You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: These statements reflect the participants' expectations as of today, but the actual results could be different.
Participants also expect to refer to certain adjusted financial measures during the call.
And Tom George, our chief financial officer who will review our Q2 results in more detail and provide direction for Q3.
Following an incredibly strong start to fiscal '22 we delivered an outstanding second-quarter performance as our top line accelerated even further ahead of the pre-pandemic level and we produced record Q2 earnings per share that well exceeded our expectations.
With much stronger revenue highlighted by robust full-price selling and good expense management our second-quarter profit for our footwear businesses also set a new record.
The levels at which our business performed during the first half of the year following a challenging fiscal '21 reflect a strong competitive position of our retail and branded concepts, close connections with our customers, and the compelling execution of our footwear-focused strategy to transform our business and deliver these results.
We are a stronger company coming out of the pandemic.
Our results highlight the work we've done to accelerate online sales and enhance our store and omnichannel offerings, as we create and curate leading footwear brands to be the destination for our consumers' favorite fashion footwear.
Our teams continue to do a superb job providing the right product our customers are looking for combined with exceptional service and differentiated shopping experiences.
Our outperformance was driven by better than anticipated results across the board with all businesses exceeding pre-pandemic profit levels.
As excited as we are with the progress we are making, we are even more excited about our strategy and our future opportunity to build upon this foundation and drive growth, profits, and shareholder value.
I'll begin by providing some highlights from the quarter.
Both revenue and adjusted operating income exceeded pre-pandemic levels increasing 14% and 346%, respectively, over fiscal year '20 two years ago and higher operating profit delivered a record Q2 earnings per share of $1.5, compared with a loss of $1.23 last year and positive $0.15 two years ago all on an adjusted basis.
Additional highlights include delivering another strong quarter of digital results with double-digit operating profit to achieve a 19% digital penetration.
This was driven by a 97% increase in digital revenue compared to fiscal year '20 as we retained almost 80% of last year's volume, which was elevated due to store closures.
Next, driving much higher conversion and transaction size to deliver store sales that were almost at pre-pandemic level, increasing gross margin by 640 basis points versus last year and 50 basis points compared to fiscal '20, driven primarily by higher full-price selling, leveraging adjusted SG&A by 230 basis points compared to pre-pandemic levels and further strengthening of our already strong balance sheet and cash position, enabling a balanced approach of investing in our business while also returning capital to shareholders going forward.
As the vaccine rollout continued and economies on both sides of the Atlantic more broadly reopen, consumers aided by government stimulus stepped up their footwear purchasing in the quarter and chose to shop with our brands to satisfy their pent-up demand.
We were pleased that every channel contributed to the beat versus expectations.
Digital has been a key strategic initiative and the investments we've made have allowed us to double our e-commerce business in two years.
However, we've also talked about how much our customers enjoy our store experience and the important role of our stores as a strategic asset in a compelling omnichannel offering, which proved out once again this quarter.
So turning now to discuss each business in more detail beginning with Journeys.
The Journeys team once again did a tremendous job capitalizing on current market momentum and achieved record revenue and operating profit in the second quarter, marking the third consecutive quarter with record profitability.
Journeys performance, as we emerge from the pandemic, highlights the competitive advantage the business has built and how we are leveraging those advantages to further separate ourselves from the rest of the industry as the destination for fashion footwear for teens.
Leaning into decades of experience and its unparalleled vendor partnerships, Journeys definitely navigated global supply chain disruptions to secure a supply of the brands and styles most coveted by its customers.
The current fashion cycle, which has been shifting more to casual products, plays into Journeys' wheelhouse with strengthened the assortment across the board highlighted by the balance in its top 10 brands evenly split in the quarter between casual and fashion athletic.
On-trend merchandise assortments and effective consumer engagement through social and other channels fueled strong demand and full-price selling with particular strength in women's and kids.
Both store and e-com revenue were up compared to pre-pandemic levels with digital leading the way even with much higher conversion rates and transaction size driving store volumes.
Over in the UK shoe delivered a solid top-line increase compared to the second quarter two years ago.
As government-mandated lockdowns were lifted and the retail sector experienced its first quarter of mostly uninterrupted operations for the first time since before Christmas.
Schuh business rebounded steadily driven by pent-up demand and our successful efforts to drive sales of multiple pairs and even as consumers increasingly returned to physical shopping Schuh retained much of the online gains from a year ago.
Resulting in online contributing almost 45% of total sales.
The UK retail market is going through a highly disruptive phase with a strong consumer propensity to shop online and with many retail bankruptcies reshaping the landscape.
The Schuh team is taking advantage of this disruption utilizing its advanced digital offering to strengthen consumer connections during the lockdown and those efforts are paying off.
