Companies

Third quarter net sales fall at Shoe Carnival despite strong back-to-school season

Nov 27, 2024 United States

The US-based retailer has reported a 4.1% year-on-year fall in net sales in the third quarter, hit by a shift in the retail calendar, two hurricanes that disrupted many of its stores and prolonged warm weather that delayed boot season

“Our Back-to-School results were strong, with comparable store sales growth across our banners and robust margins. Our flexible digital-first marketing campaign and great brand assortment drove demand during this peak shopping period and profitability in line with expectations for the third quarter. I am very proud of our team for delivering the Company’s profit results despite two significant hurricanes disrupting third quarter sales and a very warm October that delayed the start of our winter boot season”, commented Mark Worden, President and Chief Executive Officer.

Third Quarter Results

In the quarter that ended on the 2^nd of November, the company’s net sales amounted to 306.9 million US dollars, a decrease of 4.1%, on a comparable basis to the same period of last year, due to a retail calendar shift. Without it, net sales increased by 2.2% year-over-year.

Shoe Carnival highlighted the strong back-to-school performance, comparable net sales growth in August, and the acquisition of Rogan Shoes in February. Still, it noted that net sales in September and October were impacted by two hurricanes that disrupted many of its store operations and prolonged warm weather that delayed the winter boot shopping season.

The company’s gross profit third quarter gross margin was 36.0%, down by 80 basis points from the same period last year, mainly due to the purchase, distribution and occupancy costs of operating more stores and the deleveraging effect of lower quarterly net sales as a result of the shift in the retail calendar.

In the third quarter of the current fiscal year, Shoe Carnival recorded an operating income of 24.5 million US dollars, on a comparable basis to 27.9 million US dollars in the same period a year ago. The decrease was impacted by lower net sales due to the calendar shift, partially offset by growth from the Rogan acquisition and related synergies and lower SG&A expenses.

Overall, third quarter net income was in line with the company’s expectations at 19.2 million US dollars, or 0.70 US dollars per diluted share, as compared to 21.9 million US dollars, or 0.80 US dollars per diluted share, in the third quarter of the prior year. On an adjusted basis, which excludes costs related to the Rogan acquisition, third quarter earnings per share were in line with expectations at 0.71 US dollars.

Full Year Outlook

While the company has lowered its full year net sales guidance to a range of 1.20 to 1.23 billion US dollars from 1.23 to 1.25 billion US dollars, it has reaffirmed its full year earnings per share guidance of 2.55 to 2.70 US dollars and adjusted earnings per share guidance of 2.60 to 2.75 US dollars.

Store Count and Rebanner Strategy

“During the quarter, we also accelerated testing of our store rebanner growth strategy with the addition of seven stores, bringing the total number of rebannered stores from Shoe Carnival to Shoe Station to ten this year”.

But “early results exceeded our sales and profit success criteria, encouraging the team to expand the rebanner test to an additional 25 stores during the first half of 2025 as part of our long-term vision to be the nation’s leading family footwear retailer,” concluded Worden.

Shoe Carnival currently operates 431 stores, including 361 Shoe Carnival stores, 42 Shoe Station stores and 28 Rogan’s stores. The retailer also announced that the integration of Rogan’s store operations, marketing, e-commerce platforms, point-of-sale systems, merchandising and back office has been completed.

Image Credits: footwearnews.com

United States Companies Footwear Quarter Results Results Shoe Carnival