Good morning, and welcome to this next session of the Goldman Sachs Global Consumer and Retail Conference. My name is Brooke Roach, and I cover the apparel, softlines, and brands sector here at GS, and I am thrilled to introduce this next session with Genesco. Here with me on stage today is Mimi Vaughn, Board Chair, President, and Chief Executive Officer, and Jonathan Collins, SVP Finance and Chief Financial Officer. Welcome, Mimi. Welcome, Jonathan. Hi, Brooke. Thanks for having us this morning. To kick it off, we will show a brief video. [Presentation] That was great. Mimi, could you kick it off by telling us a little bit about where Genesco stands today in its Footwear First strategy? What is the next leg of that strategy that investors should be focused on, and what milestones should we be watching for? Well, you saw, for those of you who do not know us, we are all about footwear, and we have both footwear retail brands as well as footwear brands. What makes us distinctive is that we focus on very specific parts of the consumer market. We have come through a phase where we were building a lot of our digital capabilities. We doubled the size of our digital business. We laid some great tracks for analytic work. We did a lot with the inner connection between stores and online and really have repositioned the company quite a lot. We launched something called a Footwear First strategy, which is all designed to be focused on where the consumer is today and how much they have really changed through the course of the pandemic. Habits changed, how consumers shopped changed, particularly within footwear. Our Footwear First strategy is all about dialing into the exact right product. If you do not have exactly what the consumer wants, if you do not have newness and freshness, they are passing you by because they are having to make choices. So we are very dialed into product overall. We are talking a lot about awareness and how do we raise awareness, because today the consumer finds out and discovers brands and thinks about brands in a very different way. We are thinking about experiences. You saw our fantastic store designs, and we are making the experiences in stores really an outstanding experience for the consumer as well as online. Of course, we are investing in our people and our capabilities because people are who allow you to unlock really wonderful things within retail. I would say to talk about milestones for Journeys, which we will have a chance to talk about, we announced our eighth consecutive into our ninth consecutive quarter of positive comps in terms of the transformation and the reimagining of Journeys. It was interesting to hear the Gap because I think we are all on this journey of how do we really meet where the consumer is today. We are excited about that, so I think that is a great milestone for us. We have improved our bottom line by 100 basis points in each of the last couple of quarters, and so the impact of the initiatives that we are putting together are what we believe are really working. We have got tremendous momentum in our business, and it is a tough footwear environment, and it is a tough consumer environment in general in certain pockets, and we are really outperforming and excited about that. That's great to hear. Jonathan, let's bring you into the conversation. You recently joined Genesco as CFO. What attracted you to the company, and what are your initial impressions of the opportunities ahead? Yeah, I think as I talked to Mimi and the board during the interview process, the two things that really stand out to me were the words mission and opportunity, as you mentioned, Brooke. I'm a very mission-driven person. I spent 13 years at Walmart. They're very mission driven, and I think there's nothing like that feeling of putting on a really nice, well-fitting pair of shoes to really uplift, and give people confidence. Then opportunity, and we'll talk, I'm sure, a lot more about each of our divisions, but, just what a massive opportunity, in terms of executing our Footwear First strategy, as well as the talent we have. I'm super impressed with the whole leadership team and the board and, yeah, just excited to join the company at this time. That's great. Before we dive into the execution of the strategy, let's level set with the consumer. A couple of questions that we're asking all companies at our conference today is one on the health of the consumer and the back half environment, which is, as you look at the second half of 2026 relative to your recent results, do you expect the environment to be the same, better, or worse? Then as you roll that forward into 2027, do you expect the health of the consumer to be better, the same, or worse in 2027 versus 2026? Consumer has absolutely been hanging in there. They want what they want, and they buy what they want. So we have really been the beneficiaries of them buying what they want. I do think in the back half of the year that it will be more challenging, and because of oil prices, gas prices. Gas prices are a real thing. I think that there wasn't a person that I spoke to after Labor Day that didn't talk about gas prices and prices at the pump and filling up at the pump. So I think that's a real point of pain for the consumer, and I think that the fact that diesel is up so high just flows through into