As the market reopens and shoppers once again have the choice to engage with the brand either online or in-store.
Many of the product and brand trends driving Schuh's performance, as usual, are the same as Journeys, but with a slightly heavier tilt toward fashion athletic.
Another highlight of the second quarter was the more rapid than expected pace of Johnston and Murphy's recovery boosted by an improving market environment and strong demand for many of the brand's newest product offerings.
With the number of social events and family gatherings increasing and more customers returning to in-person shopping retail traffic improved each successive month during the second quarter.
Building upon the gains in the first quarter.
At the same time, e-commerce revenue grew strongly increasing over 50% compared to pre-pandemic levels, as customers chose the digital channel to engage with the brand.
We were especially pleased with the performance of J&M's new athletically inspired casual assortment.
Sell-throughs were very strong with many new items selling out in both our direct-to-consumer channels, as well as in the wholesale channel where J&M gained significant market share.
These product launches accompanied by enhanced marketing campaigns are attracting a younger customer validating our efforts to reimagine the storied J&M brand beyond its dress-shoe roots into a modern lifestyle brand with broad consumer reach.
With second-quarter sales nearing pre-pandemic levels combined with strong full-price selling J&M's operating profit exceeded pre-pandemic levels.
A remarkable turnaround compared to last year.
These trends are adding to our optimism for continued improvement whenever America begins the return to office phase hopefully later this year.
Rounding out the highlights from the quarter, licensed brands revenue more than doubled versus a year ago reflecting the growing contribution from the Levi's footwear license we acquired in January 2020.
Operating profit improve versus pre-pandemic levels although not at the rate we expected due to higher freight costs, which are temporarily pressuring near-term margins.
We continue to be very pleased with how Levi's product is selling in accounts ranging from department stores to Journeys to Journeys kids to family footwear.
This has led to a strong order book for the back half and reinforces our excitement about the potential to create value by combining powerful brand licenses with our fully integrated footwear sourcing capabilities.
Turning now to the current quarter, we have been pleased with our results today as sales track ahead of pre-pandemic levels in August and we are several weeks into the all-important back-to-school selling season.
Last year back-to-school with like none before, since most children began the school year learning remotely.
This year, the vast majority of students are beginning the school year in person which is driving more robust sales while the Delta variant back to work timing and other factors will drive different patterns of consumption in the back half.
With a healthy and resilient consumer and the strength of our offerings, we remain confident in our ability to drive sales above the fiscal '20 level for the remainder of the year.
We will work hard to continue to successfully implement strategies to overcome the inventory, supply chain, labor, cost pressure, and other headwinds that are endemic in our industry today.
Tom will give additional details on our outlook.
Shifting gears, our footwear focus strategy is working and is delivering results.
This strategy was implemented before the pandemic leverages our strong direct-to-consumer capabilities across footwear retail and brands and the synergies between platforms.
Driving this strategy are six strategic pillars that emphasize continued investment in digital and omnichannel.
Deepening our consumer insights driving product innovation, reshaping our cost base, and pursuing synergistic acquisitions all to transform our business and exceed the expectation of today's consumers whose needs have rapidly advance.
In addition, COVID has provided us the real opportunity to transform our business at a faster rate and we are on a very good pace to deliver growth and improved operating margins.
While each of the six pillars is important to achieving our future objectives, I'd like to expand on just a few of our initiatives which are driving results while Tom will discuss reshaping the cost base.
Our strong digital growth highlights the progress we're making with this key strategic initiative.
Data-driven consumer insights, more robust CRM, and enhanced marketing are key to increasing consumer engagement and driving our next big wave of growth.
Schuh is taking advantage of the market disruption brought on by the pandemic to invest further in new customer prospecting through digital marketing designed to target weakened competitors' customers.
As well as geo-targeting where competitors' physical locations have closed.
These efforts have helped contribute to an increase of new online customers of more than 100% compared to pre-pandemic levels.
Journeys marketing efforts are gaining leverage by focusing on influencers who the team consumer viewed as more authentic creating a more organic experience that further builds upon the trust Journeys have established with this customer This content is being delivered through social media channel and SMS helping to drive a significant increase of 50 plus percent of new online customers.
In addition, Journeys continues to make progress implementing an upgraded integrated customer database with enhanced CRM capabilities, which will improve customer retention and acquisition and provide a clearer view of customer lifetime value.
To keep up with this increase in digital demand Journeys is wrapping up testing and bringing online another bespoke e-commerce fulfillment module, which doubled capacity ahead of the ramp-up of demand for online orders during the holiday.
We are underway rolling out North America new point of sale hardware and software along with new tablets advancing our efforts to digitize our stores and enhance the omnichannel shopping experience.
For consumers, tablets facilitate easy access to the full assortment anywhere in our system and upgrade our client telling effort and mobile checkout allows consumers to skip the checkout line.
