscal 2024[65] - The net loss for the first nine months of Fiscal 2025 was $53.3 million, or $4.90 diluted loss per share, compared to a net loss of $44.0 million, or $3.88 diluted loss per share, in the same period last year[94] Expenses and Cash Flow - Corporate and other expenses rose to $9.7 million in Q3 Fiscal 2025 from $7.8 million in Q3 Fiscal 2024, reflecting increased performance-based compensation[85] - Net interest expense decreased by 45.0% to $1.2 million in Q3 Fiscal 2025 compared to $2.2 million in Q3 Fiscal 2024 due to reduced average borrowings[86] - Corporate and other expenses for the first nine months of Fiscal 2025 were $27.2 million, down from $52.1 million in the same period of Fiscal 2024, reflecting a significant reduction in impairment charges[104] - Net interest expense decreased by 44.8% to $3.4 million in the first nine months of Fiscal 2025, compared to $6.2 million in the same period of Fiscal 2024, due to decreased average borrowings[107] - Cash used in operating activities increased by $5.6 million in the first nine months of Fiscal 2025, primarily due to a $54.8 million increase in cash flow from changes in accounts payable[109] - Cash used in investing activities was $22.3 million lower in the first nine months of Fiscal 2025 compared to the same period in Fiscal 2024, reflecting decreased capital expenditures[110] - Cash provided by financing activities increased by $7.3 million in the first nine months of Fiscal 2025, compared to the same period in Fiscal 2024, due to decreased share repurchases[111] Capital Expenditures and Debt - Total capital expenditures for Fiscal 2025 are expected to be approximately $45 million to $50 million, with 67% allocated for new stores and remodels[119] - As of November 2, 2024, the company had $96.1 million in U.S. revolver borrowings and $4.0 million related to GCO Canada ULC, remaining compliant with all credit facility terms[113] - Contractual obligations increased by 7% compared to February 3, 2024, primarily due to increased long-term debt[118] Tax Refunds - The company anticipates generating approximately $55 million of net tax refunds under the CARES Act, with $26 million received in Fiscal 2022[114]

Financial Performance - Total net sales for Q3 Fiscal 2025 increased 3% to $596 million, with comparable sales rising 6%[4] - Comparable e-commerce sales surged 15%, while comparable store sales grew by 4%[4] - The company raised its sales guidance for Fiscal 2025 to a decrease of 1% to flat compared to Fiscal 2024[2] - Adjusted diluted EPS guidance for Fiscal 2025 is now projected to be between $0.80 and $1.00, up from previous guidance of $0.60 to $1.00[12] - The company reported a net loss of $18,932 thousand for the quarter, translating to a loss of $1.76 per share, compared to net earnings of $6,539 thousand and earnings of $0.60 per share in the previous quarter[19] - For the nine months ended Nov. 2, 2024, net sales were $1,579,113 thousand, slightly down from $1,585,674 thousand in the same period last year[22] - The operating loss for the nine months was $32,192 thousand, representing -2.0% of net sales, an improvement from -3.2% in the previous year[22] - Loss from continuing operations for the nine months was $53,065 thousand, or -3.4% of net sales, compared to -2.8% in the previous year[22] Sales and Revenue Breakdown - Journeys Group reported a comparable sales increase of 11%, recovering from an 8% decline in the previous year[5] - The Journeys Group accounted for 60.8% of net sales in the quarter, with sales of $362,517 thousand, up from 60.3% in the previous quarter[24] - The Schuh Group maintained a consistent 20.4% of net sales in both the current and previous quarter, with sales of $121,826 thousand[24] - Total comparable sales increased by 6% for the quarter ending November 2, 2024, compared to a decline of 4% in the same quarter last year[31] - Comparable sales for the Journeys Group increased by 11% for the quarter ending November 2, 2024, compared to a decline of 8% in the same quarter last year[31] Profitability and Margins - GAAP EPS was ($1.76), while Non-GAAP EPS was $0.61, reflecting a significant impact from a U.S. valuation allowance[2][8] - Gross margin decreased by 30 basis points to 47.8% due to changes in product mix at Journeys[7] - Gross margin for the quarter was $285,256 thousand, accounting for 47.8% of net sales, compared to 48.1% in the previous quarter[19] - The adjusted operating income for the total company was $10,210 thousand for the quarter ending November 2, 2024, compared to $10,852 thousand in the same quarter last year[41] - The