overall price inflation. As we look into next year, I believe we were going to get to a better point next year, and the health of the consumer will continue. I think the consumer is in a good place from not having over-borrowed. They are paying down their credit card. We actually saw all stratas of our consumer sectors across demographic groups perform well over back to school. We are encouraged by what we see. We know we have got to be spot on on our assortments, and we plan to be. You mentioned back to school just now, so maybe we can dive a little bit deeper into that. Comps were a bit slower in Journeys in 2Q, but you noted an acceleration quarter -to-date on your call a few weeks ago. Can you talk about the cadence of consumer demand this summer and what you have seen on traffic versus conversion? How has back to school trended as you have moved through some of the timing shifts? Sure. The one thing I would say in terms of how the consumer is shopping is that when there is a reason to shop, and in footwear specifically, when there is a reason to shop, they come out and shop ferociously. When there is not a reason to shop, they sort of take a break and go and do some other things. We saw some of that during the course of the spring, where it was a later spring because it took a while for the weather to warm up. When we got into May, it is typically a lower month for us, but May was actually a good month. As expected, into June and July, the consumer turned their attention to other activities outside of shopping. I think the consumer has a lot of confidence in when they are ready to shop, that they can find what they want to shop in a way they never have before. They really wait until the very last moment to be able to go out and shop. We saw, as expected, that lull that came across through the summer, but then this whole idea of they are coming back, and they are shopping with intensity. They came back, and there was a later Labor Day this year, so there was an entire shift of back to school, which really affected the second quarter. We saw comps move up into the mid-single digits in Journeys, as we expected it would. We had a really strong back -to -school selling season. On top of the last couple of years, we have really strong comps in the third quarter, and on top of very strong stacked comps, performed well. Then we expect the consumer is going to take a break again until the weather gets a bit cooler, and there's a reason to shop over the holidays. Our ability to execute against this and our ability to have the depth of the product is a critical component of capitalizing on those moments when the consumer comes out to shop. That's great. Let's dig into the execution of your strategy, starting with Journeys. As you mentioned earlier, Journeys has now delivered eight consecutive quarters of positive comps, with August accelerating to that mid-single digit level. What's working so well right now, and what do you view as the biggest opportunity to sustain that momentum ahead? Yeah. So the biggest opportunity is to serve a customer group that is six to seven times larger than what we have traditionally served. I think Journeys has always been about serving the teen consumer. What we have done over the course of the last several quarters is that we've dialed further into who specifically are we serving, and we saw an even bigger opportunity within the female market. Journeys has tilted female lately, but we've owned it, we've claimed it, we've said that a lot of the athletic competition serves the male market, the male teen market, in a really good way. But we have an opportunity here to dial into the female consumer to an even greater extent, and that female consumer today wants to experiment with her look. We've talked a lot in the past about were you a skater, were you a surfer, were you Gothic, what were you? In some of the fall campaign, the back -to -school campaign, you saw Madison Bailey. She had three different outfits where she's representing three different versions of herself. So we have an opportunity to serve this teen that's experimenting with who do I want to be? I don't want to be pigeonholed like prior generations were. And we serve across both athletic and casual footwear and have an ability to do all of that. So a bigger market, six to seven times larger, is our opportunity. We've dialed into our assortment. We've improved our assortment. We've elevated our assortment. We have brought specifically a lot more attention to the Journeys brand. We've leaned into our overall marketing and our social campaigns. We've improved our store experience. I'm sure we'll talk about our 4.0 store experience and really feel like we have dialed into this consumer base, and that our consumers are liking what they see. We're reaching out so that more people can come and rediscover what Journeys is all about today. What's next with the Lead with Her strategy that you just mentioned? Yeah. What's next is very much about more of the brand building and awareness building. Our teens are so socially oriented. They learn and discover through social, and our ability to be able to take campaigns like we just had and magnify those campaigns through the influencers we use. The celebrities that we use is working really well. For example, when we launched our Life on Loud, which