Shares of Genesco (Genesco (GCO)) jumped on Friday after the footwear and apparel retailer delivered first-quarter results that beat Wall Street's expectations and raised its full-year earnings outlook. Investors also cheered the company's cost-cutting plans and the prospect of tariff refunds that could give profits an extra boost.

For the quarter ended May 2, Genesco reported an adjusted loss of $2.18 per share, narrower than the $2.56 loss analysts had expected. Revenue rose 3% year over year to $487 million, topping the consensus estimate of $475 million. Comparable sales increased 2%, driven by a 3% gain in stores, while e-commerce sales were flat.

Gross margin expanded by 30 basis points, helped by lower shipping and warehouse costs and less promotional activity. Those gains were partly offset by changes in brand mix at Journeys and Schuh.

Breaking down the brands: Journeys delivered a 5% increase in comparable sales, while Johnston & Murphy posted even stronger growth of 7%. Schuh, however, saw comparable sales drop 9% as the retailer intentionally pulled back on promotions to focus on full-price selling.

"Journeys' comparable sales grew mid-single-digits on top of a high-single-digit gain last year, as our work around product elevation and customer experience continues to drive market share gains," CEO Mimi E. Vaughn said. "At the same time, Johnston & Murphy's comparable sales accelerated sharply, increasing high-single-digits, while Schuh's comparable sales performance reflects our decision to pull back on promotions and prioritize a more full-price selling model."

Genesco ended the quarter with $27.1 million in cash, up from $21.7 million a year earlier, and total debt of $45.3 million.

Tariff Refunds and Cost Savings

One of the more interesting pieces of the story is the tariff refunds. Genesco said it expects to receive between $23 million and $25 million in refunds related to its branded businesses and has already submitted claims. Those refunds were not included in the first-quarter results or the company's fiscal 2027 guidance, so they represent potential upside.

The company also announced a cost-reduction program expected to generate $40 million to $50 million in savings through fiscal 2029.

Outlook

Genesco raised its fiscal 2027 adjusted earnings guidance to a range of $2.00 to $2.40 per share, up from its previous forecast of $1.90 to $2.30 per share. The new range brackets the analyst consensus of $2.13 per share. The company affirmed its revenue guidance of $2.412 billion to $2.436 billion, compared with the analyst estimate of $2.434 billion, and maintained its expectation for comparable sales growth of 1% to 2% for the year.

Shares were up 4.37% at $37.97 on Friday, approaching their 52-week high of $38.95. The stock has been on a steady climb as investors warm to the turnaround story.