adjusted gross margin for the period was $748,926,000, which is 47.4% of sales, down from 47.7% in the previous period[44] Assets and Liabilities - Cash as of November 2, 2024, was $33.6 million, up from $21.7 million a year earlier, while total debt decreased to $100.1 million[9] - Total assets decreased to $1,435,521 thousand from $1,492,931 thousand, a decline of approximately 3.8%[28] - Total current liabilities increased to $422,082 thousand from $397,164 thousand, an increase of about 6.3%[28] - The company’s long-term debt decreased to $100,114 thousand from $128,163 thousand, a reduction of approximately 21.9%[28] Store Operations - The company closed 12 Journeys stores in Q3, totaling 41 closures for Fiscal 2025, with plans for up to 10 more closures[12] - The company had a total of 1,341 retail stores as of November 2, 2024, down from 1,410 stores a year earlier[29] Future Projections and Guidance - Forecasted earnings from continuing operations for fiscal year ending February 1, 2025, are projected between $8.8 million and $11.0 million, translating to an EPS of $0.53 to $1.00[47] - The company anticipates a tax rate of approximately 27% for fiscal 2025[47] - The company disclaims any obligation to update future expectations and estimates, which may vary materially from actual results[48] - Charges related to the distribution model transition are estimated at $1.3 million, impacting EPS by $0.12[47] - Total asset impairments and other adjustments are expected to be around $1.3 million, affecting EPS by $0.12[47]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investors often face challenges in determining the right entry point for fast-moving stocks, which can lose momentum if future growth does not justify high valuations [2] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify these opportunities [3] Group 2: Genesco (GCO) Stock Analysis - Genesco (GCO) has shown a significant price increase of 29.7% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, GCO's stock has gained 55.8%, with a beta of 2.47, suggesting it moves 147% higher than the market in either direction [5] - GCO has a Momentum Score of B, indicating a favorable time to invest based on momentum [6] Group 3: Earnings Estimates and Valuation - GCO has received a Zacks Rank 1 (Strong Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - The stock is currently trading at a Price-to-Sales ratio of 0.19, suggesting it is undervalued at 19 cents for each dollar of sales [7] Group 4: Additional Investment Opportunities - Besides GCO, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Company Overview - Genesco (GCO) shares increased by 8.4% to $29.45 in the last trading session, with a higher-than-average trading volume [1] - The stock has shown a modest gain of 0.2% over the past four weeks [1] Market Sentiment and Positioning - The rise in Genesco's stock price is attributed to positive market sentiment following a clear political mandate for Trump, indicating a stable political environment [2] - The company is focusing on product innovation, expanded assortments, and enhanced consumer experiences, particularly in the youth footwear market [2] - Ongoing digital growth and effective marketing strategies are expected to bolster Genesco's long-term growth potential [2] Financial Expectations - Genesco is projected to report quarterly earnings of $0.22 per share, reflecting a year-over-year decline of 61.4% [3] - Expected revenues for the upcoming quarter are $573.56 million, which is a 1% decrease from the same quarter last year [3] - The consensus EPS estimate for Genesco has remained unchanged over the last 30 days, indicating a lack of upward revisions in earnings estimates [4] Industry Context - Genesco operates within the Zacks Retail - Apparel and Shoes industry, where Lulu's Fashion Lounge Holdings, Inc. (LVLU) recently experienced a 15.7% decline in stock price [4] - LVLU's consensus EPS estimate has also remained unchanged, with a projected loss of -$0.07, but showing a 30% improvement compared to the previous year [5]