is the name of our platform and our campaign, we saw that our online traffic improved by 30%, and we saw that our store traffic actually improved significantly to where we were outpacing where the industry was. Our ability to pulse out in those moments when the consumer's ready to shop and to be able to capture that consumer and build awareness is very much front and center in terms of how we are thinking about being able to reach this dynamic demographic that we serve. The other area that is working really well is that you may have seen our 4.0, our new store rollout, and we've had a lot of good success. That store rollout, that store remodel is one thing to call it, but I think it really is the visible representation of the new Journeys strategy and how we're serving the consumer today. We've opened quite a number of those stores. We opened 85 last year. We're opening 95 this year. We expect with an over 25% lift, that that will continue to propel our comps. The awareness building and the continued rollout of the overall 4.0 is how we are seeing continued growth. Is there anything else that we should know about the 4.0 growth strategy from a storage perspective? Jonathan, is there anything that you can share about the economics of the format? Yeah, I think, we've quoted this 25% upliftment that we're seeing. The other thing that I think is an opportunity for us is to really think about how do we take the 4.0 format that we have today, how do we take the kids format that we have today? We have one experiment that we're trying in terms of combining the two and how much leverage will that provide us in terms of selling floor plans and whatnot. I think we're very happy with the economics. We can't roll those out fast enough. They're super high on our priority list in terms of capital deployment. The faster we can accelerate those, I think the faster we'll be able to improve the economics of our business. Yeah. Just to really talk a little bit more and build on what Jonathan is saying. So better traffic, higher conversion, higher ASP. That's part of the formula for the 4.0s. What Jonathan is talking about is that out of the 90+ stores that we will be remodeling this year, 2/3 will be remodels in place, and a 1/3 will be enlarging the stores. We're finding we're performing better in our higher-tiered malls, and we're finding we're performing better in great geographies like California and Texas. Whereas we had stores that averaged a little over 2,000, 2,200, 2,300 sq ft, we're upsizing to 4,000 sq ft. We're trying a few 5,000-sq-ft store footprints, and we think there's really great opportunity here to be able to display. We find that we need more room, particularly in these peak periods. Because we're outperforming in these higher-tiered malls and in really great demographic areas, we're leaning into upsizing the size of our overall store footprint itself. You briefly touched upon this topic on the call, but I'd love to hear a little bit more on the key fashion drivers that are fueling the consumer right now in footwear. There are a few other competitors that have been speaking quite negatively about consumer demand in your category. Are you seeing any impact from this? What's working best from the consumer today, and are you seeing any shifts in how the consumer is preferring different style silhouettes? Yes. So for sure, there's been a lot of conversation about our part of the consumer world, and I certainly say there has been, it's not new, that there's a lot of promotional activity. There has been a lot of promotional activity, and we've stayed full price. I think that, remarkably, in the last several quarters, we've talked about how we have leaned even more so into full-price selling. To lean into full-price selling, you have to have the strength of your assortment in order to pull that off. So I will say that what we are seeing today, and I'll talk about the trends, and it goes right back to we have a very diversified offering. We're able to sell athletic, we're able to sell casual, we're able to sell whatever brands are working, and we can rotate our offering into the brands that we see will be up-and-coming brands. So, we talked about eight brands right now are driving our growth, and those brands are both across athletic and across casual. So that's the strength of our model and the strength of our Journeys model. What we've seen is that we've seen four or five things. There's no one silver bullet in terms of our performance and our outperformance. But one is that we've been able to extend the life of certain footwear franchises. Serving the female customer means that we can extend into different colorways, we can extend into nice patterns, we can extend into animal prints, we can extend into frilly stripes. We can extend into lots of different things that extend the life of the franchises that perhaps others can't extend. We've leaned very hard into some of the trends like low profile, which isn't a new trend, and lifestyle running, which isn't a new trend, but dialing into how can we serve that customer in a way. Journeys is so compelling that we can take a brand, and we can take a silhouette, and we can sell 1 million pairs of it. The strength of being able to lean into a certain style is working nicely for us. We have some new brands that we are selling