For employees, this new technology creates efficiencies across a variety of in-store tasks such as new hire onboarding and employee training and communication.
With J&M's accelerating recovery, we can put greater focus on the next phase of reimagining the brand.
Product innovation and technology is at the center of differentiating J&M's casual products and commanding more premium price points.
Launches of the athletically inspired Amhurst and Activate collections and the expansion of the J&M golf collection were highly successful this spring and another major step moving the brand beyond its dress shoe origins.
J&M's design team is focused on expanding its technology toolbox with innovation including the access chassis system, which offers optimal support comfort and flexibility; TrueForm, which delivers superior cushioning and lightweight comfort; and Smart Degree, which is temperature regulation technology.
New product design and technology coupled with consumer insights and amplified marketing messaging will be the winning formula to grow J&M as a fresh lifestyle brand with a broader consumer reach.
Turning to ESG, we continue to advance these efforts including the establishment of our board's ESG subcommittee and we are working toward the publication of a comprehensive ESG report next year.
Again, these are just a few of the initiatives that are driving the positive transformation for Genesco.
We look forward to updating you on our continued progress and on other initiatives.
Before turning the call over to Tom.
We've continued to superbly navigate a dynamic and challenging environment with the health and safety of each other in mind and I continue to be amazed by your drive and determination.
Genesco's future is so bright because of you all.
Finally, our thoughts are with our neighbors to the west of us in Nashville affected by the devastating floods last week and those impacted this week by Hurricane Ida.
As Mimi mentioned, total Q2 results far exceeded our expectations and last year across the board.
For comparison purposes, we believe that comparing to two years ago our fiscal '20 provides the most meaningful assessment of current performance and the return of our business to pre-pandemic levels.
However, when comparing to fiscal '20 I would like to remind everyone how our strategy has changed our business.
E-commerce has become a larger percentage of sales and our license brands segment has become a larger piece of the total as well due to the acquisition of Togast and strong Levi's sales.
These changes come with an overall lower gross margin rate due to the impact of direct shipping expense and the expansion of our wholesale volume, which should be more than offset with lower SG&A from these businesses while these changes will reshape the P&L.
They have a positive impact on operating margins and an added benefit of a less capital-intensive business model.
Turning back to Q2 results, I'm pleased to report that not only did the second quarter continue, but it accelerated the sequential improvement of our operating results since the onset of the pandemic.
Higher revenue and gross margin combined with SG&A that remains well managed led to significantly higher operating income versus fiscal '20.
In Q2 adjusted earnings per share of $1.5 compared to $0.15 in fiscal '20.
In terms of the specifics for the quarter, consolidated revenue was $555 million up 14% compared to fiscal '20 driven by continued strength in the e-commerce, which is up 97% versus fiscal '20 taking overall digital sales to 19% of our retail business compared to 10% in fiscal '20.
Digital growth combined with much higher wholesale revenue drove strong sales improvements for Journeys, Schuh, and licensed brands compared to pre-pandemic levels while J&M made significant strides narrowing its revenue GAAP.
We did not provide overall or store comp results for Q2, as our comp policy removes any stores that are closed for seven consecutive days either this year or last year and therefore, we feel that overall sales is a more meaningful metric.
With stores open for 97% of the possible days in the quarter, overall store revenue was down only 1% versus fiscal '20.
Consolidated gross margin was 49.1% up 50 basis points from fiscal '20 driven by full-price selling partially offset by the mix shift toward licensed brands and higher shipping costs from higher penetration of e-commerce while e-commerce puts pressure on our gross margin rate.
As I mentioned it comes with a lower cost structure and double-digit operating income.
Journeys' gross margin increased 220 basis points driven by lower markdowns in both stores and online.
Schuh's gross margin decreased 200 basis points due entirely to the higher shipping expense from the shift in the e-commerce channel mix.
J&M's gross margin increased 570 basis points, benefiting from fewer markdowns taken on pack and hold inventory and higher full-price selling.
Finally the revenue growth of licensed brands typically our lowest gross margin rate negatively impacted the overall mix by 90 basis points.
Adjusted SG&A expense was 45.3% a 230 basis point improvement compared to fiscal '20, as we leverage from higher revenue and ongoing actions around expense management.
The largest year-over-year savings came from occupancy costs driven by the UK government program, which provides property tax relief, rent concession across our businesses, and ongoing rent savings on renewals.
These savings were partially offset by higher incentive compensation driven by improved profitability and increased marketing expenses needed to drive traffic in both stores and online.
As the multi-year shift in consumer traffic continues toward online and away from brick and mortar, our organization has been intently focused on the critical effort to right-size occupancy costs to be in line with store traffic.