Financial Performance - Net sales increased by 0.4% to $525.2 million in Q2 Fiscal 2025 compared to $523.0 million in Q2 Fiscal 2024, driven by a strong back-to-school sales week and an 8% increase in e-commerce comparable sales[61]. - Gross margin decreased by 1.6% to $245.6 million, with gross margin as a percentage of net sales declining from 47.7% to 46.8%[62]. - Selling and administrative expenses decreased by 1.7% to $255.1 million, with expenses as a percentage of net sales improving from 49.6% to 48.6%[63]. - Operating margin improved to a loss of 2.0% in Q2 Fiscal 2025 from a loss of 7.4% in Q2 Fiscal 2024, reflecting improved margins in Journeys Group and Genesco Brands Group[64]. - The pretax loss for Q2 Fiscal 2025 was $11.7 million, significantly reduced from a pretax loss of $41.2 million in Q2 Fiscal 2024[65]. - Net loss for Q2 Fiscal 2025 was $10.0 million, or $0.91 diluted loss per share, compared to a net loss of $31.7 million, or $2.79 diluted loss per share, in Q2 Fiscal 2024[66]. Segment Performance - Journeys Group net sales increased by 4.0% to $298.8 million, with total comparable sales decreasing by 1%[73]. - Schuh Group net sales increased by 1.4% to $124.6 million, while total comparable sales decreased by 2%[75]. - Johnston & Murphy Group net sales decreased by 8.7% to $71.0 million, with a 5% decrease in comparable sales[77]. - Johnston & Murphy Group reported an operating loss of $0.4 million in Q2 Fiscal 2025, compared to operating income of $2.7 million in Q2 Fiscal 2024[78]. - Genesco Brands Group's net sales decreased 12.6% to $30.7 million for Q2 Fiscal 2025 from $35.2 million in Q2 Fiscal 2024, primarily due to business repositioning[80]. Operating Income and Expenses - Operating income increased 44.4% to $2.7 million in Q2 Fiscal 2025 compared to $1.9 million in Q2 Fiscal 2024, driven by decreased selling and administrative expenses[81]. - Net interest expense decreased 43.6% to $1.3 million in Q2 Fiscal 2025 from $2.4 million in Q2 Fiscal 2024, reflecting decreased average borrowings[83]. Year-to-Date Performance - For the first six months of Fiscal 2025, net sales decreased 2.3% to $982.8 million compared to $1.006 billion in the first six months of Fiscal 2024, impacted by decreased comparable store sales and net store closings[84]. - Gross margin decreased 3.4% to $461.9 million in the first six months of Fiscal 2025, with gross margin as a percentage of net sales declining from 47.5% to 47.0%[85]. - Journeys Group's net sales decreased 0.2% to $558.3 million in the first six months of Fiscal 2025, with total comparable sales down 3%[91]. - Schuh Group's net sales increased 0.5% to $216.9 million in the first six months of Fiscal 2025, but operating income decreased 78.2% to $1.4 million[93]. - Johnston & Murphy Group's net sales decreased 6.3% to $150.2 million in the first six months of Fiscal 2025, primarily due to a 4% decrease in comparable sales[97]. - Genesco Brands' net sales decreased 18.8% to $57.3 million for the first six months of Fiscal 2025 from $70.6 million in the first six months of Fiscal 2024[99]. - The net loss for the first six months of Fiscal 2025 was $34.3 million, or $3.14 diluted loss per share, compared to a net loss of $50.6 million, or $4.37 diluted loss per share, in the first six months of Fiscal 2024[90]. Corporate Expenses and Cash Flow - Corporate expenses for the first six months of Fiscal 2025 were $17.5 million, down from $44.3 million in the same period of Fiscal 2024, primarily due to a decrease in non-cash impairment charges[102]. - Net interest expense decreased by 44.6% to $2.2 million in the first six months of Fiscal 2025 compared to $4.0 million in the same period of Fiscal 2024, reflecting reduced average borrowings[103]. - Cash used in operating activities was $19.1 million lower in the first six months of Fiscal 2025, driven by a $50.2 million increase in cash flow from changes in accounts payable[104]. - Cash used in investing activities decreased by $20.9 million in the first six months of Fiscal 2025, primarily due to reduced capital expenditures related to omni-channel capabilities[105]. Capital Expenditures and Liquidity - Total capital expenditures for Fiscal 2025 are expected to be approximately $52 million to $57 million, with 63% allocated for new stores and remodels[111]. - The company repurchased 381,711 shares at a cost of $9.3 million during the first six months of Fiscal 2025, with an average cost of $24.49 per share[112]. - As of August 3, 2024, the company had $75.1 million in U.S. revolver borrowings and $2.7 million related to GCO Canada ULC, remaining compliant with all credit facility terms[106]. - The company anticipates that cash on hand, cash from operations, and borrowings will be sufficient to support liquidity needs in Fiscal 2025 and the foreseeable future[108]. - Contractual obligations decreased by 1% compared to February 3, 2024, mainly due to reduced lease obligations and purchase obligations[110]. - The company expects to generate approximately $55 million of net tax refunds from tax strategies implemented under the CARES Act, although the timing may be extended due to an IRS audit[109].