as well, and we're going against very low numbers in those new brands that we have introduced. Then the ballerina flats, the Mary Jane trend that you're seeing a lot of young girls wear, are more distinctly feminine. The linking back to the diversification and serving her and leaning into her and for her is working nicely together. There are one or two other brands that we're excited about that I'll tell you about a little bit later when we wouldn't be giving away the secret. But really, it's the diversification, and it's the number of different opportunities that we have that have been working well. Our merchant group is extraordinary. They keep finding fantastic ways to unlock what our customer wants to buy and how to serve her in a way that's unique. You mentioned promotional intensity in the early part of that last response. Are you seeing any change in price or mix or promotional intensity in the categories you've moved through back to school specifically? What are your plans for promotions and pricing in the back half of the year? We want to be a full-price seller, and we want to have must-have product as opposed to attracting the customer through selling on promotion. It's harder to do in a promotional environment, but we have been doing it. I'd say that the promotional activity is not new. It's been going on for well over a year at this point in time. Our strategy is to stick to what we're doing and to stay out of the fray, because when you start to promote your way down to the bottom, most of the time, our industry promotes when we're in an over-inventoried position. I think that certainly on the athletic side, there is some over-inventoring, and so we're anticipating the back half to be more promotional. But we will do our all as we have been doing to stay out of that promotional fray. Does that mean that your prices and AUR are going to be higher, lower, or the same in the back half of the year versus the first half? They were higher in the front half of the year, and we expect that they will be higher in the back half of the year. I would not expect a big step up, but I also would not expect that we are going to promote our way into lower price points. One other topical commentary that we continue to get a lot of questions about is weather forecasts. There are a lot of forecasters out there that think that we might have a super El Niño year, and there is some concern about what that means for cold weather categories. You sell a lot of boots. I am curious, how are you planning the business this year for the boots and cold weather category? Yeah. The boots we sell are purely fashion. They are not necessarily for cold weather. The funny stories that I hear are that it was 90 degrees, and we are based in Nashville. It was 90 degrees when our kids went back to school, and we had kids showing up in UGG. UGG, you are very warm when you are wearing your UGG, but it is all about fashion. If you are a middle school girl, then you want to be on trend, and you are going to show up, and you are going to be wearing whatever is on fashion. At the margin, we are not weather dependent. We do like to see triggers that tell the consumer it is time to shift seasons, and it is time to think about changing your wardrobe. We certainly have not seen that. It's been so hot through the course of the summer and into the fall that that trigger that tells the consumer it's time to start mixing up your wardrobe hasn't happened yet, but it's just timing in terms of when that happens. I think there will be a shift in timing for us, but that it doesn't necessarily mean that it will impact the season. And in some places, I think there's going to be record snowstorms. We'll really see what ends up happening. Fingers crossed. Yeah, hopefully. Hopefully in the right areas. In the right ski areas. The right ski areas, right. Let's shift to Schuh. Can you talk a little bit more about the recent performance that you've seen in the Schuh banner? What are the most important milestones that we should be watching that would demonstrate that the investments that you're making are working? For those who don't know, Schuh is our U.K.-based business that we acquired when we went to open Journeys stores. You can think about Schuh and Journeys really being the same business, and we see the same opportunity at Schuh that we have just been in the process of unlocking in Journeys. Our Journeys turnaround has been fast. We've added $50 million to the bottom line over the last couple of years with all these strategies that I have been talking about. For this year, we were in that race of promoting in Schuh because it's been an even more promotional environment in the U.K. We are pulling back on that promotional activity. We're getting back to full-price selling. I think you asked, what are the markers? What should we be watching? What we saw is that we had a lot of headwinds on comp as a result of pulling back on promotions, but we had a 300 basis point pickup in gross margins. From that point of view, the strategy is working. We're actually seeing that pullback online because there tends to be a more discount-oriented shopper shopping in the U.K. Our first step is pull back on promotional activity. We were almost at the same level bottom line, even with such a big give up in sales because of the improvement