GCOGenesco Inc.
Is the business good?
A genuinely good business: earnings fully cash-backed (3.1×) and margins widening.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has widened over the past few years, the business is getting more profitable per dollar of sales.
A balanced mix of margins, efficiency, and leverage. ROE 3% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is GCO?
Genesco Inc. earns 7.4% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 1.6 points below what the capital costs: growth destroys value
- Operating margin
- 2.0%
Operating margin · Apparel Retail median 8.0% · 12 months to Q2 2027
- Cash conversion
- 3.07×
Cash conversion · 7.30× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- +6.0%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2021 | −6.0% |
| FY2022 | 6.4% |
| FY2023 | 3.9% |
| FY2024 | −0.58% |
| FY2025 | 0.60% |
| FY2026 | 0.71% |
Details›
- Gross margin12 months to Q2 2027
- 48%
- Operating margin12 months to Q2 2027
- 2.0%
- Net margin12 months to Q2 2027
- 1.7%
- Free cash flow margin
- 3.0%
- Revenue, trailing twelve months
- $2.43B
- Free cash flow, trailing twelve months
- $74M
- Net income, trailing twelve months
- $42M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 7.4%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.