The pandemic has exacerbated the transition to digital and we continue to have even greater traction on rent reductions.
Year to date through Q2, we have negotiated 75 renewals and achieved a 29% reduction in rent expense in North America.
This is on top of a 22% reduction for 123 renewals last year.
These renewals are for an even shorter-term average in approximately two years compared to the three-year average we have seen in recent years.
With over 40% of our fleet coming up for renewal in the next couple of years.
This will remain a key priority for us going forward.
In summary, the second quarter's adjusted operating income was $21.1 million versus fiscal '20s $4.7 million.
All operating divisions achieved higher operating income compared to fiscal '20 led by Journeys nearly 170% increase.
Our adjusted non-GAAP tax rate for the second quarter was 25%.
Turning now to the balance sheet, Q2 total inventory was down 27% compared to fiscal '20 on sales that were up 14%.
As we remain challenged keeping pace with the consumer demand levels and with delivery delays.
Our ending net cash position was $284 million, $70 million higher than the first quarter's level driven by strong cash generation from operations.
As a reminder we currently have $90 million remaining on our board authorized share-repurchase plan and we have a solid track record of returning cash to our shareholders.
Capital expenditures were $8 million as our spend remains focused on digital and omnichannel and depreciation and amortization was 11 million.
We closed eight stores and opened three during the second quarter.
We will not be providing guidance for the third quarter or full fiscal '22.
However, I would like to provide some color around our expectations using the pre-pandemic fiscal '20 as the reference point.
As we transition into Q3, thus far we have experienced a more normalized back-to-school selling season for Journeys and Schuh, but as expected the impact from the stimulus, has moderated and due to the spread of the Delta variant, there are more questions around when customers will begin returning to their offices, which will impact J&M's trend and whether Delta will disrupt in-store shopping.
Supply chain disruptions persist pressuring both the top line and product cost.
Now getting to more specifics of Q3 starting with revenue, we expect higher revenue compared to fiscal '20 levels given the strength of our assortment.
This is mainly due to constant continued strength from Levi's business and growth at Journeys and Schuh.
J&M will likely remain under the fiscal '20s level.
Directionally, the overall sales increase for Q3 compared to fiscal '20 could be up mid to high single digits.
From a channel perspective, the highest growth will once again come from wholesale and direct.
We expect gross margin rates for Q3 will be somewhat under fiscal '20 levels due to substantial pressure from import freight increases at J&M and license brands from supply chain disruptions.
We expect the retail promotional environment to remain favorable offsetting the ongoing pressure from higher e-commerce penetration in the higher shipping costs that come with it.
As well as the impact of licensed brands growth on our business model as previously discussed.
We expect that Q3 adjusted SG&A will be a little better as a percentage of sales than in fiscal '20.
Sequentially, we will not see the large SG&A leverage we saw in Q2 as revenue growth will be lower in the benefits from some government relief programs will be less than Q2.
That being said compared to fiscal '20, higher revenue will boost leverage in both occupancy and selling salaries partially offset by higher marketing and performance-based compensation as we anticipate higher bonus expenses than fiscal '20.
In summary, we expect the operating income to be similar to fiscal year '20 levels and the margin rate to be somewhat lower than fiscal year '20.
Due to these factors in particular the increased import freight in our branded businesses.
For taxes we expect the Q3 tax rate to be around the 25% we saw in Q2.
The annual tax rate is expected to be approximately 30%.
In addition, when comparing results we had some expense pick-ups like rent abatements in the back half of fiscal '21, particularly in Q4.
We don't expect to recur in the back half this year.
Next, I would like to provide a brief update on our cost savings initiative.
Given the shift of our business from stores to digital accelerated by the impact from the pandemic, we continue to make progress on reshaping our cost structure and allocating resources toward digital growth.
As a reminder, our target for the year is to identify savings in operating expenses of $25 million to 30 million on an annualized basis or approximately 3% of total operating expenses.
The entire organization is focused on this critical initiative and I am pleased to report that we've made significant progress toward our target.
The teams have identified over $20 million in savings with the largest amount coming from rent and the remainder in several areas, including increased, selling salary productivity, travel conventions, inner store freight, marketing compensation, and other overheads.
These savings benefit primarily the store channel and its profitability.
The cost savings initiative is a key pillar in our strategy to transform our business.
Designed to reflect the more capital efficient model focusing on driving further improvements, in return on invested capital, and allowing for improved flexibility in our operating model.
Going forward, we see opportunities to be less dependent on store capital expenditures, have lower lease obligations and continue to drive efficient use of inventory.
These results emphasize that we are the right team and the right strategy to continue to drive shareholder value.

user
q2 sales $555 million versus refinitiv ibes estimate of $522.4 million.
qtrly e-commerce sales increased 97% from q2 two years ago.

assistant