that we had. I think through the course of this year, continue to watch us pulling back on promotional activity, but at the same time, as we're managing costs and the like, we are leaning into better product, better assortment, the elevation of the assortment, the dialing into the consumer base, the leaning to the Lead with Her strategy is very much what we are doing in the U.K. I think that as we see the lines cross where we are seeing less headwinds from pulling back on promotions and more opportunity from dialing into the must-have brands and elevating the assortment that you will see the lines cross, and you'll see some of the same traction that we achieved within Journeys. We've just put in a fantastic new head of the business. He comes from PUMA. He was at PUMA at a point in time and ran Foot Locker's biggest international businesses. Tomas Petersson is our new Head of our Schuh business, and we feel very fortunate and lucky to have such an extraordinarily good fit to be able to lead the next generation of improvement in Schuh. That's great to hear. Let's shift to Johnston & Murphy. You've made several changes to that banner over the last year. How are you thinking about the drivers of sustained brand growth over time, and how should we be thinking about category expansion as the brand continues to build? Sure. I'll start with category expansion, and I'm sure some of you have seen how much we've expanded categories within Johnston & Murphy. Johnston & Murphy was known as a dress shoe resource. We have grown our non-footwear business, where it is 50%, and in our airport stores and other places, it's more than 50% of our overall assortment. I'd say with Johnston & Murphy, we are seeing an extraordinary moment in time right now, where our consumer wants to dress up more. I think that the pendulum is swinging back from years of sitting around in your hoodies and your sneakers, and we're seeing that the customer wants to dress up again. Johnston & Murphy's very well-positioned for that. We were doing a lot of this category expansion coming out of the pandemic. Then we hit a lull, quite frankly, where we weren't refreshing our product enough. We've spent a lot of time thinking about how do we shorten our lead times, how do we drop more within seasons. We're able to do that with apparel more quickly than we are with footwear because of the cycle times and the lead times. We've seen the customer respond so well to knits and to our blazers. We're putting a lot of stretchiness into the materials, a lot of the technology into the materials, and seeing some great consumer response. It's the product and the strength of the product assortment that is driving Johnston & Murphy. Peyton Manning became our new spokesperson about a year ago. If you were watching CNBC this morning, you saw Peyton in our new campaign with Peyton for the next couple of years. What is exciting about Peyton is that we knew that he would resonate with our customer base. He's got more than 85% awareness across our customer base. We thought it might be with an older customer, but we're seeing the under 25, the 25 - 35, and 35 - 45-year-olds new customer base growing at a faster rate than we're seeing in the rest of the consumer base. I think it is really the strength of the assortment coupled with the building awareness in this recent campaign that has been driving Johnston & Murphy. We're against the backdrop of a moment in time that the consumer is changing their looks, and that's always really great for us who are selling products for them. Excellent. Let's shift to the margins of the business. Jonathan, you recently announced a $40 million - $50 million structural cost-saving program through fiscal 2029. How should we be thinking about the major work streams and the sequencing of the opportunity, and how much is going to be reinvested versus flowed through to the bottom line? Yeah, I think, we did announce the structural cost savings. I think just on gross margin, there is still opportunity there to get more back to full price selling, and we talked about Schuh a little bit. Specifically on the cost savings program, there are very, very positive proof points. Just in the last quarter that we announced, year-over-year, we had a $6 million reduction in our cost base. That is largely off the back of this IT cost transformation program that we have. Going forward, there is a massive opportunity around automation, particularly in our supply chain. Leveraging AI, not just from how do we leverage AI for consumers and help the shopping journey along a little bit, but also in just the way we work and how we work and to do more with the resources that we have today. Those are kind of the major levers, and again, quite pleased with how we have executed to date. Some pretty good proof points for us to be able to deliver that. That is great to hear. You mentioned AI, and AI is actually one of the questions that we are asking all companies at the conference today. I am curious if you can share a little more. Do you expect a significant increase in efficiency as a result of AI in 2027 versus 2026? What part of the business will change the most as a result of AI over the next year? I think we do not know, I should answer it this way. Every part of the business will change. I think AI has changed so fast. If you go back, even probably three years ago, nobody even knew who ChatGPT was. I think we are quite excited about leveraging AI in three ways. One is just with our employee base, how do they improve what they do every day? It is really a force multiplier based on their work. Number two is how does it improve the places where the customer maybe does not see so much, so product planning, design, et cetera. Then three, how do we leverage AI in where the customer does engage us? If you go online today and you do an online shopping journey, at the bottom of the buy box in the page on Johnston & Murphy, it will tell you, "Hey, you're buying for shoes. You can complete this look with knits and pants and complete your wardrobe with it." I can just imagine a day where that leverages AI to be more informed in what specific thing the customer is shopping for, what specific event. Are they shopping for work? Are they shopping for, say, a wedding or an outing or whatnot? I think it will help us across all those different areas. Another question that we're asking all companies at our conference today is on the 2027 margin environment. Do you expect to see more meaningful margin headwinds or more margin tailwinds in 2027 versus 2026, and can you elaborate? Yeah, I think for us, there's opportunity, as I mentioned. Our long-run average for gross margin rate is about 38%, and we're sitting at about 37% today. So there's definitely opportunities there to pull back on some margin. I would expect that there's going to be continued cost pressure. We haven't necessarily seen fuel prices flow through, particularly freight charges weren't elevated. But I would expect that to come into play as we move forward. But for us, regardless of the environment, we control what we can control, and we always focus on how do we lower the costs from a cost perspective, but then make sure we're executing our strategy so that we continuously focus on expanding our margins. Let's tie this all together. What do you see as an achievable medium-term EBIT margin for the business, and what are the most important drivers in delivering that level? Yeah. Frankly, we have gone through some challenges in our business, and this rebuilding our businesses is what we have embarked on over the last couple of years and are showing real positive, as I keep talking about, momentum, because of the actions that we are taking. To get back to a 4% operating margin, which on our base would be about $100 million of operating income, we are striving hard for in the next couple of years. We've bought back over 50% of our shares, so we have a tremendous amount of leverage within our operating model and the improvement that we put up, that $100 million is almost a $7, $6 - $7 share price, so there's a lot of step up and a lot of opportunity. Even if you look at where we were last year to this year, we have a lot of ability to do that. It is a combination of thinking about how do we continue to grow positively. This is an unusual year for us in that our sales are going down because we're closing stores, we're anniversarying a license, and we are pulling back on Schuh promotions. But all the work we're doing around cost savings, layering on top of that a return to growth and top-line growth on top of very minimal cost increases is what will drive us going forward. We've got heads down. I think this year provides great evidence of the path that we're on and the progress that we are making. One last question for you, Jonathan, on capital allocation. You've outlined a lot of opportunities today where you could invest some capital, whether that's the 4.0 stores, Johnston & Murphy expansion, tech, inventory, as well as share repurchases. How should we be thinking about the prioritization of those capital uses today? Yeah. Our number one opportunity, I think is our 4.0 stores, and rolling those out and trying to accelerate as quickly as possible. Then all the other things you mentioned, certainly even down to share buybacks, as Mimi mentioned, relative to what we believe, you can look at book value or intrinsic value, we think we're underpriced, and there's definitely an opportunity there. So yeah. It's taking the cash flow that we generate and deploying it across all those areas. And they're all our priorities in their own way from that perspective. Mimi, we're about out of time. Any final thoughts or closing comments that you'd like to leave with the audience? Yeah. I would say that hopefully you've heard today that we are excited about the work that we're doing, and we are dialing into serving these parts of the consumer market in a way that's better than anybody else. I think that's really the key overall to success. As we do that, we see the opportunity to unlock real profit improvement, and the leverage that we talked about on our overall base is one that allows us to drive for significant operating income and EPS growth. I just invite you to learn more about our company, invite you to visit our stores, invite you to certainly buy Johnston & Murphy shoes if none of you are wearing Some of you are not wearing Johnston & Murphy shoes. We have some really great opportunities within our business and are excited to talk more about that with anybody who would like to learn more. Thanks for having us today. Thank you, Mimi. Thank you, Jonathan. Thank you.